A well-defined marketing budget is crucial to your business. It ensures your marketing plan is not only effective but also financially sustainable. While many businesses can feel overwhelmed with the process, it’s important to understand that the purpose of a marketing budget isn’t to constrain but to empower.
Instead of channeling your penny-pinching grandma, you should approach creating a marketing budget like a superhero. Sure, there are endless ways to use your marketing/powers, but only when they are focused will they be effective. Like Uncle Ben told Spider-man, with great power, comes great responsibility. A marketing budget is how you can be responsible with your marketing.
Without a marketing budget, your marketing strategies can quickly go awry. Instead of planning and pacing your tactics for the year, you can find yourself quickly exhausting your funds. Such was the case in Disney’s 1994 comedy classic, “Blank Check”. A great cautionary tale for marketers creating a budget. In the film, a small child named Preston comes into the possession of (you guessed it) a blank check. Preston writes the check for $1,000,000 and rather than following the ways of his frugal family, Preston is lured by the appeal of mansions, waterslides, and go-karts. His million is exhausted in a matter of days, and the owner of the check, a criminal played by Tone Loc, and the FBI show up.
Your marketing budget is no different. Okay, maybe it’s a little different — but the lesson remains the same. If you’re skipping the budgeting process like our friend Preston, instead of Tone Loc and the FBI at your door, you’ll have leadership questioning your marketing strategy and a budget that could’ve been used more efficiently.
A marketing budget provides a clear framework within which you can make smart decisions about how to distribute your resources. Whether you plan on launching a new product, expanding your digital footprint, or merely want to maintain your current customer base, a well-structured marketing budget can guide you. In this blog post, we’ll take you through the process of creating an effective marketing budget that aligns with your business goals and allows you to maximize your business’s potential, so you don’t fall into common budgeting pitfalls like Preston.
What’s Included In A Marketing Budget?
A marketing budget typically encompasses all of the expenses directly or indirectly linked to promoting your business. This includes costs for advertising campaigns, public relations, digital marketing efforts like SEO and social media, branding, market research, and event sponsorship. It’s not just about direct costs either; it also comprises indirect costs, such as the time spent by your staff on marketing tasks. Additionally, a certain amount should be allocated for unexpected opportunities or challenges that may arise during the year.
Suffice to say, there’s a ton of stuff you can spend your marketing budget on. The sheer variety of options can make it difficult to keep budgets focused and to stay away from new and shiny things like our “Blank Check” protagonist. This is why a comprehensive marketing budget is a must for any business.
That’s why the first step to deploying an effective marketing budget is gaining a deep understanding of your business goals. Only then will you be able to measure the effectiveness of your campaigns, assess ROI, and adjust your budget more strategically — and avoid spur-of-the-moment expenses. Subscribing to new marketing tools and late-night Amazon purchases feel surprisingly similar.
Understanding Your Business Goals
Understanding your business goals will help you determine the necessary budget items that align with those objectives, as well as the resources required to achieve them.
Once you have a list of goals in hand, take some time to brainstorm potential strategies and tactics for each one. Unless you’re staying up to date on the latest marketing news, it can be difficult to identify which tactics will help drive particular strategies, we can help with that at Hivehouse.
Also key to making your business goals actionable marketing strategies, identify any resources or activities that may need additional financing. Doing so will help you establish realistic expectations for the budget and help you create a plan that is tailored to your needs.
Calculating Your Budget
The next step is to assign dollar amounts to each of your strategies and tactics. To do this, consider factors such as the type of strategy you will be using (e.g., online or traditional marketing), its potential reach, the resources needed for implementation, and the expected return on investment. Additionally, you should also factor in any potential risks associated with each strategy.
Once you have a rough budget allocated for each item, you can use this as a starting point to create your overall marketing budget. When calculating the total budget amount for each tactic or strategy, it’s important to include both direct costs (e.g., advertising fees) and indirect costs (e.g., staff time). This will give you an accurate picture of how much resources the strategy requires and will help to ensure that your budget is realistic and achievable.
Implementing Your Budget
Now that you have a detailed marketing budget allocated for each strategy, it’s time to start implementing it. To do this, divide the budget up into smaller chunks and assign them to specific tasks. For example, if you have an advertising budget of $2,000 allocated for a particular strategy, divide this into smaller amounts such as $500 for print ads, $400 for online ads, and so on. Doing this will help ensure that the funds are used efficiently and effectively throughout the year.
It’s also a good idea to set deadlines for each task and track your progress along the way. This will help ensure that you stay on top of your budget and keep your marketing plan moving forward.
Evaluating & Adjusting Your Budget
Things come up. Especially in marketing. There may be a surprise event, a Google Ads campaign that gets pricier than expected, or a LinkedIn Ad that doesn’t perform up to expectations.
That’s why, as the year progresses, it is important to review and evaluate the performance of your strategies and tactics as they relate to the budget. By evaluating the results against your original goals, you can identify potential areas of improvement or cost savings and make necessary adjustments to the budget.
For instance, if a particular strategy isn’t performing as expected, it may be worth reallocating funds from that area to another more successful one. This way, you can ensure that your marketing plan is as efficient as possible.
Hivehouse is Here To Help With All of Your Marketing Needs
Somehow, at the end of “Blank Check,” Preston gets off scot-free — despite committing what is likely check fraud for a million dollars. His family even throws him a birthday party! Unfortunately, your marketing budget will not exist in the Disney universe and requires a measured and strategic approach. For a marketing budget created for the real, digital marketing world, Hivehouse Digital is standing by to help. Our team of experienced professionals will work with you to identify your business goals and develop an effective budget that maximizes the return on investment for each strategy or tactic. We offer a variety of services to help you and your business achieve all of your goals. If you have any questions about any of the services we offer, or you’re looking to get started working with us, contact us today for more information.
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