The Art of Developing a Marketing Budget
The art of budgeting can be tricky. Companies are often lax about defining a specific marketing budget number and sticking to it, and this makes managing to a number very difficult. This type of ever-changing budgeting can lead to missed opportunities throughout the year and unexpected results and perceived underperformance at the end of the year.
Best practices call for a clearly defined marketing budget and a clearly defined, and measurable, plan to accompany it. If done effectively, this enables all parties throughout the company to understand the marketing goals, objectives, and deliverables. It sets the stage for marketing to perform as planned, and to report on metrics on a regular basis throughout the year. Of course, there is always a need for adjustments based on market conditions, resource constraints, or other factors, but it will give you a solid benchmark form which to make these decisions.
When developing the next year’s marketing budget, it is important to conduct external research on trends and innovations, as well as to stay abreast of competitors’ marketing, and to understand tends on marketing spend within your industry. Internally, you will need to be clear on the overall company goals and objectives and in alignment with the sales team, which is discussed here.
There is a lot of value in analyzing existing and previous marketing initiatives and their results. Look at the information objectively and make decision based on the data, not your ego. Another important consideration when developing a marketing budget that is often overlooked is resources. If your marketing mix is changing significantly from the current year to next year, you may need to rebalance your mix of in-house team members and outsourced resources. This could have a significant impact on budgeting.
Start by asking yourself the following questions:
Examine last year’s plan and metrics.
- What were last year’s marketing strategies?
- How effective were they in achieving their intended purpose(s)?
- Where would you like to make improvements?
- Where is your industry headed?
- How do prospects within your target audience move through the buyer’s journey?
Evaluate your resources and allocations.
- What is the cost and how will it impact the marketing budget?
- How many people will be needed to implement and support it?
- What is the time necessary to implement it?
- How will the expected results be used to improve other marketing efforts?
To learn more about developing a marketing budget for 2018, download KEO Marketing’s latest guide: “5 Critical Steps for Planning Your 2018 Marketing Budget” or contact us online today to further discuss your goals for the coming year.