How to Write a Marketing Budget
How to Write a Marketing Budget
It can feel a little daunting to write a marketing budget for someone who doesn’t know quite where to spend their money, but it may surprise you that even an experience agency doesn’t know exactly where they’ll spend the money. They’ll have a hunch, but a good digital marketing agency they’ll need to test and measure before committing their customers’ hard-earned dollars.
In this article, we’ll break it down for you to be equipped with a basic understanding of where to test, and we’ll even give you a free marketing budget template to use.
First and foremost, you need to determine what percentage of gross profit you’ll spend on marketing. A healthy high margin, low overhead business turning over $600,000 with a gross profit of 82c from every dollar of revenue could easily decide that 10-15% is the correct amount to spend. Whereas a business turning over 12 million with a 30% GP might only want to factor in 2-4% of Gross profits. Obviously, from a marketers perspective, the more, the merrier, but you’ll need to factor in your overheads.
Still, you might be wondering how much do I need to spend on marketing to get results. The answer depends on the strategy, but you can check the marketing budget template below for an example of costs in Australian dollars at the time of writing in 2021/2022. In this template, you can strip out all sorts of costs if you which but understand that marketing is like an engine; you need to be firing on all cylinders to catch momentum.
You also need to factor in who’s going to drive your marketing. It’s a full-time job, and many business owners try ad DIY this unsuccessfully. Team up with a digital agency like Thinkroom or a marketeer that has a history of being a marketing c-ordinator and has many contacts they can call on for services. Marketing is a broad term, and one person can’t do it all, let alone possess the understanding that a senior-level team does.
Why You Need a Marketing Budget Template
A marketing budget template can offer some structure to how you spend your money. Say you set your marketing spend at $3,000 each month. There are literally hundreds of ways you could plan to split that up to generate leads and find new customers.
You could split the money evenly between Facebook ads, Google ads, and updating your website content. You could allocate a portion to a complete search engine optimisation (SEO) overhaul for your website and split the remaining budget between three ad platforms.
Without a budget, it would be easy to lose track of what you’re spending the money on, and you may forget to check the results of your efforts.
Thinkroom creates a budget for each customer as a tool to pre-agree an overall spend while breaking our assumed costs into sections so you know where the money is being spent. We like to operate this way with a complete open-book approach to avoid any discussion about money down the track. It keeps everyone happy.
Should You Spend Your Entire Budget Each Month?
Not necessarily! For example, at Thinkroom, we set a budget and then, we test different strategies and measure the results releasing only small increments of the value before we use the entire budgeted amount. The plan has to be flexible according to where you can get the most bang for your buck.
It’s useful to have a budget created for you by an agency because it’s a considerable waste of time for your marketing agency to constantly check with you whether a cost is ok or not. Set the budget once, and then there’s no need for micromanagement.
If you’re working with a marketing agency, you should expect that they will spend less than the budgeted amount each month. Otherwise, they are likely overspending on areas without regard to tracking the results.
What to Include in a Marketing Budget
There will always be unforeseen costs popping up that don’t fit into the usual categories of ads, website updates, research, events, etc. That’s why every marketing budget template should include a miscellaneous line for expenses that don’t fit into any other category.
Broad Range of Options
Your marketing budget should be broad, as this allows the marketing agency to calibrate the plan upon learnings. As an example, say you’ve set a PPC (pay per click) budget. This should be able to be used on Facebook, Pinterest, or Google ads as opposed to setting a budget for each social media platform individually. That way, the agency can easily switch to the platform that offers you the most benefit right now.
Focus on Goals
When you’re thinking about how you will split your resources, you need to consider what the goals in the marketing plan for your business are. Are you more interested in lead generation, web traffic, or brand awareness?
If you’re running a wholesaling business, lead generation might not be your primary goal, whereas brand awareness and web traffic that you can divert to your retailers could be the winning strategy. What you choose to spend your money on will be highly dependent on your strategy, so set KPI’s, use Google Tag Manager to measure your results and make sure you consider these goals when filling out our free marketing budget template.
Content marketing is a crucial part of any digital marketing plan. You obviously need compelling content on your website for readers to stay engaged. You could create a resource that people can sign up to download or a blog that draws people to your website. You’ll need clever headlines for social posts and ads. These are all valuable tools for your marketing strategy and are often underestimated. Don’t forget that content marketing can inform more people about your product; you can recycle the same content on many different platforms or email campaigns which all help to generate leads.
Marketing Agency Cost
What you pay your marketing company for their services should be included in your budget. If the cost of the agency is more than half of your total monthly marketing spend, this is out of balance.
If you pay employees instead of an agency, include their salary in the budget. Again, if this costs you more than half of your total spend, it might be cheaper to outsource your marketing work to Thinkroom instead.
The cost of hiring a senior-level marketing employee in Australia can range from 80-120k per annum. If you’re serious about growth, your advertising spend needs to be at least $30,000 a year, including related expenses such as software. This will offer you a marketing strategy that is well-rounded and set up to start leveraging compounding growth.
At Thinkroom, our team of experts are here to ensure that you get the best results for every marketing dollar you spend. You could not only save money by outsourcing your marketing to an agency but also get more profit from every marketing dollar, thanks to our consistent analysis of the results from our efforts. We track the advertising reach, sales made, and other factors to determine how to spend your money for the best possible ROI. Contact us today to find out more.
Free Marketing Budget Template
As promised, here is a very simple and free marketing budget template. You’ll see that it’s got multiple tabs with example numbers of what you might want to budget as a starting point. Each tab represents a different type of strategy. If you have any questions, we’re more than happy to help.