Are you frustrated with having to spend so much with so little revenue from your marketing budget? Or creating a strategic budget to help you maximize internet marketing.
Marketing is much more than just advertising and promotions. It is about understanding how you can achieve success with little or no spend.
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A budget must cover the many areas of planning, pricing and distributing your product or service if you want to stay competitive and maximize your profits.
Because marketing affects most areas of your business, your marketing budget is critical to your success. As you create your marketing budget, start with a list of exactly what areas you need to address in marketing your product or service and how you’ll address each area.
Your marketing budget should cover the macro aspects of your business: market research, product planning and development, financial projections to help set production and pricing objectives, distribution methods, advertising, promotions and public relations.
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Also, under each of these categories are several sub-categories of spending, such as the design services needed for any advertisement you create or costs you incur for fulfilling promotional rebates.
Establish your marketing goals
Starting from any other premise results in arbitrary tactics or actions based off of someone else’s goals, copied from an outdated or disparate department. And that kind of foundation will do you no good.
With something as important as a marketing budget (which, let’s face it, tends to be the first on the chopping block), you need a strong foundation and clear numbers if you want to show results.
Is your goal to increase your online conversions by 300% this year? Are you a small business with the goal of doubling your email list in the next three months?
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Do you want to get the word out about next season’s product launch, and have that new product line make up 20% of your overall sales for the year?
Or are you ready for your brand to launch an entire new online strategy, complete with a redesigned website and a full inbound marketing plan — with an integrated content strategy, email campaign strategy and lead generation strategy — that increases your revenue by 25%?
Your goals will vary, but the first step in establishing your marketing budget is to get specific about your goals — and your priorities.
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Your goals will translate into your marketing budget by the allocation of funds towards these goals where you need to see results. Don’t listen to another marketing department’s strategy if you want to achieve your goals.
Determine your total annual marketing budget
The percentage of revenue that you should allocate for your marketing budget will depend on your industry which is, the size of your company, your brand recognition and most importantly your overall growth goals. Once you have that big number settled upon, it’s time to start budgeting.
Figure out your marketing budget category
This is the part that can get complicated, especially if you’re in the middle of implementing new marketing strategies that aren’t already line-items in your current budget.
You may have to start from scratch to make sure you include all the categories that will end up impacting your marketing budget this year.
First, round up the current expenses in your budget (the difficult level of this step will depend on the state of your current marketing budget documentation).
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For example, you might allocate a certain amount to ad buys on television, radio or websites; a certain amount on blog post writing, social media, content marketing; a certain amount on sales nurturing etc.
Get it all in one list, segmented by category. Then add the new marketing strategies you’re starting to implement. What categories do those fall under — and are they creating entirely new categories?
Here are some potential categories that you might need to consider:
Search, PPC, social media advertising, lead generation, display, TV, radio, print, direct mail. This is the bread and butter of “old school” marketing.
This used to be the only way to reach your audience. While this type of “outbound” marketing has had lots of competition with the evolution of newer forms of PR and content marketing in recent decades, it’s still a great way to get messages out there for some industries and organizations.
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For any advertisement budgeting, make sure you account for both production (including design, messaging, testing, etc.) as well as ad placement costs.
Branding & creative
Software, hardware, IT, equipment, stock photo or video, freelancers, fonts, printing, off-site shoot travel, supplies.
Your branding and design department is what is going to make your marketing look good. And in some cases, the first look is what determines if the audience will pay attention.
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Be sure to include costs each month for equipment, software, hardware, etc, in addition to design and freelance hours.
If you don’t use it each month, that positive balance will carry over to when you really need it, for critical updates or to replace malfunctioning equipment.
Website design or development (or re-design or development), updates, maintenance, integrations, improvements, registrar or hosting, stock photo or video, fonts.
The budget here will depend on whether you’re building a new site, in the market for a website redesign, or maintaining an existing website.
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Even if you have a fairly new website that you’re happy with, regular up keep of the site is important.
That means that regardless of how old your website is, maintaining it will be at least a minor ongoing expense.
Don’t forget secondary costs such as website hosting, font license renewal, domain renewal, etc.
Content creation, design, video production, publishing tools, analytics, file management, stock photo,video,audio, freelancers, marketing automation, monitoring services, webinars, social media tools.
Content marketing gained popularity originally, in part, due to the perception that it was “free” marketing — but that’s not the case at all.
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Sure, you aren’t paying to place an ad like you would in traditional “paid” advertising, but creating and distributing quality content that will really benefit your brand takes time, research and effort by a team of content marketing pros — and that all costs money.
Don’t forget secondary costs such as hosting your videos once they’re created and posted online (a cost that can increase over time as your library grows).
PR services, research or contact services, reputation marketing, events, award fees, dinners, swag, outside agency retainer fees.
Traditional PR is still very important, especially for large companies that are very visible in their marketplace.
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Brand perception takes a lot of effort to manage, and smart businesses invest in the tools it takes to make sure that they’re hearing about any potential PR trouble before it becomes a problem, and are responding smartly if it does.
Depending on your industry and overall company or organization budget structure, you might also have these categories to consider:
If your business or organization makes a product, then product marketing should be a budget consideration.
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It’s easy to overlook costs like message testing before the product development phase, so make sure you’re thinking about ways you can be proactive with product marketing that will save you in the long run.
Assign budget amounts to each category
Now comes the most tedious and challenging process of all — assigning a monthly budget cost to each category and line item you’ve established in your marketing budget.
The budget allocations will differ depending on the goals you established at the beginning of this process. The percentages you allocate to each major marketing budget category should reflect those goals and fit your industry.
Budget is an essential aspect of any business, it helps you know what your total spend is which will in turn help you make financial predictions in the nearest future.
Remember that budgets are meant to spread out overall costs on a monthly basis, so if you’re over budget in a given category on a certain month, take a step back and look ahead.
Is this a cost that is going to continue to exceed your budget, or will it correct itself later in the year when expenditures in this category might disappear entirely?
Or is there another category in which you can make cuts for a few months to make up for it?