According to the US Small Business Administration, businesses should be budgeting 7-8% of their gross revenue towards marketing and advertising. While this is a benchmark, marketing budgets can vary for each industry.
Figuring out where you line up compared to your competition can be daunting, but that is the first mistake. Remember, Every budget is unique. Here are a few tips to help put those marketing budget worries to bed and truly figure out what makes the most sense for your business.
Guide To Creating Your Marketing Budget
Simply follow this guide and you will be ready to create your new strategic marketing budget with more confidence.
1.) Create your marketing goals
Create and quantify your 3 most important marketing goals for the upcoming year. Then, figure out which marketing medium you will need to achieve your goals. For example, if you’d like to gain new customers be sure you set an exact number of new customers you’d like to gain on social media. Compare the numbers of your monthly averages over last year and don’t be afraid to set your goals high.
2.) Analyze your marketing data
Your individual business’s average click-through rate is of most value to you both year over year and month over month. While the industry standard click-through rate for display ads is 0.04% your businesses could be 0.78%. With great creatives, precise targeting, and relevant information refreshed constantly- anything is possible! If your CTR is higher than average then your budget planning would be significantly changed as your traffic is more likely to click compared to the average.
3.) Do the marketing math
Do your marketing funnel conversion rate math. For example, if your goal is to increase digital awareness about your business and you are measuring overall website traffic, then, you have to work backward. Working backward helps figure out how much money you have to spend on a paid ad campaign to generate clicks to your website.
For a display ad campaign that has a buy of 300,000 impressions, (average CTR is 0.04%), then you can project approximately 12,000 clicks to your landing page. Depending on your goals, you can adjust the impressions as needed to hit your target numbers monthly.
Resources for planning a marketing budget
Are you still having trouble writing your marketing plan? Let us be an extension of your team to consult you in writing your marketing plan and budget together. Contact us today!