Marketing Budget Creation: Tips for Setting Marketing Expenses

A marketing budget allocates funds that a company has set aside for a marketing strategy. A company uses this budget allocation to develop a marketing plan that will accomplish both short-term and long-term goals. A budget plan can prevent your marketing team from overspending, and it will encourage investment optimization through metrics and measurable marketing goals.

Small business owners should take personal resources, goals, and current market share into consideration when developing a marketing budget. Here are tips for preparing a marketing budget template:

1. 1. Make a flexible plan. Allow your budget to evolve with an ever-changing marketing landscape. Allocate a majority of your marketing budget to tried-and-true strategies; however, leave wiggle room to invest in emerging channels and social media platforms.
2. 2. Set an allocation limit on marketing expenditures. The US Small Business Administration recommends digital marketing campaigns and real-world marketing costs do not total more than seven to eight percent of a company’s gross revenue (provided the company brings in less than $5 million annually and its net profit margin falls between ten and twelve percent). Keep in mind a small business or startup might need to spend more to increase visibility and market share in saturated markets. Analyze your competitors and design a strategy to maximize your marketing investments.
3. 3. Utilize market research and maintain customer data. Keep up-to-date records of your marketing activities and the return on investment (ROI) for various marketing channels. For example, if most of your marketing dollars go toward booth rentals at local trade shows, but email marketing campaigns produce significantly more inbound leads, you should reallocate marketing expenses to the more effective sales funnel.

Marketing strategies often require multipronged approaches—for example, a combination of digital advertising channels and marketing automation techniques—to attract new customers. Here are four areas you might allocate resources in a marketing budget:

1. 1. Content marketing: Hire a crew of writers, designers, and other artistic freelancers to craft engaging content that will connect with potential customers on a personal level. An effective and consistent content marketing strategy can help your business become an industry thought leader, create brand loyalty, reach more customers, and educate buyers.
2. 2. Pay-per-click marketing: With a pay-per-click (PPC) advertisement (a monetized strategy to increase visibility), a marketing department spends money every time a potential customer clicks on a link or banner ad. This strategy funnels qualified leads to a sales team.
3. 3. Search engine optimization: Use search engine platforms to bid on keywords and search phrases as part of a search engine optimization (SEO) marketing strategy. Your company can use these words and phrases in content pieces and articles to land your content on search engine results pages.
4. 4. Social media marketing: Post social media ads on popular platforms to boost public relations and build brand awareness. Social media has become an important communication tool for companies wanting to increase their social media presence and connect with potential clients.

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