Finally, you took the plunge and invested in digital marketing services. As you sit down at your computer and start researching strategies, you’ll come across some prizes and stop. You say, “Wait, can I afford this?”
Without a marketing budget plan, you never know.
But the good news is that you now have all the information you need to plan your marketing budget for 2023.
What is a Marketing Budget?
A marketing budget records how much a company spends over a period of time. Marketing year, quarter, or month. When creating your marketing budget, consider all the costs associated with marketing your business, such as: B. Paid advertising, rental costs, marketing tools, website maintenance costs, etc.
Why does your business need a marketing budget?
Want to know why your business needs a marketing budget for 2023? Here are five top reasons.
1. It helps you stay on track financially
When you’re immersed in developing a marketing strategy, you need a budget to help you stay on track financially. By creating a marketing budget, you can track how much you’re spending on each strategy, whether you’re overspending, and whether you can spend more. Skipping creating a marketing budget can end up costing you a lot and can lead to business failure.
2. Helps allocate funds to the right places.
A marketing budget plan helps you allocate marketing resources to the right places. When you know how much you can spend, you know how much you can put into the marketing strategies you care about. This will help you decide which strategy fits your budget, or if a digital marketing company’s package fits your budget.
3. Helping you set benchmarks and goals
A clearly defined budget helps you set realistic benchmarks and goals that propel your business forward. Based on your budget, you can set realistic expectations for different marketing channels and better understand the revenue needed to make your marketing efforts worthwhile.
4. Helps you plan for the long term
Planning your 2023 marketing budget in advance gives you confidence and helps you plan your marketing for the long term. This long-term view means you won’t struggle to find additional marketing spend throughout the year or have to stop campaigns due to funding changes. While you should have some flexibility in your budget, long-term financial planning allows you to develop a more consistent and effective marketing strategy.
5. INVESTING TO GROW YOUR BUSINESS
When you think about investing in marketing techniques, you might think that marketing is just another expense of your business.
It’s important to remember that marketing is an investment, not an expense. Marketing is an investment in the growth and development of your business. Learning how to create a marketing budget can help your business get the most out of your investment.
How to Plan Your 2023 Marketing Budget in 6 Steps
Now that you know why you need a marketing budget, it’s time to start preparing and prioritizing your marketing budget.
Review the 6 key points to consider when setting your marketing budget.
1. Define your sales cycle
When creating your marketing budget breakdown, you need to set up a sales funnel. The sales funnel is an important part of your marketing budget because it determines what you spend your money on. The sales funnel is the process your audience takes to become a paying customer.
A typical sales funnel consists of four stages:
- Awareness: At this stage, your audience realizes they have a problem and starts looking for a solution.
- Consideration: In the consideration stage, your audience begins to look at the options available to them.
- Decision: When a prospect reaches the decision stage, they begin to narrow down on the companies that provide the best solution or product for their needs.
- Action: Once a prospect reaches the action stage, they choose your business and become a customer.
Understanding your business’s sales funnel can help you determine where your digital marketing strategy should be and prevent more people from falling off the sales funnel.
For example, Say you find that your company’s journey has many people in the consideration stage but few people in the decision stage. Some reduction is normal, but we find that the reduction is greater than expected.
As a result, you may find that you need to spend more money on strategies that help you move prospects from consideration to decision. Strategies like video marketing, pay-per-click (PPC) advertising, and social media advertising can help drive those leads down.
Therefore, understanding the marketing budget requires understanding the sales cycle.
Knowing the sales cycle can help you predict what strategy to invest in and help you budget wisely for your marketing plan.
2. Know your external costs
If you want to know how to create a marketing budget, start by identifying your external costs. To know how much you can spend on marketing, you need to know how much each business costs. So what external costs should you consider?
- Operating costs (product creation, delivery)
- Staff hiring costs
- Business operating costs (electricity, water)
These costs must be taken into account when creating a marketing budget plan.
Not only will it help you decide which services to invest in, but it will also help you set a baseline return on investment (ROI).
For example, a product costs $10 to produce. You sell your product for $50. So when deciding how to market your business, be aware of how much you are willing to spend to make a profit on the item.
This information will help you identify strategies to achieve the best ROI for your business.
3. Set business goals
Every marketing budgeting guide says you should set business goals, and you do. You need to know what you want to achieve in order to set a budget that will help you achieve your goals. You can set goals that focus on:
- Earning more sales
- Increasing leads
- Earning more subscribers
- Increasing brand awareness
- And more
When setting company goals, make sure they are specific and intelligent.
You don’t want to set goals like ‘increase sales’. It doesn’t give you specific goals to work towards and achieve.
Instead, set a goal like “Increase sales by 20% by the end of the year.” This goal is easily measurable and gives your team something to work towards. It also gives me a concrete point of reference when building my marketing budget because it tells me not only that I want to increase sales, but also how much I want to increase sales and the timeline for achieving that increase. I will too
Do you want to learn how to properly create a marketing budget? Start by adding your overall business goals so you can invest in the right marketing techniques to help you achieve your goals.
4. Understand your market
To create an effective marketing budget plan, you need to know where your market fits. Understanding how you stack up against your competitors will help you decide what strategies to use to compete with them.
I need to do a competitor analysis to see how my competitors are doing online. You can also use our competitor analysis tool to find out where your competitors are currently doing online.
It helps determine budget strategies to achieve success.
Use competitive analysis tools like Moz Competitor tool to analyze your competitors’ campaigns and gather ideas for your own campaigns, or social media monitoring tools to see what people are saying about your competitors on social media. You can track who you are.
5. Get an idea of the strategies you want to use
An important part of creating your 2023 marketing budget is choosing a strategy. You don’t have to be 100% sure which strategy you want to use, but you should know which strategy works best for your business. There are many digital marketing strategies you can use.
- Search Engine Optimization (SEO): SEO is the process of increasing your website’s ranking in search results to drive more relevant organic traffic to your site.
- PPC Advertising: PPC ads are paid advertisements that appear at the top of search results pages and on other websites. These ads allow you to reach more potential customers who are ready to convert.
- Social media marketing: Social media marketing allows you to connect directly with your audience and provide useful content. This strategy allows you to build relationships with potential customers and convert them into customers.
- Social Media Advertising: When investing in social media advertising, focus on creating compelling copy that targets specific prospects. These ads appear seamlessly in your feed, helping you build brand awareness and generate more leads.
- Email Marketing: Email marketing allows you to convert leads by sending them custom content that matches their interests.
Send promotional emails, exclusive offers, abandoned cart reminders, and more.
- Content Marketing: Content marketing can drive more leads to your website by sharing valuable information with your audience. Whether it’s a blog post or a video, you can share your knowledge with your audience and establish yourself as an authority in your field.
- Local SEO: Use Local SEO to optimize your local keywords and register a Google Business Profile to increase local traffic to your business. Below is an example bank statement for GBP.
- And more!
When creating your marketing budget, you should think about what strategies you want your business to use.
Once you know which strategies to invest in, you can determine how they fit into your marketing budget plan. This leads to the next important factor in planning your marketing budget.
6. Pricing Your Research Strategy
Whether you run the campaign yourself, hire a freelancer, or hire a digital marketing agency, you need to know how much it will cost. Marketing budget allocation should focus on how much each strategy costs your business
- In-house: If you choose to stay with your in-house team, costs will come in the form of wages and materials you need to run your campaigns. You may need to hire outside help or invest in tools to manage your campaigns.
- Freelancers: Freelancers are people who specialize in one type of strategy or dabble in several of them. If you hire a freelancer, you’ll usually be paid by the hour or by the project. Prices may be higher if the freelancer is more experienced or uses software that is included in the price.
- Digital Marketing Company: If you hire a digital marketing company, you will get everything you need from tools to people.
Unless you are doing a one-off project, you will be paying monthly to keep the digital marketing company on standby.
Usually, when you’re busy running your business, you should turn to a digital marketing company. This gives you someone to manage your marketing strategy and budget while you handle other aspects of your business.
How much do professional digital marketing services cost? For your reference, here are the ranges you can expect from a digital marketing company when it comes to your online marketing strategy.
- SEO: $500 – $20,000+/month
- PPC: 5-20% of monthly ad spend
- Content Marketing: $2000 – $20,000/month
- Social Media Marketing: $250 – $10,000/month
- Email Marketing: $300 – $2500/month
These prices vary depending on your business and needs.
But in this section, we’ll tell you what to expect when working with a digital marketing company.
Knowing these costs will help you better prepare your marketing budget so you can apply the strategies that will give your business the best results.
Goals can be adjusted any number of times. To discuss your marketing budget with a strategist, call (408) 982-5851 or request a free quote online.
How to Calculate Your Total Marketing Budget
If you want to know how to calculate your total marketing budget, this data-driven breakdown will help you create your marketing budget. By examining industries and their average marketing spend in the table below, you can get an idea of how much a business should budget for its marketing plan.
|INDUSTRY||MARKETING BUDGET (% OF COMPANY REVENUE)|
|Mining and construction||3%|
|Consumer packaged goods||9%|
|Banking, Finance, Insurance, and Real Estate||8%|
In addition to industry, companies can also look at age and overall market.
- Age: Companies aged 1 to 5 should invest 12% to 20% of revenue in marketing, and companies over 5 years old should invest 6% to 12% of revenue in marketing. There is
Overall Market: Business to Business (B2B) Companies Need to Invest 7% to 8% of Sales in Marketing but business-to-business (B2C) – businesses need to invest 9% of their revenue in
But remember that every business is unique. When creating a budget, it’s important to consider your company’s goals. Depending on your organization’s goals and overall business strategy, you may choose to create a marketing plan budget that is higher or lower than the industry average.
To create a targeted marketing budget, set your target cost of acquiring new customers and the number of new customers you want to acquire through marketing.
Then multiply these two numbers together to sum all the fixed costs.
Let’s say your target cost per customer acquisition is $300 per customer, you want to acquire 200 new customers, and your fixed costs are $10,000. In this scenario, we use the following formula:
- (300 x 200) + 10,000 = 70,000
Therefore, we need to spend a total of $70,000 on marketing to reach our customer acquisition goal. As you run your marketing campaigns, you can track how many new customers you’re acquiring and the cost per acquisition to see how your campaigns are performing and what adjustments you need to make to improve their performance.
Start Preparing Your 2023 Marketing Budget Planning Today
If you’re ready to start planning your marketing budget and hire a marketing agency, Xekera Systems can help. With years of experience, we know how to create a marketing budget that fits your business’s unique needs.
As a business marketing company, we help you choose strategies that fit your budget and drive business results. For more information, please contact us online or call (408) 982-5851.