Setting Your Marketing Budget To Get Results
By Kristine Carey
Setting your marketing budget can be challenging and knowing where to start can be overwhelming. It is important to set up a budget with key objectives so that you can prioritize and measure your success. While the focus of this blog post and budget recommendations are intended for consumer packaged (retail) goods it can be flexed to any type of business.
- Start with your marketing strategy - define your plan of action to attain your company’s vision and gain awareness
- Set your marketing budget - start small, test, and learn
- Prioritize your marketing tactics - the fewest biggest steps can be impactful
Be realistic with the tactics and resources you are allocating - people and dollars. What categories of marketing tactics are most important to connect with your target audience? I have included a downloadable excel spreadsheet that I have bucketed the different categories you should consider for your business. When determining your priorities look at this as an evolving process, not a one-time exercise. Your marketing strategy should be focused but it is also a test and learn model. You should always be learning and adapting to what is and is not working.
I have included 10 key categories for marketing spend. Each one can be customized to your specific marketing tactics and highlights a few ideas where you can direct your dollars. As a small business, you don’t have to allocate spend to every category. Do what is right for your business and prioritize where you know you can see ROI.
A common rule of thumb is that B2B companies should allocate 2-5% of revenue on marketing, while B2C companies should spend between 5-10%. In the downloadable Brand Guide Marketing Budget Template I have provided percentage values for the top nine categories. The percentage is only a starting point for the template and will be based on your type of business and your target audience and ultimately your actual budget dollars. Make this template your own and remember to start small, test, and learn.
This category relates to all your social media platforms and campaigns. It is the development cost, any promotions, or giveaways. It is not paid advertising for these campaigns as those dollars live in the advertising category. If you used a social media agency or freelancer to help with development and monitoring you would put that spend here. I recommend quarterly “Power Promotions'' where you can conduct featured campaigns that last 2-3 weeks and really engage your audience.
This category includes your interactions with the media and influencers to gain increased awareness through third-party credibility. Consider thought leadership speaking opportunities, working with a PR agency that has developed relationships with industry or business media. The partnerships you develop with influencers should live in this category.
Ecommerce and Email Marketing
This is a crucial bucket to connect digitally with your consumers through your website and to create loyalty and advocacy with your fans. Consider the development and maintenance of your website and your email marketing interactions and promotions.
Truly a bucket that is a big spender, especially in today’s world of increased digital purchases. Your digital advertising spend like Facebook and Google Ads along with any physical print dollars with key retailers.
Promotional Marketing Materials
You definitely need a bucket to spend toward your printed materials for sales and direct mail components like a catalog or flyer. Include SWAG (stuff we all get) like wearables for ambassadors and fans.
Packaging and Displays
The development of packaging and displays for a consumer packaged good company is contained in this budget category to include the collaboration of the design with a creative agency or freelance graphic designer.
You know them, we used to hate them but today it might be nice to socialize and talk to some friends at the annual industry trade show. So depending on virtual vs in-person events, this marketing bucket will house your industry show participation.
Community Events (not demos)
If your company really connects well with your consumer at events - virtual or in-person - this category will fluctuate your spending. Consider any event you might collaborate with for sampling or for thought leadership. Farmers’ markets, music festivals or a local 5K run event are all great places to sample your products. I do not include retail demos in this bucket. Demos typically fall into the sales category.
Be sure to allocate a cost to the samples the marketing team uses for event displays, influencers, PR, give-aways, social media, and marketing campaigns.
E-Tailer Vendor Spends and Brick & Mortar Vendor Spends
This spend can sometimes live in the sales budget, but in my experience, I have also had it live in the marketing budget. Promotions with retailers, Amazon marketing services or a loyalty program.
I hope these categories and descriptions along with the actual spreadsheet template are helpful to you and setting your company marketing budget. The key is to prioritize and preplan the spending. My favorite saying is fewest, biggest steps as I know we can’t do it all. Consider one or two areas to focus on so you can determine results and manage the spending. Be prepared to adapt, improvise and adjust as you test and learn but having a starting point is crucial to your success. Good luck on your budgeting journey.
About Brand Guide and Kristine Carey
Brand Guide supports consumer packaged goods companies in the start-up and growth stage who struggle with inconsistent brand messaging and the execution of that messaging and would like to find a clear path to spark a change in their communication strategy. Brand Guide enables teams with smart marketing insights that take into account the stage of their business. For more information or to setup a complimentary discovery call visit www.kristinecareybrandguide.com.
*Header image courtesy of Proximity Space.