Marketing Budget: An amount that the marketing team spends on activities which helps promote your products or services.
It is your investment in your company and you need to grow your brand and revenue.
This definition may seem straightforward, however it is actually difficult to keep a tab on this amount. There are two main reasons why companies can’t efficiently implement their marketing strategies;
a) Either they do not invest enough money into marketing or
b) There is no track of whatever amount is invested into marketing. The latter being more harmful as you end up losing your hard earned revenue.
Digital marketing has opened up a whole new set of problems for most marketers. In the old days of marketing (before the Internet) companies had 3 or 4 different channels. Now a company can easily have 8-10 different channels from social, blog, SEO, SEM, content marketing and others. Each different channel has several options you can choose from. So to put it mildly, it can get a bit confusing.
#1 How To Begin
Something that all marketers have been guilty of at some point in their careers is putting a lot out there but not understand what the actual results or outcomes have been. So even just a little bit of planning in the beginning can help push you along the right path. Prioritizing and allocation when done as early and as soon as possible, helps to keep your ship on the right course.
If you are reading this article it is safe to assume that by now, you (alone or along with your leadership team) have discussed and decided on your goals and how much of your budget you are going to allocate to your marketing.
You need to handle this marketing spend with utmost caution and “YOU” need to be fully aware about where each penny is going. Prioritization and effective allocation comes into play here. Prioritization helps you analyze and differentiate between what is performing and what is not.
For example, it is highly anticipated that many companies will continue to focus their marketing budgets on Social Media as its light on the pocket and heavy on the market.
Not all social medias are created equal. You need to look at which ones are not just giving you visitors but which ones are genuinely converting to leads.
A few suggestions to help you prioritize and allocate better
1. Write down a clear and actionable plan outlining how you are going to spend your marketing budget including how much each marketing channel will require.
2. Allocate your budgets not only to popular lead generation campaigns, but also to campaigns that generate actual revenue. Some of the very popular lead generation campaigns do not necessarily translate into actual business.
3. Several times, unexpected or unanticipated expenses can pressure marketers to spend cash in a way that they had not originally planned. So, be wary of hidden costs.
4. Understand which activities really drive pipeline for the business and keep those on top of your priority list. Cancel out any activities that are a ‘nice to have’ and are not proven business drivers.
5. Always keep some room for flexibility and innovation. This can be achieved by embracing a proportionate budget rule. For example, 80% of the budget can be allocated for the current activities and 20% for tweaks and changes. This can also be used for innovation, experimentation or unanticipated opportunities.
When you keep track of the areas in which budget allocation is taking place and also double check the results, it is much simpler to understand and identify areas which require greater spending and need to be prioritized. This will in return help you to keep a tab on the spending for the next two steps.
#2 Monitor your spend
After prioritizing and allocating, you need to build a rigorous tracking approach and then adhere to it, regardless of whether you’re working in a small, medium or large enterprises. In large enterprises, there already are, procurement departments and accounting teams to monitor spending patterns however smaller companies, the marketing department may have to track its own spend via various tools they already possess. Regardless, you need to own the process of spend tracking. You need to define the tracking tools, templates, frequency of check-ins, and so on. But each manager is responsible for coming in on budget.
Also, it is extremely essential to have proper financial management tool that brings together plans, estimations and facts into one record system so that the marketing department can work more easily on budgets. This can be achieved by leveraging the right technology or by using a reliable mechanism to see ROI.
A reliable ROI mechanism should help you in the following ways:
A. Maintain a score card – if you are not keeping scores, it becomes hard to know who’s winning. A scorecard is basically prepared to evaluate how much money goes where and how effective it was.
B. Entering and keeping a track on all estimated costs for all of your marketing channels.
C. Help you in fixing a cost per acquisition amount as a benchmark. You should measure and track all your marketing campaigns against this benchmark. Advertising for instance, in the Yellow pages, end up costing you more going way above your benchmark, stop engaging in those marketing activities and shift your energy towards those that lead you to lower CPA’s
D. Constantly measure how things are working as you go along, not just after every program. Even compare your projected budget to what you actually end up spending.
E. Track your activities and other business generating activities as well. Track web generated leads, email campaigns, social media, partners and alliances and more, are a few examples.
F. Helps you understand how your leads actually progress through the funnel by tracking every lead that comes into the organisation – no matter where it is generated from.
#3 Track and Tweak
By now you will agree with me that it’s critical to continually review, track, measure and tweak the marketing spend throughout the year. You need to identify where your costs are exceeding by monitoring every aspect of your marketing campaign to keep you on track. After all, regardless of how you allocate your budget in terms of digital print, broadcast, social media, PR events. In the end, its money well spent if the marketing objectives have been met and ROI is there.
By keeping tabs on your allocated budget, and cross-checking the spending with the results, it will become much easier to figure out on what should keep getting the budget and what should get kicked to the curb.
Also, It’s very important to collaborate internally, and you can have regular or monthly team meetings with open discussions to analyse the marketing spend and adjust it where necessary. This will help you to see clearly which of your projects need more money or which ones should be in the bin.
Finally after all this comes Brainstorming.Eg: If you’re not getting enough conversions through social media, call in your social media manager/team and brainstorm around new ways to be more effective. The last thing you need is to stretch your marketing budget simply because all your free social media methods failed