How to Allocate Your Marketing Budget in 5 StepsJanuary 19, 2021
Marketing is expensive, and successful marketing leaders understand the value of early planning. It can be costly to run paid campaigns, whether that’s through Google Ads or hiring influencers to promote your products or services. The success of the marketing strategy depends on spending the money on the right things. Though, strategically allocating your marketing budget is a crucial marketing task and one that can get overwhelming if you’re not sure how to go about it.
In this blog, we’re going to look at how to calculate and allocate your marketing budget so you’ll know exactly what you should be spending.
- Set marketing goals
Setting your marketing goals is a crucial part of creating a marketing budget plan. It starts with the core of your plan so that the initiatives you create will support the end-goals of the business. Marketing efforts should most directly align with sales goals for the year. Your goals will help determine which channels and strategies you use and how you allocate money to them. Many companies create shared goals across the sales and marketing teams to ensure that they are working collaboratively toward the same result.
- Create a plan for the year
To further guide your marketing budget allocation, create a rough plan for your marketing for the year. You must know the marketing budget number for building a realistic plan in support of the business. When budgets are in flux, it leads to unpleasant surprises down the line. Also, consider your buyer’s journey, how your customers interact with your marketing, and go from discovering your business to becoming a loyal customer.
- Calculate expected costs and return on investment (ROI)
Calculate your expected costs for each marketing initiative and the potential ROI. By identifying ROI, it helps you determine how to allocate your marketing budget. When adding up your costs, be careful to account for all of your potential expenses, including the less-obvious ones. Estimating ROI can be a tricky task but try looking at benchmarks for your industry with the channels you’re using. It helps you to look at the ROI of your past campaigns and the track record of the agency you’re working with as well. Calculating your expenses ensures you to allocate enough money to each channel. Estimating your ROI gives you an idea of how worthwhile your investments in each channel are. You may want to invest more in high-ROI strategies.
- Allocate your spending
Now, based on all of the information you’ve gathered, you can split up your spending across the channels you’ll use. Remember to keep in mind the best practices of your goals, expected costs, and expected ROI, as well as marketing budget allocation. Let’s look at a clear example of how a company might divvy up its marketing budget. You could write your blog posts and manage your social media to save money. If later in the year, you will notice that your competitors overtaking you in search engine results then you might move some of your PPC budgets to SEO and content marketing.
- Track your campaigns and refine your strategy
As your campaigns run, it carefully tracks your key performance indicators and measures your campaigns’ success. You can then use these conclusions to refine how you allocate your marketing budget. If a campaign is working exceptionally well, you might choose to allocate more funding to it. If a campaign is underperforming, evaluate whether you should adjust your tactics or reduce the funding you allocate to it. Be careful not to pull funding prematurely from a channel that’s important to achieving your goals. In addition to adjusting your spending as you go, compile your campaign and ROI data and use it when planning your marketing budget for the next year.
Following these five steps will provide a solid structure from which you can build your marketing plan and allocate your marketing budget. If you’re ready to dive into creating your marketing budget plan, Efrog is here to help. With over good years of experience, we know how to prepare a marketing budget that works for your business’s unique needs. We will also help you choose the right digital marketing channels for you and create a data-backed strategy for each channel. As a business marketing firm, we’ll help you choose strategies that work with your budget and drive results for your business.
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