This post was originally posted on October 13, 2014. It was updated in January 2023 with new/additional information.
It’s January – which for many of us means budget season. Whether your marketing budget is approved, facing the chopping block (again), or in some stage of preparation, budget planning is most marketers’ least favorite activity.
It can be a very daunting task to try to figure out how you will spend your precious marketing dollars – and also show your boss how last year’s spend produced quantifiable results – ROI!
How to Define Your Marketing Budget
You need to start with the assessment. My first suggestion is to take a very deep breath and review what you did during this last year. Dig into what marketing tools and channels worked and find out what could have worked better. This yearly marketing assessment process will lead you to discover the even more important answers to “what did our company not do that we should have?” to produce better results.
Here are a few marketing assessment questions to get you started:
- What was last year’s budget and where did we spend it? What were the core and key components to last year’s spend?
- How did we measure them?
- Did we course-correct when our measurements showed steps weren’t as productive as we wanted?
- How would we have done things differently?
- What works best?
- How will we know?
- What marketing communications tools did we deploy? Where did our target audience get their information?
- Did we map out our customer’s journey?
- What content worked best (written, video or podcast)?
- Can we show direct lead-to-sales paths (MQL to SQL), and what were the sales amounts?
It’s only after you’ve assessed the performance of your marketing success throughout the past year that you can truly create this year’s budget spend.
What You Need to Develop This Year’s Marketing Budget
To develop the overall plan for this year, you’ll need to start thinking about the important things, such as the channels you need to use. After that, you’ll need to look at company planned events, refine your channels, and fill in the details. One of the key ingredients to any marcom budget is showing what worked based on your measurement matrices. These measurements enable you to prove what worked, what didn’t, and how you will adjust your spend.
Here are some questions to think about as you develop your budget:
- What elements do we think we will need? Choose from broad stroke categories like:
- Website updates or development
- Public Relations
- Social Media
- What are our objectives and matrix for measurement for each component?
- What is the cost per element?
- Can we course-correct if needed?
- Are there any big product/service introductions this year? What is the launch budget?
- What marcom elements will we use for this launch and what is the cost per element?
- How will we measure success?
Marketing Is Constantly Changing
We all know that marketing is changing, and you need to determine how you will handle it going forward. That’s why doing the assessment is so important. You’ll also need to remember that social media will likely play a key role in your plans because that is one way people learn about products/services. Social media does not preclude using the other elements at all. It’s those other elements that help feed your social media.
The best part of developing your spend is you get to find out what worked and what didn’t. Once you have that 20/20 look-back, you can plan for the best execution for this year’s budget. It also enables you to show that – while marketing is considered an expense category for accounting – you can drive leads that salespeople use to close business. And, all while nurturing future business for your customers’ life cycle.
With the right tracking tools, like marketing automation and a CRM, you may even be able to show actual sales based on leads you brought in.
What is your biggest challenge in creating your marketing budget?
Contact us to learn more about maximizing your marketing budget.
Brandwidth Solutions serves the healthcare, life sciences, technology, and contract pharma industries. We work with companies that want to make the most of their marketing – who want their marketing empowered to help drive leads – and ultimately sales. If you want to move your product or service forward in a smart way, we want to work with you. Call us at 215.997.8575.