We get it: no one likes keeping a budget, making a budget, or even thinking about a budget. However, when it comes to your B2B company, non-profit organization, or e-commerce business, a marketing budget is not only necessary but can help you increase your ROI.
Whether you’re running a business of one or one hundred, marketing is vital in expanding your reach and connecting with your ideal customers. Part of successful marketing is creating a budget that works with your available resources and optimizes your efforts. So, what exactly is a marketing budget, and why do you need one? Don’t worry—we’ve got the answers! We’ve compiled a quick guide to marketing budgets: the basics, the benefits, and where to begin.
Understanding Marketing Budget Essentials
What is a marketing budget?
A marketing budget outlines how much money a business spends on marketing efforts. Covering a set time period—from a quarter to a year—a marketing budget includes all marketing-related costs broken out by different marketing channels. Depending on your business, marketing channels could consist of content marketing, email marketing, paid ads, and social media.
A marketing budget offers a clear sense of direction for the strategy and management of your marketing and provides a means to analyze results. It outlines how much money will be allocated for different categories and specifics of marketing expenses. These expenses might include:
- Content marketing with subject-matter expertise and entertaining content created to deliver value to interested audiences and potential customers.
- Email marketing through direct, digital efforts to promote your products or services, grow brand awareness, generate leads, and build long-term relationships.
- Paid advertising with PPC, PPI, or display ads that drive traffic and kickstart revenue growth.
Social media marketing that combines paid and organic content to connect with audiences, expand your reach, increase sales, and fuel traffic to your site.
- Events and swag that spread reach and boost awareness for your business.
- Platforms and devices used to create and track content and campaign efforts.
- Professional support to help support strategic, successful marketing with expert guidance and execution.
Your ideal budget should be informed by your business’s unique needs. Aspects that inform your marketing budget include your sales funnel, operational costs, business objectives, and current marketing trends. Additionally, part of creating a budget involves defining your short and long-term goals and how much money and time you want to dedicate to achieving each goal.
In short, a marketing budget breaks down the details of your marketing investments so you can analyze the ROI of your marketing efforts.
Why is a Marketing Budget Important?
In short, making and sticking to a budget supports your business’s bottom line. It ensures you manage your capital strategically, optimize your available resources, and stay on track with a plan.
The importance of a marketing budget isn’t just determined by how much you can spend but by what you want to achieve with that spending. Without a budget, you run the risk of overspending on underperforming marketing efforts. Small and medium-sized businesses that keep expenses in check through a budget can achieve more with less. You can dedicate resources where they make the biggest impact!
Who Does a Marketing Budget Help?
Marketing budgets benefit everyone involved in the marketing process from the planners and creators to the end user. Business owners, marketing managers, and sales leaders all use a marketing budget to make informed decisions on how to best utlize their resources. Bonus—if done well, a strong and cohesive budget even benefits customers. Clarifying marketing efforts with an acute, tactical lens produce the best results, which can inspire people to partner with your brand.
Marketing budgets are beneficial for:
- Business owners who want clarity on their expenses and ROI.
- Marketing managers who need to build out a strategy, create content, and analyze results.
- Sales leaders looking to connect with interested, engaged leads.
- Customers in need of quality goods and services and who want an enjoyable marketing experience that recognizes their individuality.
How does a Budget Impact ROI and Marketing Strategy?
Sometimes, things go as planned the first time around with your marketing strategy. Other times, marketing efforts either overperform or underperform relative to the initial investment. Changes in business offerings, in the industry, or in audience behaviors can impact your ROI and future marketing strategies. But determining marketing ROI and strategy is next to impossible without a budget. Tracking expenses and results is the best way to decide where and how much to invest. When you plan, execute, and then measure your efforts, you can fine-tune strategies and amplify results.
By focusing your marketing efforts through the lens of a budget, you can create more value than would be possible with unlimited resources. This often means a greater ROI for your business. With limits on our resources, we are forced to “sharpen the sword” and ensure all efforts are aimed at a specific target instead of casting a random net to the murky marketing waters. Instead of the “freedom” to try anything and everything, we allocate our efforts in ways that will resonate with the people we’re trying to reach. A budget’s constraints are opportunities to deliver targeted, meaningful messages with consistency. You can better create strategies that build trust and loyalty in the eyes of potential customers.
A Budget is Key to Marketing Success
In the end, if you want to reach your business goals, a marketing budget is essential. The right marketing investments help business owners allocate resources, execute campaigns, stand out in crowded markets, and attract loyal customers. This combination of tactics helps increase sales and revenue, helping you reach your ROI goals. Whether you’re aiming to cultivate leads and long-term relationships or build brand awareness and increase sales, a budget is key to successful, impactful marketing.
Ready to level up your marketing efforts but need help figuring out where to begin? The Big Storm team specializes in executing targeted digital marketing strategies tailored to your business goals. We are your boots-on-the-ground support system, here to clarify the complexities of marketing (and your marketing budget). Contact us today to chat about your marketing needs and see how we can help you optimize your marketing spend, reach more customers, and grow your business.