Do you want to venture into the market but don’t know how much money you need to show your business to the world? In this article, we’ll introduce you to the marketing budget and how you can allocate your marketing costs to invest effectively in your business strategy!
What is marketing budget?
The marketing budget is just how much money you can spend while investing in marketing strategies for your business. For example, after market research, you noticed that your target audience is on TikTok, so the more logical marketing tactics are the ones related to investing your money in paid advertising on TikTok Ads Manager, right?
Still, having a marketing budget is more than just the money. Marketing teams must determine how much they can spend aligned with your marketing objectives because a well-planned marketing budget is essential for any business to allocate resources strategically.
That’s why you need marketing budget templates: to create a view of your resources and break down your marketing budget, ensuring you get the most out of your dollars and increase your profit margin.
Marketing budget template
The marketing budget template is a crucial document that organizes your marketing expenses. A budget spreadsheet, the template will allow you to see how you’re allocating all your marketing investment.
It outlines the amount of money you want to invest in each aspect of your marketing strategic plan. With the template, you can base your entire work progress, prioritization and organize a practical framework!
It’s easy to overspend or underspend money in certain areas if you don’t have a marketing budget template to lay out your entire strategy financially. The template will help you to determine how much your marketing spend will be, from logistics to branding.
Here's a basic marketing budget template that lists five different ways to market your business and how much each one might cost. The estimated cost per channel is just how much you're considering spending on each type of marketing, and the total cost is just the total of all those estimated costs.
Remember, this is just an example, so your marketing budgets might have more stuff in them, depending on what you're trying to do.
You should include little notes or comments to help explain what each thing is for, for every reader to understand the logic behind your budget!
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How to create a marketing budget
It doesn’t matter if you have an established business or just want to make money from home; the steps to create a typical marketing budget are almost the same!
Most businesses have different objectives, but the way to organize a clear framework to achieve them are very similar and you can find them below.
Determining your marketing spend
Before creating your marketing budget templates, you must determine how much you can spend on marketing. That varies depending on your business’ size and your overall marketing goals.
If you don’t know your goals, we recommend you do market research to learn about your potential customers, channels and the newest trends related to the products you want to sell.
A good rule of thumb is allocating between 7-10% of your total revenue towards the total amount of the marketing budgets combined. However, this will never be exact since every business has a different background and is in a different stage.
For example, e-businesses like ecommerce or online courses tend to develop cheaper objectives through social media strategies rather than traditional marketing since their investment power is lower than an established company.
Even though you must set your marketing spend before, marketing budget templates will be crucial to visualize your strategy and define whether you need to invest more money.
Define your marketing objectives
Before breaking down your marketing budget, you must first define your objectives!
These marketing goals reflect what you want to pursue as a business and will entirely guide your marketing activities and how you will allocate your marketing spending.
For example, suppose you want to start an online business. In that case, your marketing objectives will be more focused on digital channels and depending on how much you can spend, as a small business owner, you’ll need to find cheaper ways to promote it.
Remember these objects as guidelines to invest your money, and you will thrive.
Allocate the budget to different marketing channels
Determine which marketing channels you want to invest in based on your marketing objectives. This could include digital channels like social media ads, content marketing, email marketing, SEO, PPC advertising, events, or other traditional ones.
Now that you have determined your marketing spend, it’s time to break your marketing budget into different categories. Depending on your business, you’ll have different categories involved in your marketing strategies. However, here are the most common ones:
- Digital marketing: This includes online advertising and all the digital marketing channels like website development, video marketing, search engine optimization (SEO), paid advertising (or paid traffic), social media ads, email marketing and even influencer marketing.
- Traditional marketing campaigns: Includes print advertising, radio, TV and direct mail campaigns.
- Events and sponsorships: Trade shows, conferences and sponsorship opportunities.
- Content marketing: A great content marketing strategy includes starting a blog (this article is an example), YouTube videos, social media marketing and infographics.
- Miscellaneous: This includes any other marketing expenses that don’t fit into the different categories, such as printing new delivery boxes and flyers to create a campaign to improve your order fulfillment process and decrease the number of customer service-related issues.
You can allocate your marketing spending more strategically by breaking down your marketing budget into these categories.
You can break the categories into subcategories to cover diverse marketing costs to help you monitor your actual spending and adjust your budget.
Estimate costs for each marketing channel
While working on your marketing spend and budgeting templates, you should estimate the associated costs with executing your marketing plan!
That means you may include expenses such as ad spend, agency fees, PR costs, content creation costs like hiring freelancers to work on social media posts, digital marketing analytics platforms and all the tools you need to deliver your strategy.
Prioritize your marketing channels
In a war, you don’t have infinite bullets to shoot, and doing business is the same. While investing in marketing, you must carefully choose the channels you will use to reach your target audience.
Since they don’t have a lot of resources, small business owners prioritize marketing channels based on the estimated costs and potential ROI; the digital marketing budget is commonly cheaper than other channels. Consider investing more heavily in channels likely to impact your marketing goals more!
Track and evaluate your results
Once you’ve broken down your marketing budget and implemented your marketing plan, you must start tracking and evaluating your results.
For example, if you’re a social media manager, you need trackable links and landing pages to see if the leads and sales you’re acquiring are coming from this marketing effort!
You can use metrics like leads generated, website traffic, conversion rates and customer acquisition costs. These rates will help you determine which channels are delivering the best results and are solid to keep receiving marketing investments, and will help you to trace a new strategy in case you need to increase sales.
Adjust your marketing budget
Sometimes a campaign doesn’t perform as expected in a specific channel, and that’s okay. Working with marketing means constantly researching and testing new strategies to see how our efforts will work.
After evaluating your results, adjust your average marketing budget as needed, considering shifting funds from low-performing channels to those delivering the best results!
That’s why we need a more analytical eye on our marketing budget.
Marketing budget: conclusion
A well-planned marketing budget is critical to the success of any marketing strategy in a business. Creating a marketing plan determining how much you can spend and breaking down your marketing budget will help you allocate your resources in a more organized and strategic way.
Running a business is fun, but when we’re talking about making money, we can afford to lose a penny, so that’s the reason why we should be able to visualize all our investments through marketing budget templates to achieve maximum ROI.
So, are you ready to break down your budget? 😉