In a competitive and increasingly crowded market, the role of a marketing budget cannot be overstated. Budgeting should be at the forefront of any marketing strategy, as without a well-defined marketing budget, your business risks either overspending or falling short on resources, undermining your ability to execute essential plans.
I want to share the important factors to consider when planning for the next financial year and how to include all of the various marketing elements from strategy, staff salaries and media spend. Crafting a budget isn’t merely a financial formality but a strategic necessity that aligns resources with business objectives.
The Traditional % Way
A nice way to set your marketing budget is to use a % of your revenue. This seems straightforward enough, but comes unstuck when deciding what to include within that marketing budget figure.
At first glance this method appears intuitive, providing a clear-cut formula for budget determination. However, the challenge lies in the nuanced decisions surrounding what elements should be encompassed within this budgetary figure. Tracking your media spend is relatively transparent when looking purely at media spend vs’ return, but when broader considerations such as strategy, 3rd party specialists and inhouse staff overheads come into play, the simplicity of the percentage-based model may not stand up.
If you’re looking at a more robust budgeting plan, should marketing staff salaries be included or just marketing spend? If you are tracking KPIs then media spend is easier to track than strategy, 3rd parties and staff overheads.
Take for instance, if you’re looking to develop a strong Return On Investment (ROI) from Google Ads (Pay Per Click). You will be able to monitor the expense vs ROI if you’re not including salaries or staff costs. It becomes more complicated when you start to include the wider costs in your budget but gives a clearer picture of the reality of your overheads.
B2C vs B2B Budgets
As well as broadening your horizons to look at staff costs, it is important to recognise the differences between B2C and B2B businesses.
In the realm of B2B marketing, the landscape is characterised by a unique set of challenges and necessities. Unlike the consumer-focused approach of B2C, B2B enterprises often allocate resources to significant expenditures such as exhibitions, trade events and business collateral, each playing a pivotal role in fostering professional relationships and showcasing industry expertise.
In conclusion, as we navigate the intricate terrain of marketing budgeting, it’s clear that a one-size-fits-all approach may not suffice. Beyond the traditional percentage-of-revenue model, understanding the nuances of staff costs and recognising the disparities between B2C and B2B businesses are paramount in crafting a budget that aligns seamlessly with your unique objectives.
If you’ve found in your business that you’ve started doing what you love but you don’t feel you’re up to date with the marketing let’s have a conversation.
Please do not hesitate to contact Tabitha Beasley at The Marketing Associates: Tabitha@themarketingassociates.co.uk or call 01233 720379