Marketing Budget Breakdown: How to Create a Digital Marketing Budget
So you have a bunch of marketing ideas but you need to prioritize and work within a budget. Review these tips for a successful marketing budget breakdown
You’ve watched as competitors’ sales soared while yours took a nose dive. You know you have to invest in digital marketing, but how much?
Where should the money go? What do you want to do? These are all questions you need to answer before creating a marketing budget breakdown.
A well-researched and developed marketing budget increases sales and grows your company. The alternative can leave your bank account low with little impact on your sales.
People spend millions each year shopping online for the same products and services you sell. You’re not getting your piece of the pie.
Don’t haphazardly do digital marketing. Instead, develop a marketing budget and follow through with established steps and achieve your goals.
Develop Your Goals
The first step to a marketing budget is creating goals for the year. What do you want to do? You need to have specific digital marketing goals in mind if you want to develop a working budget.
Do you want to add 20 percent in revenue for the first quarter? Do you want to increase newsletter subscription by 15 percent? Do you want to launch a new product?
Your goals are the blueprint for your budget. Your goals shouldn’t be one sentence each. They need to have actionable steps that you can estimate a cost.
If you want to launch a new product, then what will that entail? Do you need a WordPress website set up? Do you want to push Google Ads, content marketing, social media? Each of these services will come at a cost.
Do you plan on doing it all yourself or hire an agency to do most of the heavy lifting? That’s going to have a cost.
Determine Your Overall Marketing Budget
This step determines how much you’ll have to spend on all your initiatives for the year. How much should you spend on your marketing budget? The general rule is that 10 percent of your company’s budget should center on marketing.
If you’re a brick and mortar business, then this would be a mix of traditional marketing and digital marketing. The total amount for your budget can be more than 10 percent, depending on your marketing goals, brand recognition and if you hire an agency.
There are many marketing budget templates available for download. These provide a great way to organize your budget into its various avenues.
The Marketing Budget Breakdown
You’ve developed goals. You’ve got your budget set. Now comes the hard part, breaking it all down.
Break the budget down into categories such as organic SEO, paid advertising, social media, etc. and then consider each category and break it down further.
Paid advertising covers many facets. It could be print and radio ads, Google PPC ads, Facebook ads and more. Social media can be the cost for a social media management plan, payments for boosted posts, cost of professional photos or videos for Instagram and YouTube.
When developing your budget breakdown include everything marketing related. This can be web design for everything from a new site or landing page to content marketing and blog writing.
Don’t put money into social media because you feel there needs to be something in social media. What are you going to do with it? How will these methods further your goals?
How much do you put into each marketing area? The breakdown of the marketing solutions lets you give each one a monetary value. It’s important that enough research goes into marketing to have a reasonable expectation for money allocated.
For example, don’t expect miracles of your Google Ads campaign if you’re not putting much money into it. The amount allocated should take into account bids, keyword competitiveness, agency handling, etc.
Each section should have reasonable amounts for them. If you run out of money before you get to the end, then either increase the budget or restructure your marketing efforts. Once the budget is implemented, it’s hard to account for discrepancies.
It might be difficult to find the extra 15 percent when Google Ads goes over budget. What happens when the cost of social media management increases because you added Instagram management to the marketing plan? Make sure you give yourself enough wiggle room within your budget for unexpected costs.
What to Do in Emergencies?
You can research and create the perfect marketing budget for your year, but there’s always going to be a hiccup. Earlier, we emphasized the importance of planning for the unexpected.
If you don’t, it can be hard to manage.
When it comes to budgeting almost anything, it’s a good rule to keep 10 percent open for emergencies. You’re server crashed. Facebook suddenly charges for posting. Your viral video reached 4 people.
This helps to buffer the unexpected. It allows you to expand if your Instagram marketing goes well and you wanted to expand.
Don’t Be Afraid to Adjust
You may find as the year progresses that you over or underestimated the cost or effectiveness of various marketing avenues. Perhaps your Facebook ads cost ½ as much as expected and you’ve got a little wiggle room.
The key to adjusting the budget is making sure everyone involved knows and understands the change. If you have several team members for digital marketing and you add 15 percent to Facebook, but take 15 percent away from Google Ads, notify everyone.
Google Ads team may not like the change, but they won’t continue on as if nothing happened, spending the money. If you add something to one area, then you need to take something away from another. Everything must be in balance or else it’s not much of a budget.
Don’t Cut out Marketing
When times get lean, the first thing to get cut is usually marketing. Your marketing budget leads to sales and conversions, but only if you run it within a budget. If you’re looking to cut costs, don’t do it with marketing. Instead, focus on restructuring your marketing and creating a marketing budget breakdown.
If you want to learn more about budgeting and digital marketing, then feel free to explore our resources.