What is a Marketing Budget?
The money a business plans to spend quarterly or yearly on projects related to marketing is summarised by marketing budgets. It records the amount of money your business intends to spend over a period of time, like monthly, quarterly, or annually.
It can encompass expenses of sponsored web content, registered blog domain, paid adverts, website maintenance costs, marketing automation software, and new staff for marketing.
There might be a need for software to manage daily procedures or create marketing campaigns in print and digital media.
There might be a need for temporary recruitment of freelancers before recruiting full-timers in case fresh marketing strategy or short-term campaigns need to be tested.
Allocate the amount of money intended to be spent on paid occasions. These include native ads, search engine ads, sponsored content, social media promotions, and physical ads.
Paid time needs to be allocated while creating photos, blog posts, or videos. Manage the amount of money allocated into producing this content depending on the investment’s return.
Why do I need a marketing budget for my business?
1. It helps set standards and aims
A detailed budget can set practical standards and goals that help develop your business.
2. It enables to plan long-term
A more agreeing and efficient marketing strategy can be created with a long-lasting finance plan. Thus, flexibility in the allocation can be achieved.
3. Backs up business’s growth
It is essential to acknowledge that marketing is an investment, not a cost. A business’s evolution and growth are backed up by marketing.
4. It helps remain on course financially
An allocation of monetary resources is necessary to be financially stable while implementing new marketing strategies. One should keep an eye on the money spent on every strategy while developing a marketing budget.
It gives an idea of whether more money can be spent or if more money is spent than planned.
5. It enables appropriate allocation of funds
Marketing allowance can be appropriately allocated with the help of a marketing budget plan. It helps figure out the strategies that would work within the budget or determine if the packages from digital marketing companies fit in the budget.
Steps to developing a marketing budget as part of your marketing plan
1. Be aware of your Sales Funnel
The sales funnel needs to be looked at in detail to come up with an efficient marketing budget. The results of your revenue cycle need to be kept an eye on throughout- from possible customers to customers.
- What is the average number of site visits monthly?
- How many leads are generated every month?
- How many opportunities are generated from the leads?
- What is the revenue/value of a fresh deal?
2. Be aware of your Operational Costs
How much would hiring an agency of record cost?
In-house recruitment will be more cost-efficient than the upfront cost. However, the extra expenditure can be worth the value of return/output.
Does a business have eligible staff for the work internally? Or if there is a need to add relevant employee benefits expenditure with more headcount?
3. Base your Marketing Budget on Business targets
Ask these questions to establish the aim:
For this quarter, what is the company target?
For this year, what is the company target? What are they for the next three years?
Depending on the sales team’s close rates, how many contacts need to be provided to them to generate revenue enough to reach the targets?
4. The company’s Growth Stage must be considered
The company’s stage (whether it is in the planning stage of development stage) will also influence your marketing budget. Growth stage: top-line revenue needs to be generated rapidly in this stage.
Marketing approaches with immediate impact need to be considered along with more intense investments.
Planning stage: long-lasting marketing approaches through earned media should be considered in this stage, where consistent growth is more important than revenue spikes.
5. Existing and Future Trends must be understood
Various technologies need to be used and applied by marketers while setting a marketing budget. This can help them stay updated with the speed at which the industry evolves.
If email is part of marketing strategy, features of email marketing like scheduling, tracking, and contact insights must be taken advantage of.
6. Think about what strategies you want to implement
Choosing a correct strategy should be the most vital component while determining the 2021 marketing budget.
Various digital marketing strategies can be used, like:
Search engine optimization (SEO)
SEO is the process of boosting your website’s rankings in search results to help drive more relevant, organic traffic to your page.
PPC ads are paid advertisements that appear at the top of search results pages and on other web pages. These ads allow you to reach more leads that are ready to convert.
Social media marketing
Social media marketing enables you to connect with your audience one-on-one and deliver informative content to them. This strategy allows you to build relationships with leads and nurture them into customers.
Social media advertising
If you invest in social media advertising, you’ll focus on creating compelling ad copy targeted at specific leads. These ads appear seamlessly in their newsfeed, allowing you to build brand recognition and earn more leads.
Email marketing enables you to nurture leads towards conversion by sending them tailored content that fits their interests. You can send promotional emails, exclusive deals, abandoned cart reminders, and more.
Content marketing enables you to drive more leads to your page by sharing valuable information with your audience. Whether it’s blog posts or videos, you can share your knowledge with your audience and establish yourself as an authority in your field.
Marketing Budget by Industries
Marketing Budget Example – Amazon Marketing Cost
- In 2019, Amazon’s total marketing expense was $18.9 billion (that includes advertising and other related costs).
- $11 billion was spent on Amazon’s annual advertising expenditures last year.
- It is a 34% increase amounting to $2.8 billion yearly since 2009.
- According to Campaign, around 2% of all global ad spend is generated from Amazon currently.
- Meaning, Unilever and Procter & Gamble have been outspent by the company in advertising.
- “Amazon is likely the biggest advertiser on Earth,” said Brian Wieser, president of global intelligence at WPP’s Group M, in Campaign.
- Various marketing channels are used by Amazon to reach and lure its customers.
- This includes online and social media ads, sponsored searches, television ads, third-party customer referrals, etc.
- The television ad is a regular marketing channel for Amazon every year during Super Bowl.
- The salary for an individual engaged in sales and marketing for Amazon is also a part of its marketing cost.
- Amazon is rapidly outgrowing all other ad publishers globally.
- Marketplace Pulse anticipates the continuation of trends as the company implements more products and advertising tools.
- It is calculated that in 2020 Amazon will spend over $13 billion for advertising and around $17 billion in 2021.
- eMarketer predicts Amazon will receive nearly one in 10 US digital ad dollars by 2021.
- The company will then be able to dominate the digital ad space too.