But how much will it cost? The A to Z of marketing budget
A well-planned marketing budget is tailored to your brand – made to measure. So, there’s no one-size-fits-all formula for how to put together an optimal spending plan for marketing activities. You certainly won’t find that in this article. What’s more, even putting together a very good budget plan is only one small element of success. Without monitoring, measuring the effectiveness of the actions, and optimisation, even the best plan can go awry.
It’s worth the effort though. Looking at the bigger picture, what allows your brand to survive and thrive is a well-planned marketing strategy, the implementation of which requires the right budget. The right one, meaning what? Well, the answer is not so simple.
How much should you be spending on marketing?
Marketing activities consume an average of 5 to 12% of a company’s revenue. In some industries, such as FMCG and retail sales, the declared percentage of advertising spend is much higher.
So, how big should your marketing budget be? The answer is – it depends.
Aside from the industry, there are many factors influencing budget size.
These include, among others:
- the company’s financial capabilities (obvious, but worth emphasising),
- the size of the competition and its advertising activities,
- the target audience for the campaigns,
- the maturity of the brand – how long has it been on the market, or has it only just made its debut? The younger the brand, the more marketing spend you usually need,
- the company’s goals and vision for growth and development, both in terms of specific values and ambitious KPIs, and in terms of strategy (e.g. rebranding, new product distribution channel, etc.).
It’s also important to conduct a brand needs analysis and work out the appropriate actions based on the results of this analysis. In this regard, it’s worth trusting an experienced partner – an advertising agency or a creative agency.
What’s does a standard marketing budget include?
Marketing spend is mainly forecast on the basis of a strategy, containing an action plan broken down into specific time periods – usually year to year. The way the budget is distributed and the individual activities will differ depending on what goals are included in the strategy and what it’s supposed to achieve – whether you want to increase brand awareness, boost traffic on the website, launch a new product, etc.
Among the most commonly seen elements of a marketing strategy are:
- Branding and elements related to the creation and management of brand identity
This is usually a one-time cost, requiring additional spending every few years.
- Creating and maintaining the website
The implementation of the website itself, just like branding, requires spending every few years. Maintenance and administration of the website is crucial and should be included in your fixed costs.
- Advertising campaigns, split into production and display of ads within the channels
It is also worth distinguishing between traditional advertising and online advertising. Digital campaigns have their own rules, but they allow much better monitoring of results and costs. Research shows that brands are increasingly turning towards digital in line with the growing share of mobile devices. In the first quarter of 2020, online advertising spend increased by 4.2%.
I.e. the costs associated with website positioning.
- Content creation
Including blogs, email marketing or creating other unique content.
- Social media
I.e. spending related to running and administration of social media channels.
- Other activities
E.g. the costs of events, creating BTL materials, public relations, etc.
By yourself or with a partner?
As we’ve already mentioned, planning and budgeting for marketing projects should start with a comprehensive, well-prepared marketing strategy, developed with the support of an experienced partner. Clearly defined goals allow you to choose the right tools, and to allocate the resources needed to achieve them.
When working on a marketing strategy, we usually plan and distribute activities across various channels. Comprehensive and integrated actions across these channels allow us to harness and make use of the synergy effect, i.e. achieve better results than we would in the case of each separate, independent action. How do we achieve the aforementioned synergy effect? It is accepted that the chances of a message sticking in the viewer’s memory increase after they have viewed it 6 times. In order to reach the viewer with a specific message, they must encounter it repeatedly.
Users consume content differently, choosing certain channels and ignoring others. Knowledge of the tools, consumers and their behaviour allows for efficient allocation of funds to specific marketing projects, ensuring that we will be investing in something that increases the chances of achieving the goals set. Therefore, the support of an experienced team of specialists is invaluable if you want your marketing spend to be well-invested. Gaps in human resources don’t pose a problem here; you can use the services of an external advertising or creative agency with great success (for example we’re recommending ourselves! Be sure to take a look at our projects and realizations – we will be happy to work on something great for your brand!).
When starting cooperation with an external agency, it’s worth being honest. Knowing the scope of your company’s budget means that the agency can do a much better job of selecting the appropriate actions. Information about the goals you want to achieve is also crucial. As an experienced partner, the agency will verify whether they are achievable within the specified budget and time. This cooperation is sure to help you not only plan your marketing budget better and use it more effectively, but also track and monitor results, and keep your finger on the pulse.