Knowing how to handle a marketing budget is part of your job if you’re in control of your company’s marketing staff. Your paid advertisements and website updates don’t operate on a shoestring budget, after all.
We’ll go over how to make a marketing budget for your company in this post.
What is a Marketing Budget?
A marketing budget is a strategy that specifies how much money you can spend on marketing and how you’ll distribute it among various marketing tactics. Budgets for marketing might also include other expenses like paying for software or outsourcing services in addition to fees for tactics.
How Much Time is Required to Create a Marketing Budget?
Typically, the entire budget planning process takes two months, though this might vary substantially depending on your company. You must invest time in pre-planning to speed up the lengthy process of developing your marketing budget.
What Different Budgets Are There For Marketing?
While the process of developing a thorough marketing strategy differs from company to company, it typically begins with a discussion with your superiors about the budget you have for marketing.
There are four common approaches to marketing budgeting:
- Competition-based: Each spending period, you are given the amount of money you require to match what your rivals are doing.
- Revenue percentage: Each spending period, you are given a certain portion of the company’s overall sales, typically between 5% and 20%.
- Top-down: Your superiors give you a sum that they choose without consulting you, and you distribute it as efficiently as possible.
- Bottom-up: Your supervisors give their approval after you calculate how much money you believe you’ll require for that spending period using a goal-based strategy.
Marketing teams generally don’t have much say in the first three alternatives; they largely have to make do with what they’re provided. However, organizations frequently combine two or more of these strategies, especially top-down and bottom-up.
How to Plan a Marketing Budget
Planning how to utilize the money your supervisors are allotting for marketing should begin as soon as you learn about your expenditure targets.
Here are the stages of a plan which you execute –
- Conduct research
- Set SMART objectives.
- List the expenses you have.
- Determine costs
- Shorten your list.
- Gain management approval
How to Manage a Marketing Budget
Finally, you can start managing your marketing budget.
1. Create Spreadsheets
You should make a complete spreadsheet to track everything from this marketing budget breakdown before the spending period starts. The secret to keeping your expenditures in line with your budget is a decent spreadsheet.
In fact, having many spreadsheets can be advantageous. You can use one template to keep track of all your marketing expenditures, as well as others for more in-depth tracking of specific categories or campaigns.
You can have a separate one for content, one for PPC, and one for SEO. As you proceed through the spending period, make frequent updates to these spreadsheets. Your thorough marketing strategy is useless if you don’t use it to control your expenses. At the very least once per week, update your spending.
2. Keep Track of Expenses
Consider making a calendar with dates and reminders to help you keep track of any automated spending or monthly payments, such as subscriptions or contract renewals. Employee spending, however, is a little more challenging to monitor.
Sometimes it involves paying for software and renewing contracts; other times, it involves hiring new people. It might be challenging to consolidate though because it involves numerous persons and platforms.
If you use a spend management system, it probably contains a feature that allows you to automatically register all of these payments and update your budget as necessary. If not, simply be vigilant about monitoring employee expenditures.
3. Tag Items as Paid or Unpaid
Another tip for managing your marketing budget is to categorize items in your budget according to whether or not they have previously been paid.
Knowing which budget items are variable and which ones are already fixed in stone makes it much easier to transfer money about or swap out one activity for another when you need to. It is simpler for everyone if you label them as paid or unpaid.
4. Keep Experimenting
Once you’ve identified a plan that works exceptionally well for your company, stick with it but don’t become stuck in your ways. Always use the final 10% of your budget to experiment with new and alternative possibilities, even if 90% of it stays the same each spending month.
5. Note Possible Improvements
You shouldn’t only think about your current spending cycle. When you are organizing your next budget, consider what you can do to assist yourself. Look at the ROI of various budget items frequently over the expenditure period and make comments on how you can make it better.
6. Preserve Any Mid-spending Period Changes
As was previously stated, you may need to change your budget in the middle of a spending period.
When that occurs, you’ll need to get new numbers to replace your old ones. Make a copy of your original budget first; do not overwrite it. You can use the gap between your original and updated budgets as a pointer to what changes you might be able to anticipate when making plans for the upcoming spending period.
7. Analyze Your Performance
Managing a marketing budget is never simple, but monitoring your marketing effectiveness may make it a lot simpler. You should monitor key performance indicators (KPIs) like bounce rates, cost per lead, and average customer value.
Look into integrating platforms like Google Analytics or other technologies with your website as they may give you a lot of this information. Understanding this data is essential to determining which budgetary items are genuinely useful.
8. Ending a Spending Period
Revert to your SMART goals entirely after the spending time has ended.
Make sure that every one of the activities in your thorough marketing plan that you invested money in ultimately helped you achieve your objectives. Then, review your objectives and financial plan for the forthcoming expenditure period.
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By SEO
- Dec 2, 2022
By SEO
