Setting your marketing budget: how much should a business spend?
You may want to keep your marketing in-house or you might want to outsource it to a team outside of your organisation. Your marketing budget will determine your options.
Marketing is a key aspect of any business. It’s the whole reason you sell something in the first place! But how much should you be putting towards your marketing budget? And what are some different ways to market your business?
To start us off, let’s talk about the importance of knowing what you want to achieve before you begin.
Know your goals
When you’re setting a marketing budget, it’s important to know what your goals are. The best way to do that is by defining measurable objectives – and this is especially true if your goals aren’t clear. If you’re uncertain about what you want to achieve with your marketing strategy, how will you be able to tell when it’s time to cut back on spending?
It’s also worth considering whether or not your goals are reasonable, and whether they fit within the scope of your business. Are they reasonable because they reflect an expansion in services or product lines? Or are they reasonable because achieving them will be easy for the company as it currently exists?
When it comes down to it, all businesses have different needs and abilities. Your goal may be based on some factors related solely to yourself (e.g. working from home), while other factors might only apply indirectly (e.g. having enough money left over at the end of every month). It’s important that whatever marketing strategy you choose reflects these differences accurately so that everyone involved understands how much work needs doing and how much money is needed for this project going forward.”
Marketing costs are often considered as a product value – how much flyers cost to produce, or the price of hiring a billboard. The often overlooked expense is for people – someone has to design and orchestrate your marketing. The average annual salary for an entry level marketing executive in the UK is £27,500 and a marketing assistant often sits around the £22,000 mark. This is a rough benchmark that will depend on experience, qualification and – of course – location. However, it’s important to remember the bigger picture when it comes to a marketing wage; there will be training, development, employee perks and additional campaign budgets to consider when it comes to taking your marketing department seriously.
If you can’t afford to hire someone full-time, you can either learn to do it yourself (though this may clash with your other daily duties), or look into help from an agency…
Do you need a full-service agency?
If you’re not a marketing professional and don’t have the time or resources to learn how to market your business, you may want to consider hiring a full-service agency. Full-service agencies offer all of the expertise that are required to help grow your business through effective online and offline marketing campaigns. The benefit of working with an agency is that they can take care of all aspects of your marketing needs, including:
- Strategy and planning
- Creative design (graphics, copywriting etc.)
- Social media management/planning
- Campaign implementation
Full-service agencies can also provide quality assurance services during each stage in development so that everything runs smoothly when it comes time for implementation.
Use what you already have
Many business owners don’t realise that their resources for marketing and advertising are already available to them. For example, if you are a local business owner, use the search engine optimisation (SEO) tools that exist to help people find your website when they search for keywords related to what you sell. Don’t spend money on SEO services when you can do it yourself!
In addition, research the types of advertising and marketing that will be most beneficial for your business, and then consider how much time it’s going to take away from your other responsibilities as a small-business owner. If there isn’t enough time in the day or money in the marketing budget, then perhaps it’s best not to pursue these options.
It’s never going to be perfect
Marketing is a process, not a destination. It’s never going to be perfect, but that’s okay! As you learn more about your audience and how they respond to your content, don’t be afraid to change things up if something isn’t working.
Have a plan and stick to it
If you want to be successful, you need a plan. You’re not going to get very far without one. And it’s not just about making your marketing budget work for you. It’s also about setting yourself up for long-term success. A good marketing plan should include goals, tactics and strategies that align with those goals, timelines for achieving them and the resources needed to accomplish them all (including money).
Marketing plans can take many forms: big or small; simple or complex; based on where your business is now or where it wants to go in the future; with charts and graphs or written out in narrative form. But whatever its shape, every marketing plan has two main components: objectives and tactics. An objective is what you want your audience to do as a result of exposure. This could be anything from purchasing your product/service/content/etc, visiting a website page like “contact us”, or sharing something via social media channels like Facebook or Twitter. Tactics are what drive these objectives forward – they include things like social media ads, email newsletters sent by MailChimp, etc.
What kind of marketing do you want to do?
You need to decide what kind of marketing will work best for your company. The options include:
- Social media
- Content marketing
- Paid online advertising (like Google AdWords)
- Email marketing, including newsletters and other direct messages sent to customers
- Branding (logos and slogans)
You could also use some of these strategies together: for example, paid advertising on social media or content creation by an influencer who has a large following. If there are specific ways in which your product or service is superior to others on the market, highlight those strengths in all aspects of your marketing strategy.
What does your ideal marketing campaign look like?
It’s important not just to know what you want out of your campaign, but also how much time and energy are required for its success. Do you have an unlimited budget for marketing activities? Or do you need something that can be done quickly and inexpensively? Also consider whether there’s anything unique about your product or service that makes it less appealing from an advertising standpoint – maybe it has a bad reputation (petrochemicals), or sells at too high of a price point (luxury cars).
Or maybe you’re just starting out in business, and looking for ways to get noticed by potential customers. Adding relevant, thought leadership-focused blogs to your website can help build trustworthiness with potential customers. That way, when they eventually come across one of your products/services, they will remember reading something positive about you before deciding whether or not to purchase!
How do you feel about the cost of marketing?
Marketing can be expensive. But it’s a good investment.
Marketing may seem like an expense that you can’t afford, but it’s actually an investment in your business and its future. Marketing is worth the money you spend on it because the return on investment should be greater than what you pay today.
Here are some ways to keep marketing spend within budget:
- Find free or low-cost options
- Consider local resources
- Reach out to others who have been successful with their marketing plans
- Keep track of how much money each marketing activity makes for your business so you know what offers the best ROI
How much money are you willing to dedicate to your marketing budget?
The answer to this question depends on your marketing budget and how much you want to spend.
If you’ve got a lot of money, then it won’t matter how much the marketing costs because it won’t significantly impact the overall financial picture. You could spend £1m a day on marketing and not even notice it in terms of your profit or loss statement.
But if you’re running a business that’s barely breaking even, spending even £100 per month might be too much for you – especially if that money isn’t going towards something directly related to generating sales leads or increasing revenue.
The bottom line is: know what your goals are before talking about budgets with anyone else (or even yourself).
How much time are you willing to invest in marketing?
You can’t just throw money at marketing and expect it to work. It takes time to build relationships with customers, create content that resonates with their interests, and think of ways to engage them on social media.
Marketing is a long-term strategy because it takes time to build up trust with customers to the point where they’ll buy from you. You also have to spend time engaging them after the sale or service is completed – something most businesses neglect – as this helps to create consumer loyalty.
Marketing is a complicated process
Marketing is as complicated as finding your ideal car or home. You can spend as little or as much as you want, but it might take some research and patience to find what works for you.
If you have an online business, you may have paid for advertising on Facebook and Google, which can be expensive but effective if done right.
But marketing costs don’t end there. There are many other things that need to be considered when it comes to marketing your business: brand positioning, copywriting, email newsletters and more. It can all add up very quickly!
The good news is that there are ways of identifying what’s working through SMART marketing strategies.
The cost of marketing will depend on a number of factors. It can be difficult to pin down an exact monetary value, because it depends on the type of product or service you’re selling and how much money you have to spend on ads. But there are ways to get an idea of what might work for your business before making any major investments in advertising costs.