Tips For Creating Your Marketing Budget
It’s true what they say. You have to spend money to make money. But spending money frivolously isn’t a luxury most small and mid-sized companies have. Instead, these companies need to be smart when it comes to budgeting their funds. Frequently that results in skimping on marketing efforts to keep the business running as usual.
Ultimately, it’s a Catch 22. You can’t justify spending the money when you aren’t making enough money. But you can’t expect to grow your business without shelling out a portion of your budget for marketing. Here are some tips and tricks we’ve put together along the way to help you not only create your budget but also advise you on the returns you can expect from different marketing tactics.
Determine Your Marketing Budget
The amount you spend on marketing is different based on your product and services. You should expect to set aside a certain percentage of your annual revenue. First, determine if you’re a B2B or B2C company and then identify if you sell products or services. Once you have that information, you can expect to set aside the following percentage of your annual budget:
Now that you’ve identified the number of funds you should set aside for your marketing budget, it’s time to break that down for the different marketing channels. Here are the average percentages companies use to allocate their budget:
|Type of Marketing||Percentage|
Digital marketing should receive the largest allocation because there are so many different channels to capitalize on. Under the digital marketing umbrella, you’ll find things like search engine marketing, email marketing, social media marketing, and content marketing. With so many channels to choose from, it’s easy to get overwhelmed. Start by determining which channel will garner the highest return. For an eCommerce business, spending your budget on search engine optimization and email marketing might be your best bet. But for service-based companies, you might see a better return spending your money on building your social media presence and content inventory.
Print marketing is still a highly effective way to bring in new leads and nurture existing relationships. With strategic direct mail marketing campaigns or stylish and informative pamphlets and brochures, you can expand your customer base with ease. But print marketing campaigns can be hit or miss without the proper execution and planning. Printed materials tend to be cheaper as the quantity increase. However, if you don’t spend the time and money to research your target audience correctly, buying in bulk can result in wasted collateral.
Attending and hosting events is a great way to expand your prospects. This even allows you to reconnect with previous customers or touch base with your current clients. Start by identifying which kinds of events will get you the most bang for your marketing buck. Maybe attending or exhibiting at a trade show or convention is more cost-effective than hosting a networking event. Spending your budget to create a booth that stands out on the show floor is a great way to attract new customers. You can do just that with a high-quality backdrop and even custom floor graphics. But don’t discredit the value that can be gleaned from bringing your clients and colleagues together for a happy hour or educational event.
As important as it is to spend your marketing budget, it’s also essential to have some funds set aside for any various things that may pop up during the year. Preparing for these incidentals will help to keep the rest of your strategic marketing plan on track. Having this small cushion can help you go above and beyond to hire a publicist if your company wins an award or even if you need help with damage control. Or maybe a particular campaign is performing well, and you’d like to capitalize on that momentum. Having a portion of the marketing budget free and ready to be used when needed is a game-changer.
Once you determine your marketing budget for the year, don’t forget to #GoToShout for all of your print, digital, and event marketing needs. Contact us today to get started on your campaigns.