Four Things to Consider When Planning Your Marketing Budget

By George
6 Min Read
Planning Your Marketing Budget

If you’re starting a new marketing campaign, you have a lot to consider when planning a marketing budget. It can be intimidating to decide which funds you should allocate to out-of-house, social media, video, print, and other types of marketing. As a business owner, you are the expert on the product or service that your business provides, but you might not necessarily be an expert in finance. 

In fact, it’s fairly common for business owners to hire marketing professionals and industry experts to advise them and help them build a budget. If hiring a budget manager isn’t necessarily in your budget, either, there are still some resources and tips that can help you plan your own marketing budget.

When evaluating your marketing budget, you’re going to want to compare costs for different advertising mediums. There are some types of ads, like organic social media marketing, that won’t need to be factored into your budget. On the other hand, you will need to consider paid social media marketing, TV and radio commercials, traditional print media, and billboard prices when determining your marketing budget. 

According to this cheat sheet from Salesforce, marketing budgets can be broken down into six different categories for typical business-to-consumer (B2C) companies, or companies that sell products directly to customers. B2B companies, or companies that sell raw materials to another company, contain a few more components in their marketing budget. (Fun fact: Only 23.6% of companies sell B2B products or services while 33.7% sell B2C products or services). Since most businesses sell either a product or service, you are likely hoping to obtain a realistic marketing budget for your b2b.

According to marketing experts, the marketing budget for a B2C company should be allocated as follows: 17% for people, 21% for technology, 23% for advertising, 16% for research, 18% for content, and 6% for others. So how can you use these percentages to your company’s advantage, and how can you determine which budget is appropriate? Read on to find out more.

1. It’s Okay to Spend the Majority of Your Budget on Advertising

Most B2C companies spend 23% of their marketing budget on advertising. That means that you should be budgeting for those big-ticket items like billboards and transit advertisements. Organic social media advertising is useful and cost-effective, but if you’re targeting a non-Gen Z or millennial audience, you may want to invest in other forms of advertising. Of course, some billboards are more expensive than others, so you should check billboard prices based on location and size. Billboard prices in the US average around $850 with digital billboards averaging significantly higher at around $2.1k. Billboard prices do not only vary based on geographical location; they also tend to be higher in areas with more foot and car traffic. While billboard prices are lower for small billboards in quiet locations, it may be more worthwhile to invest in one large billboard in a prominent location.

2. Don’t Overspend on New Projects

While it can be tempting to assign most of your budget to a promising new project, marketing experts advise against it. Without research to prove that your new marketing technique will be a success, your company could suffer serious losses. Experts recommend allocating your marketing budget to multiple areas rather than spending five figures or more on a single billboard. Fortunately, the cost of most billboards in the US averages far below this range. 

3. Set Achievable Goals Using Existing Data

When setting a new marketing budget, the best place to start is with your company’s past data. Take a look at which marketing mediums have been most successful in the past and where you would like to improve. If a particular type of advertisement or medium did not reach your target audience, you may want to contribute more funds towards areas that did generate leads and conversions. After analyzing your data, set goals that are both measurable and attainable. You might aim to achieve 80,000 impressions from a particular billboard, but how will you measure this? Will you hire outside help, or create a website survey to ask clients how they heard about your company or new promotion? These are important questions to ask.

4. Follow An Example

There is no denying that the business world is competitive. While companies typically discourage copying ideas directly from one another, it’s perfectly reasonable to copy a competitor’s business model or marketing budget if it works for you. While the marketing budget for small businesses varies, you may still want to take inspiration from a successful competitor, even if they have a larger budget. Their budget categorization and percentages will likely look the same. 

In Summary

Planning a marketing budget might seem intimidating at first, but it’s possible to save money using the expertise of your competitors as well as advertising techniques like organic social media. According to experts, occasionally reserving more money for advertising mediums like billboards and TV ads can be successful—if that’s truly what will reach your intended audience.

Posted by George
George is a passionate writer and technical lead in a reputed company, he is contributing since 1997 to the web, and he has worked in the top 500 fortune companies and made his remark.