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Marketing budget: how to do it in 6 steps

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Marketing budget: how to do it in 6 steps

How can you know if your marketing actions are effective to generate income? Keeping track of the costs and the return you get. As the first piece of this process, it is important to create a budget that distributes the investments you want to make in marketing for your organization . You may think that you do not have all the information to prepare it and that it is accurate, but it will also serve as a guide to understand your business. If you are responsible for the tangible and quantifiable results of the actions that your company undertakes to promote its growth and improve the generation of potential customers, you have to keep good control of all this. First of all, the figures must speak. Usually companies prepare a marketing budget after making a marketing plan or include this guide document as a final section within it. Whatever your case, assigning a marketing budget is a complex task.

Learn about planning and managing your marketing and advertising expenses with this article. In addition, we include a free template and steps to follow to make a marketing budget . list_altIndex of contents
What is a marketing budget?
Why is it important to make a marketing budget?
What to take into account when calculating a marketing budget?
How much should you spend on marketing your organization?
Steps to prepare your marketing budget
What is a marketing budget?
A marketing budget lists all the money that a business intends to spend on marketing-related actions over a specified time (typically a quarter or a year). A marketing budget can include different items to classify the expenses related to these proposed actions. For example, expenses such as online advertising, hiring for the team, specific marketing software, content creation in post or video format … It all depends on the needs that your business requires and where you want to allocate part of your resources to meet your business objectives. and marketing. hy is it important to make a marketing budget? The important thing is to have a reference guide to know the money we have for each type of action and marketing strategy. Developing a marketing budget is useful for: Know what funds to allocate to each type of resource and actions. This way you will know how much to spend for each marketing strategy. For example, if your goal is to improve the online positioning of your website and thus get more visits, you will have to spend more on SEO and content generation.
Control department costs. You can quickly see if certain items represent a greater investment than you anticipated and adjust your costs accordingly.
Dedicate more resources to the actions that work best . If you have greater clarity on the expenses of each of your marketing items, you can more easily assess your return on investment.
Have a reference history . You can use your previous budgets as a guide for future exercises and assess the changes that your company needs according to the results you obtain.
Set goals . If you decide to include a new item in your budget, take the opportunity to define what result you would like to obtain with it (you can use other items in your budget whose performance you already know as a reference).
Plan for the long term . It is very useful to do the exercise of specifying what actions you are going to carry out throughout the year, since it allows you to prioritize your efforts. In addition, if you monitor the fulfillment of this target budget, you will be able to better understand in which areas you invest more or less, and you will understand better the nature of the marketing of your business.
Understand marketing expenses as an investment and, therefore, an opportunity for the growth of the company. You will learn to generate more and better opportunities for business development, making the most of everything invested.
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What to take into account when calculating a marketing budget?
Sometimes the hardest part is knowing how much you can spend on marketing your organization.

First of all, it is important to differentiate between small, medium or large companies . Although the normal thing is that the more is invested, the more results are obtained (if we make good use of the resources); The smartest thing is to scale little by little and keep costs adjusted to each situation.As you know, you will need marketing to scale, so you will also have to consider other aspects, such as the nature of the business itself, the behavior of target customers through the buying process or the behavior of the competition .Second, to develop a marketing plan we have to assess the moment in which the company is, the market and its socioeconomic context . That said, it is not the same to budget for marketing items for a company that has just been born or that has just started its online journey than for a company with a considerable experience.Also, many companies changed the way they budget their marketing funds when the COVID crisis broke out.We summarize the aspects that you should take into account to consider the total of what you can allocate to your marketing funds:Calculate total income each year or quarterly. In this aspect we can differentiate between gross income and estimated income.
Consider the size of the business and whether it is new or established. A new company will need to invest more to fuel its growth than one that already has clients and a certain recognition.
Distinguish the big blocks between which your marketing budget will be divided: advertising in traditional media and digital advertising (paid media versus the rest of the marketing set).
How much should you spend on marketing your organization?
Taking into account the aforementioned, we have reviewed different sources and studies, and we can give you the following guides:For newly created companies , it is recommended to allocate 12-20% of gross income to marketing, while in established companies this figure would be 6-12% of gross income.
According to the June 2020 CMO Survey , the marketing budget was 12.6% of the company’s total budget. The highest figure recorded in this survey during its entire journey.This percentage varies depending on the type of company:

B2B product companies: 10.4%
B2B service companies: 9.9%
Product B2C companies: 20%
B2C service companies: 8.2%
In addition, the trend to invest more in digital marketing items is maintained, while investment in traditional media decreases.Steps to prepare your marketing budget
When the moment of truth arrives, this is the most convenient procedure to follow to prepare your marketing budget and direct your efforts to the best results.Meet your buyer persona and audit your funnelBefore starting to define the different items of your budget, take some time to audit your project.On the one hand, focus on the audience you are addressing. How is your buyer persona? Where do you usually consume information? Is your brand recognized by this audience?On the other hand, know your shopping funnel. That is, understand your purchase process well and identify which channels or actions you have to activate, maintain or eliminate from your marketing strategy.Where are you and what do you want to achieve? Understanding by which channels you generate new visitors and customers, or what your acquisition cost is, for example, will help you understand how to distribute your budget.For example, imagine that within your marketing plan you are looking to get a YouTube channel with thousands of followers, but right now you have more than 100 subscribers. The investment that you will have to make will be very different than if you already had a very popular worldwide phone number list and your goal was to maintain your leadership position.It is also important that you review your results.In this sense, the monitoring of results throughout the sales cycle through marketing automation software is of great importance. This tool will collect data such as the generation of leads per month, number of monthly SQL (conversion of qualified customers for sale), cost of these SQL, average income for each business deal or purchase, etc.Align your marketing plan with your business goalsWith your marketing plan in hand, review what actions you have decided to prioritize during the next quarter or year. Identify which of these actions involve a cost and of what type.I give you some ideas of possible items in a marketing budget:

Email-Database
 

Generation of content for the blogOnline advertising
software
Advertising in print media
Articles promoted in online media
Events (edit)
Website and blog maintenance
Graphic design
Formations
As a tip, never base your marketing budget on what you have left after covering all other expenses.Prioritize your activitiesAlthough it is tempting to include many different actions, always keep in mind your objectives and the results that each of the channels can offer you when allocating your budget.For example, within online advertising yu have many Betting Email List platforms on which to advertise. Reflect on which ones bring you closer to your buyer persona and allocate a larger budget to them.This does not mean that you cannot dedicate a budget to unproven actions, but if you do not have a very large budget you must carefully choose where you spend it to see results.Take into account your operational costs
Once you know the items in which you are going to invest and which ones are the highest priority for your company, evaluate if you have the necessary people to carry out this plan. Are you going to need to hire an internal team, an internship, part-time or full-time? Do you want to subcontract some actions to an external agency or consultant?Add these costs (even if they are approximate) to your budget to have a more complete view of the situation.Includes a contingency item
Above all, when you plan for a year ahead, it is possible that your initial plan is altered by factors external to your company or by internal changes.Add a contingency item that allows you to cover possible eventualities: a media campaign to get more exposure for a new product, a campaign with a press agency to counter a reputational crisis, an additional push to multiply the reach of a campaign that it is working especially well, an essential training for the team …Keep in mind that this budget should not need it. If you constantly use your budget for contingencies, identify what you are investing it in and modify your usual items taking this information into account.Check your results month by month
In your budget document, update the investment you have been making month by month. Having visibility on the planned expenses and the actual expenses will help you identify blind spots in your strategy and assess whether the budget you defined allows you to reach the marketing objectives set.Preparing a good marketing budget is a challenge, but the important thing is to start by taking the time to reflect on your current situation and your goals as a company. From here, and with the help of your marketing plan, identify what actions you want to carry out in the coming months and decide what budget you should dedicate to them.If your budgeted expenses end up being far removed from your actual situation at the end of the quarter or year, nothing happens. Take advantage of the lessons that this information gives you to define a better budget next time.With a good marketing budget , you will be closer to achieving your marketing goals and have much more control over the progress of your strategy. Try it and tell us your results!

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