Marketing Budgets and Spending Strategies
Once you’ve decided how much to spend on marketing, digital and otherwise, you’ll need to determine how to spend it. There are a practically infinite number of channels, platforms, and strategies to keep in mind when deciding how to spend a marketing budget, which can be seriously overwhelming. Should you spend on social media ads to drive traffic to the site? Or should you spend on improving the website itself?
Keep in mind: strategy and spending have sort of a chicken-and-egg relationship. Sometimes, budget dictates strategy — if you only have $10,000 to spend on marketing, then a Super Bowl commercial isn’t in the cards for you. On the other side, sometimes strategy can dictate budget — if you need a new business website, you’re going to want to pay top dollar for it, even if that’s a more significant piece of your revenue than you were expecting.
Basing Your Spending on Company Goals
Company goals are as diverse and variable as the companies that set them, but they’ll dictate a lot about where your marketing budget gets spent. Before you allocate any money, take the time to consider what your most important objectives are and how to focus on those goals. Let’s talk about examples.
Increasing sales or profits — if your immediate goal is to increase revenues, maybe to fill a gap in your quarterly goals, your strategy should be to stick to what you know. Find the channels that have proven to have the best ROI in the past and put more money into those.
If you spend $5,000 on Facebook ads and bring in $10,000 in business from those ads, scale up! Spend another $5,000 or $10,000 on those ads. Eventually, you’ll see a point of diminishing returns on your most profitable channels — those returns aren’t infinite — but until you find that ceiling, scaling up your profitable channels is a great way to step up sales.
Building awareness of your brand or expanding your market — building awareness is all about getting your brand in front of as many people as possible, and that means you can’t just market to the people you already know. Sending emails to people who are already on your list won’t grow your audience.
Paid social media posts are an excellent way to get your brand and messaging in front of new people. You can target your audience by location, interests, job title, company, or any other defining quality that you think prospective customers might have. By boosting to an interested audience, you can really broaden your reach.
Launching new products and services — launching a new product is a lot like expanding your market in the previous example, with one key difference: your existing customers are the best place to start. Data has shown time and again that happy customers are more likely to make purchases when it comes to new products, so an email campaign announcing the new product might be your best bet.
Don’t forget about new customers! Your new product isn’t going to have the exact same target market as your existing offerings, so focus on the differences that make the new product unique and seek out prospects that fit those descriptions. Maybe your new product is engineered for bigger companies or different segments — start there.
pie chart showing that the average marketing budget allots 48 percent to advertising
For each of those goals, there will be a different point of emphasis when it comes to your marketing spend. Obviously, you don’t want to put all your eggs in one basket — just because you’re launching a new product doesn’t mean you can neglect your existing customers.
Instead, think of each of your business goals as having a baseline marketing spend that you need to maintain. You’ll always be putting a certain amount of money toward sales, awareness, and customer relations. Your goals will dictate the spikes in that budget — the extra capital that you allocate to particular channels and strategies on a monthly or quarterly goal.
Creating a marketing budget and executing it properly can be difficult, complicated, and confusing. The truth is that every single company is going to have a different marketing budget. Everyone has different customers, different revenues, different goals, different targets, and different priorities.
To throw another wrench in the works, those factors can all change on a quarterly or even monthly basis.
That’s where a marketing agency comes in. When you hire an agency, you usually pay a flat retainer every month for their services, and they handle the nitty-gritty of what that money is used for. A good agency will examine the ROI and engagement of every email it sends, every ad it publishes, and every web page it builds, continually tweaking and adjusting to make sure you are getting the best bang for your buck.