Are you a part of the 50% of businesses operating without a proper marketing plan or budget? Instating a definitive marketing plan-based budget within your business is integral to continued company success.
A marketing budget outlines what the business intends to spend on marketing efforts over each month, quarter, or year. Marketing expenses can include digital agency outsourcing, a new team member, paid media advertising, a new website, a registered blog domain, and various marketing platforms.
Before you can set your marketing budget you’ll need to:
1. Understand your business goals
2. Know your business costs and forecasted revenue
3. Set your marketing goals to reflect your business goals
4. Create a marketing plan
5. Establish your goal costs
6. Extra: Download our 2021 Budget Templates!
1. What are your business goals?
Before setting your marketing budget, you’ll need to understand what your business goals are. Taking a look at the bigger picture can be extremely helpful when determining what success looks like for your business, and help you understand your marketing team’s part in accomplishing those goals. Check out our blog for some tips on how to align your marketing goals with your business goals.
Starting out with broader goals can help streamline your marketing efforts and keep your team on the same page.
2. What are the business costs & expected revenue?
When it comes to calculating your marketing budget, it’s important that you understand your business’ operational costs and forecasted revenue for the upcoming year. Businesses tend to spend around 5-10% of their overall business budget on marketing. So, in order to understand what your marketing budget is, you’ll also need to know what your business expects to make and spend this year.
At this point, you’ll need to take a deep dive into where you spend your money—what are the cost essential tools that you need to run your business? Operational costs could be anything from rent, payroll, overhead costs, office materials, software platforms, sales and marketing costs etc.
To understand your business’s forecasted revenue you’ll want to look at past metrics and current sales pipeline to get an idea of what you’ll realistically be able to accomplish this coming year.
3. Set your marketing goals
Your marketing goals should drive the direction of your marketing efforts, but they should also align with your overall business goals to ensure your investing your time and resources in the right areas. Start by setting specific, trackable, and realistic marketing goals for your team. This type of goal setting is also known as the SMART acronym:
- Specific: Each goal must be clear and specific with the description of what exactly you want to achieve.
- Measurable: You must be able to track the progress of your goal with a certain metric.
- Attainable: While you do want to push yourself, your goal still needs to be something you can actually achieve.
- Realistic: your goals should be relevant to the bottom line of what you are wanting to achieve.
- Time-bound: Hold yourself accountable and determine a realistic timeline with a set end date.
Ex: Rather than simply stating you want to generate new leads for your business, you can instead say, “I want to increase the number of quality leads by 10% in the next quarter through a targeted paid media campaign.”
4. Create your marketing plan
Once you’ve established your specific, trackable goals, it’s time to create a marketing plan. Here is where you will want to outline what needs to occur in order for you to reach your goals and start thinking of the costs associated with each task. Ask yourself the following questions:
What are the tools needed to get started?
Look into what marketing tools your business may need to jumpstart your marketing efforts. This could be anything from content scheduling software for blogs (CMS), social media scheduling software, email marketing platforms, or SEO tracking software!
What resources do I need to achieve this goal?
Similarly, be sure to specify what resources your team will need to aptly target your audience with your marketing. Do you have the available time, expertise, and energy to put into this marketing campaign?
What actions are required to reach this goal?
First, write down a list of all the tasks that you’ll need to complete to achieve your goal(s). Then, prioritize your tasks and estimate how long each task will take.
Who will be in charge of this task?
Based on the tasks listed above, if you feel as though your team does not have the bandwidth or skills to manage some of those tasks, then you might consider allocating your marketing efforts to a digital agency, either reoccurring marketing services or with a one-time project (ex: a website redesign), to help lessen the load.
5. Establish goal costs
At this point in your marketing journey, it’s time to determine what costs are needed for each task to help achieve your goals!
- Software: You may need software to create your campaigns, or simply handle daily processes. In terms of budget, you need to ask: how much does it cost to set up each platform? How long will it take to set up? What are the monthly expenses for each platform?
- New Internal Staff: If you do intend to hire full-time employees to help with some of the tasks, you’ll want to budget for the needs of a new employee, including onboarding, training, and benefits as well.
- Outsourced Staff: If you have a singular time-consuming campaign (ex: website redesign) or if your current team doesn’t have the skillsets needed to accomplish some of your tasks, you might want to outsource your marketing efforts (SEO optimization, content writing, graphic design, social media, paid media, etc.) rather than hire a new team member.
- Paid Media: Take into account how much money you’ll spend on paid opportunities such as sponsored content, SEO ads, and social media promotions. Typically the higher your budget, the more people will view your content.
- Campaign Creation: When you create content such as videos, photos, or even blog posts, you’ll need to put paid time into it. Budget how much money will go into creating your campaigns so you can adjust accordingly based on ROI.
Note: You may need to do some industry research to understand your own personal expected costs.
Marketing Budget Templates
Pyxl has created free and easy to use marketing budget templates to help you outline and plan your marketing spend throughout the year:
Download a copy of all 3 of our budget templates to ensure your team is getting the best out of your company marketing spending.
Need help determining what your marketing budget will be? Pyxl can help! As an agency, we’ll work with you to improve your digital marketing strategy by creating a marketing plan and budget for your business. Contact our team today to learn more about how an agency may be the right fit for you.
Updated: Nov 19, 2020