Things You Need to Know When Building a Marketing Budget

No matter the size of your brand, there is a universal truth in marketing:

Budgets are hard and they’re often surrounded by a great deal of uncertainty.  

How much should we spend? How should it be allocated? Is that amount enough? Are we investing too much? What should be included?  How should we track ROI? Where the hell is the bourbon?   

If this sounds familiar, you’re in the right place. Let’s be clear, there is no silver bullet. However, getting a handle on the following factors before you dig in will help you navigate budget decisions with more confidence and peace of mind.

THINGS TO KNOW…

Your Goals

I don’t care what else you know, but you need to know your marketing objectives. If you don’t know what you’re trying to accomplish, how can you possibly determine how much money to allocate? If budgeted expenses don’t move the needle for your objectives, it might be time to consider their necessity.

Your Numbers

Closely tied to objectives, you need to have a grasp on your balance sheet – revenue, expenses, profitability, customer acquisition costs, etc. Understanding your numbers will ultimately determine what you can afford to spend to accomplish your goals.

Your Competitive Landscape

Keep tabs on what your competitors are doing. Where should you invest to strategically gain a competitive advantage? It’s certainly not the only factor, but it’s important to have a benchmark.

Your Metrics

You can’t move forward until you look back. Review analytics of current or past marketing efforts to evaluate performance and effectiveness. This exercise allows you to spend smarter, prioritizing expenditures based on their impact.

Your Method

The size and complexity of your marketing budget will vary by the size and complexity of your business. There are a variety of methods for how you build your budget – percent of sales, task method, zero-based, or a combination of multiple.

Your Contingency

Just because you make a plan doesn’t mean you can’t change it. Your marketing budget should be agile and responsive, so you can nimbly react to what is (and isn’t) working. If you’re seeing a greater return from a particular tactic, don’t be so inflexible that you can’t consider reallocation or increased investment.

Building a budget requires evaluation, research, conversations, and yes … good ol’ guesstimating. Need a second pair of eyes?