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You get what you pay for, meaning that even free marketing still comes with a cost. For example, somebody has to do the work, maybe some materials need to be created, or there’s a cost to promote the campaign to more people. So it’s good to understand a general overview of a marketing budget breakdown.
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In this article, I discuss the following:
- Marketing budget breakdown overview
- The importance of a marketing budget
- Marketing budget percentage to allocate
- How to create a marketing budget
Marketing budget breakdown overview
A basic marketing budget breakdown includes these categories:
People cost
Whether you are hiring freelance help, using a project manager, or hiring mostly an in-house team, somebody (people) needs to do some of the work. So there’s a cost included here, and depending on the team setup, it could also be a mix of freelancers, agencies, and in-house.
Read next: How teams can drive content performance
Technology cost
Technology has become an integral part of marketing teams and is also reflected in the budgets. That can include:
- Artificial intelligence content creation tools
- Email marketing software
- Lead generation software
- Live-streaming and/or podcasting software
- Search Engine Optimization analysis software
And more…
But technology helps marketing teams be more efficient, get more done in less time and know what’s working and what isn’t.
Read next: What do marketers do on a daily basis?
Promotions cost
This can include branded apparel, conference sponsorships, and other costs to reach audiences digitally through ads. Even if you aren’t planning on doing much of this, it’s worth considering if it connects you to the right people.
Read next: 5 Ways Answering Faster Can Help Generate More Qualified Leads and Increase Sales
The importance of a marketing budget
Having an actual marketing budget is essential, even when a marketing team is just being stood up for the first time. Be clear about the budget and how it will be used most efficiently – keeping short-term and long-term goals in mind.
Having a marketing budget also helps teams manage against something. If we have this budget to spend, how can we use it in the most beneficial way to reach our goals?
Read next: Unlock the Components of an Effective Marketing Strategy
Marketing budget percentage to allocate
How big should a marketing budget be? It’s often tied to revenues and could be as high as 10 percent. But it’s also good to think of marketing as an investment. So companies may sometimes have to spend more or differently than the best practices say.
Read next: Unlocking the Potential of AI in Marketing
How to create a marketing budget
I would highly recommend partnering with the finance team here. Use whatever budget breakdown “template” or platform they use. They likely already have a spreadsheet or spreadsheet-type document that you can use.
As you think about what you need, look at last year’s budget as a base. But also consider what else is required. For example, a team that has used the same budget items for the last 15 years will likely have room to make updates in any major categories.
Then consider what you are trying to achieve and what the cost is. For example:
- If conferences work well, consider the cost of travel, the number of people needed, sponsorships, etc.
- Consider the best ways to get started and implement SEO strategies. What people power is needed, and what software tools can help us improve results?
- Email marketing: Consider how much it costs to subscribe to a useful platform and how much it will cost to run the email marketing program.
Sometimes cheaper isn’t cheaper when you must redo the work later anyway. That’s why it’s important to hire the right people with the right domain expertise to help teams. To accomplish that, it’s essential to have the right budget.