In this blog series, we will explore components needed to craft a bold marketing strategy.
A well-considered marketing budget is essential to be sure you are on track with estimated costs versus actual costs. The irony of not setting a marketing budget is you are likely to overspend on marketing. Having a financial benchmark in place allows you to determine which marketing channels you will use, what parameters your creative may or may not need to consider and whether your goals are attainable at the budget you have set.
There are several steps to take when developing your budget:
- Identify your SMART marketing goals
- Understand your target audience and buyer personas and what problem you solve for them
- Understand your market, your competition and your position in the marketplace
- Choose your marketing channels
Traditionally many businesses determine their marketing budget as a percentage of revenue. A rule of thumb experts suggest is 7-11% of annual gross revenue, however, this can vary based on overall business goals, age of the business, competitive environment, etc.
According to “The CMO Survey,” sponsored by Deloitte, the American Marketing Association, and the Duke University’s Fuqua School of Business, CMO’s around the country project increasing overall marketing spending by 10.1% over the next 12 months, bouncing back from slashed budgets due to COVID in 2020.
Depending on your company’s goals and current situation, you can use these rules of thumb as a starting point to determine your budget. You may consider 3-4 key campaigns for the year to begin your strategic marketing plan. Based on the cost of those campaigns, you will then have room (or not) for additional marketing throughout the remainder of the year. Side note – if your campaigns are not properly funded, it may make sense to eliminate one altogether. Return on investment is higher on a well-funded campaign, rather than an underfunded one. The result of an underfunded campaign is scattered, diluted, ineffective marketing.
Marketing is often a system of trials and errors, so set aside 10% of your budget for experimentation and testing — you may find your new strategy, increasing overall marketing ROI. This doesn’t mean throwing money at a pet project without truly measuring its effectiveness.
Consider your marketing budget as an investment, not an expense. Your marketing spend is integral to growing your business, producing measurable results over time. Lawton has the expertise (sprinkled with some awesome creative energy) to take your marketing to the next level. Our team can help you maximize your marketing budget on the front end, so give us a call when you’re planning.
You’re here to be awesome! We’re here to help. Let’s be bold!