Setting Your Marketing Budget To Get Results
Setting your marketing budget can be challenging and you don’t want to play with your business money like it is Monopoly money. It is important to set up a budget with key objectives so that you can prioritize and measure your success. Where do you start?
- Start with your marketing strategy - what is your plan of action to attain your company vision and mission
- Set your marketing budget
- Prioritize your marketing tactics
Be realistic with the tactics and resources you are allocating - people and dollars. What categories of marketing tactics are most important to connect with your target audience? I have included a downloadable excel spreadsheet (Brand Guide_Brandamentals Academy_ Marketing Budget Template.xlsx) that I have bucketed the different categories you should consider for your business. When determining your priorities look at this as an evolving process, not a one-time exercise. Your marketing strategy should be focused but it is also a test and learn model. You should always be learning and adapting to what is and is not working.
The marketing and sales team should work together to determine priorities and allocations for the budget. The marketing budget has two compartments 1. the end consumer and 2. the retailer. Working together with sales instead of in silos will allow you to build a budget that will allow you to sell your products into retail and pull your products off the shelf with point-of-sale and retailer-focused tactics. The key is to understand the delineation of what is budgeted to marketing and what belongs to sales.
I have included 15 categories for marketing spend. Each one can be customized to your specific marketing tactics and highlights a few ideas where you can direct your dollars.
- Social Media
- Public Relations
- Ecommerce and Email Marketing
- Advertising
- Promotional Marketing Materials
- Packaging and Displays
- Trade Shows
- Community Events (not demos)
- Certifications
- Samples
- E-Tailer Vendor Spends
- Retailer Vendor Spends
- Coupon Programs
- Marketing Shipping
- Marketing Travel & Expense
A common rule of thumb is that B2B companies should allocate 2-5% of revenue on marketing, while B2C companies should spend between 5-10%. In the downloadable Brand Guide Marketing Budget Template I have provided percentage values for the top nine categories. The percentage is only a starting point for the template and will be based on your type of business and your target audience and ultimately your actual budget dollars. Make this template your own - but I hope this gets you started.
Social Media
This category relates to all your social media platforms and campaigns. It is the development cost, any promotions, or giveaways. It is not paid advertising for these campaigns as those dollars live in the advertising category. If you used a social media agency or freelancer to help with development and monitoring you would put that spend here. I recommend quarterly “Power Promotions'' where you can conduct featured campaigns that last 2-3 weeks and really engage your audience.
Public Relations
This category includes your interactions with the media and influencers to gain increased awareness through third-party credibility. Consider thought leadership speaking opportunities, working with a PR agency that has developed relationships with industry or business media. The partnerships you develop with influencers should live in this category.
Ecommerce and Email Marketing
This is a crucial bucket to connect digitally with your consumers through your website and to create loyalty and advocacy with your fans. Consider the development and maintenance of your website and your email marketing interactions and promotions. Promotional codes related to sales or a gift with purchase and the payments to keep your site live along with any apps that help your fans navigate around or provide an awesome testimonial after making a purchase.
Advertising
Truly a bucket that is a big spender, especially in today’s world of increased digital purchases. Your digital advertising spend like Facebook and Google Ads along with any physical print dollars with the local retailer.
Promotional Marketing Materials
You definitely need a bucket to spend toward your printed materials for sales and direct mail components like a catalog or flyer. I like to include photography of products and images for the website and printed materials in this category. The fun part of this category is also the SWAG (stuff we all get) like wearables for ambassadors and fans.
Packaging and Displays
The development of packaging and displays is contained in this budget category to include the collaboration of the design with a creative agency or freelance graphic designer. The actual print and production of the packaging or display is typically in your cost of goods sold. The IRS categorizes packages that are an integral part of the product as a part of your COGS.
Trade Shows
You know them, we used to hate them but today it might be nice to socialize and talk to some friends at the annual industry trade show. But today in a “pandemic time”, physical shows are not happening, but there are virtual shows you can still take part in. So depending on where we are in the world or when we determine virtual vs in-person events this marketing bucket will house your industry show participation.
Community Events (not demos)
If your company really connects well with your consumer at events - virtual or in-person - this category will fluctuate your spending. Consider any event you might collaborate with for sampling or for thought leadership. I do not include retail demos in this bucket. Demos typically fall into the sales category OR I would create a separate bucket to demos.
Certifications
Certifications can provide third-party reasons to believe. Consumers are more vigilant about understanding what’s in their food or how products are manufactured and the impact on the environment, animals, and people. As a result, third-party certifications surrounding food production, ingredient sourcing, or manufacturing process are growing and changing the game. Certifications can be a valuable tool to provide increased transparency to business practices and standards
Samples
Be sure to allocate a cost to the samples the marketing team uses for event displays, influencers, PR, give-aways, social media and marketing campaigns.
Marketing Shipping
A friend of the samples category so that you capture the dollars for shipping any products out to influencers, media, or consumers.
Coupon Programs
If your product sells well with coupons, maybe as a grocery item be sure to capture the printing of the coupons along with redemption.
Marketing Travel & Expense
Another bucket that maybe does not have much dollars associated with it today in a pandemic time of little to no travel. But this is an important category to track as the nation comes back to life and we start moving around again.
E-Tailer Vendor Spends and Retailer Vendor Spends
Last I did include two line items for e-tailer and brick and mortar retail vendor spend. This can sometimes live in the sales budget, but in my experience I have also had it live in the marketing budget. The key here is knowing what and how you will spend directly with your e-tailer or brick and mortar retailer partners. Do you sell on Amazon and prioritize dollars toward Amazon marketing services or work directly with a regional grocery chain to conduct a loyalty program. No matter where this line item lives, marketing or sales, the programs you develop with retailers are important to your business and can show your commitment to building brand awareness.
I hope these categories and descriptions along with the actual spreadsheet template are helpful to you and setting your company marketing budget. The key is to prioritize and preplan the spend. Sure you should be ready to adapt, improvise and adjust as you test and learn but having a starting point is crucial to your success. Good luck on your budgeting journey.
Get Started
- Start with your marketing strategy - what is your plan of action to attain your company vision and mission
- Set your marketing budget
- Prioritize your marketing tactics
Have questions or need help setting your marketing budget? Lets Talk.
About Brand Guide™
Brand Guide supports consumer packaged goods companies in the start-up and growth-stage struggling with inconsistent brand messaging and the execution of that messaging and would like to find a clear path to spark a change in their communication strategy. Brand Guide enables teams with smart branding and marketing insights that take into account the company’s stage of business. We understand team passion and bring the energy and drive to deliver a plan of action for brand development, marketing communications, and engaging storytelling. For more information, visit www.kristinecareybrandguide.com
About Brandamentals Academy™
Brandamentals Academy is an eLearning marketing communications curriculum for startup and emerging brands that are purpose-driven with better-for-you products and services. A new course “How to position your brand for success with consistent messaging” is launching in January 2021. If you are interested in more information email Kristine@kristinecareybrandguide.com or visit https://www.kristinecareybrandguide.com/brandamentals-academy