As a digital marketing company in Liverpool, at Breeze Development we encourage our clients to have a clear marketing budget. It’s very easy to be tempted into marketing disasters like a kid in a sweet shop, doing whatever tickles your taste buds at the time. But this can be expensive and ineffective.
Any digital marketing and web development company worth its salt will tell you that having a marketing budget will help you to focus on spending wisely rather than throwing good money at fruitless campaigns.
A strategic marketing plan with a clear budget brings different elements of marketing together to create impact. A spontaneous gung ho approach can be a costly waste of time.
Which marketing activities should be included in a marketing budget?
When putting together a marketing budget there are many different types of campaigns to consider. Digital marketing examples are a website, social media posts, Google AdWords, PPC (Pay Per Click) campaigns, blogs and case studies, videos, email marketing and public relations. Non-digital campaigns might involve free product sampling or giveaways, demonstrations, print advertising and exhibitions.
There’s a lot to go at, and if the above lists get you excited you definitely need a marketing budget! Breeze Development is a Liverpool based digital marketing agency that can help you make your marketing budget work.
How much should you spend on marketing?
The answer to how much you should spend on marketing depends on what you want to achieve.
Using the marketing budget rule of thumb, businesses with a six-figure revenue should invest the following percentages of sales revenue into a marketing budget:
- 5% – to maintain current awareness and visibility
- 10% – to grow and increase market share
- 20% – for rapid growth or a new product launch
Smaller businesses should pay attention to what their competitors are doing and what their perceived ballpark spend is. This might be tricky to work out, and if so the above % guidelines will offer some general insight.
Your marketing spend may also be determined by your industry. According to CMO Today the consumer packaged goods industry spends 24% of its overall budget on marketing, whereas for retail it’s 10% and for energy it’s just 4%.
Expenses to include in a marketing budget
The direct cost of marketing campaigns will account for more than 50% of your marketing budget, but there are other factors to consider:
- Optimisation of a company website
- Marketing employees
- Market research
- Marketing training
- Marketing analytics
- CRMs and other technology or platforms
- Other overheads
How to create your marketing budget?
For a start-up business your first marketing spend will be allocated to creating a brand identity. This includes the creation of your logo and a website. Established businesses should start by identifying the sales and marketing tactics that are working and those that aren’t to work out where savings can be made and which areas justify more investment.
A marketing budget should help you to prioritise your spending and make you competitive in as short a time as possible.
Here’s a step by step guide to a marketing budget that delivers the results you need:
Understand your customer journey
Review how your clients currently find you, what they need to know to help them buy, and identify the main factors that influence their decisions. Understanding your customer journey will help you create a marketing plan and a corresponding budget.
Work out your operational costs
A table of current or anticipated operational costs will help you set a marketing budget. Costs might include professional fees, content outsourcing, web hosting and supplier invoices. A tally of these costs will give you a clear indication of how much you need over the year to maintain your marketing activity. You can then consider whether this should be cut back or increased, depending on your goals.
Set out clear goals
Ask yourself these questions to help you marry your marketing budget and goals:
- How much revenue does your business need to make?
- How many sales do you need to achieve your revenue goal?
- How many leads do you need to convert to orders to reach the required number of sales?
When you’ve determined your goals you can work out the ROI (return on investment) required from your marketing activity and therefore how much you need to spend.
To make your goals successful you need to constantly track them otherwise they can be forgotten and therefore pointless.
Check out the competition
As digital marketing consultants we would always encourage you to check out the marketing activity of several of your competitors.
Do they have a strong digital presence or are they opting for more physical marketing materials? Are they spreading their activity over a wide range of marketing platforms or concentrating on just a few?
This will help you to decide which marketing platforms to try and therefore which to include in your budget.
Can we help?
Breeze Development is a Liverpool digital marketing agency. We work with our clients to develop realistic marketing budgets that create growth. If you would like a no-obligation chat about how we can help you, please get in touch.