How do I build a marketing budget?
Whether you're operating a business or looking to just run the marketing department of a company, the need to build any type of budget seems like a daunting task. A marketing budget needs to be done, though, as it will help to keep your spending controlled while at the same time giving you a benchmark to help see if your marketing is having as much effect as it needs to be.
Understand and define your business strategy
Marketing is a way to bring in customers, clients, and awareness to your company, in an attempt to drive sales and revenues. It is a tool to help you reach your desired business goals, so you want to ensure you're using the right type of marketing tools properly.
For example, while a YouTube channel can be seen as a marketing tool, it may have little relevance if it's not aligned with your business, which may be selling things such as socks or shoelaces. You want to also align with the product itself.
Be clear in your goals as well. For example, are you looking to bring in X visitors to the website per month, or are you looking to increase your sales by Y% month over month? Understanding this will help when building out your marketing budget.
Know the different channels of marketing
You also don't want to just put one single number for marketing. Every marketing channel and strategy needs to be its own line item so that you'll effectively see where the spending is going. If you're doing an SEO strategy to make sure you rank well on search engines and deliver content specifically, make sure to have the appropriate budget for content creators and website builders to optimize the metadata.
If you're trying to grow your email marketing, make sure you factor in the necessary tools that can handle massive email marketing effectively, combined with the marketing costs to bring in new email signups.
Social media also needs to have its own budget, and if you're using more than one social media channel, you want to break that spend up. The more detailed your breakdown for each type of marketing is, the more effective the next part will be for your current and future marketing budgets.
Measure and analyze your spending
Digital marketing has a lot of tracking tools to work in. Items such as conversions, impressions, brand awareness, site visitors, and user journeys can easily be tracked, providing crucial information to marketers on how well they budgeted for everything. With each line item you've built above, you can see what worked and what didn't. Tracking the spending to review the outcome versus the expected outcome will determine if you appropriately sorted your budgets and if the marketing needs additional support.
Then you'll have the chance to optimize your budgets, especially if you try to optimize your marketing budgets multiple times throughout the year and keep on tweaking the budgets after reviewing the data. This way, the costs for marketing will be less with a better effect overall. Finally, keep shifting or pivoting your marketing strategies to ensure they are as effective as possible.
One key factor here is that if you find one of your channels producing great results, you need to start increasing your budget in that area immediately. Optimization of budgets often translates into cost-cutting measures. Yet when you find something that works, stick with it and nurture it with additional funding. You'll only compound the effects and get more bang for your buck.
Another thing you don't want to do with marketing budgets is assume that past budgets will continue to be successful for future budgets. Instead, you need to focus and refine each marketing budget from the ground up every time. Trends tend to shift and will do so quickly, so what worked one year won't be as successful the next year. This is starting to be seen with advertisements that don't tend to be as impactful as building up your authenticity and authority through your social media channels or content creation.
Break it down based on your audience
Don’t just say you’ll do marketing without any type of target audience or expected outcome. Otherwise, you'll quickly go over budget before you know it. First, look and see what your target audience is. This will help you focus on specific social media channels and tweak your SEO strategy to focus on particular keywords that are tailored to your target audience. Going in blindly with everyone in your target audience is too big a scope and will produce poor results.
Budget in marketing tools
At the very least, budget as many relevant marketing tools to track progress and data points. After more data points and inferences are found, the better you'll be at optimizing your budgets. You'll also want to budget for marketing tools that can help to automate marketing actions systematically and help bring those necessary boots to your early marketing days.
Finally, don't forget to budget for marketing tools that help with your marketing growth and presence. One such tool that always works well is the utilization of an SMM panel. This helps to boost your online presence and eventually grows your followers in an organic way, leading to a better digital presence. Here, you can find a great SMM tool to put into your next marketing budget.