08 Apr 2021 | 0
Whether you’re looking at launching a new product or service, or simply trying to boost the sales of an existing one, marketing plays an essential role. It ensures brand visibility to your target audience. So, it is natural to plan your marketing strategies and allocate a set of funds for this purpose.
Now, the question is: How to plan your marketing budget? Before we get into the nitty-gritties of planning, let’s focus on what are the expenses included in a marketing budget.
Factors that influence marketing budgets:
- Print or digital: You could want to give a loud shout out to your product on the highway billboard or simply use a social media ad to connect with your customers. Consider your options and their impact on your target audience. Each medium has its own set of costs which you’ll have to research.
- Software: Focus on what software is needed to create your advertisement. It could be done on Adobe Photoshop or simply using a free tool. But it is necessary to cover all bases while computing costs.
- Personnel: Many ignore the cost of hiring marketing personnel whether a copywriter, designer, freelancer or agency in creating an effective marketing campaign. But, this also influences the budget allocation for your marketing needs.
- Content creation: If you’re hiring an agency to delegate all work, then you could combine this expense line with the personnel, but if you’re making an advertisement campaign in-house, you’ll need to consider external costs of printing, props for a video shoot, and other expenses in content creation.
Now that you have your base ready, you can focus on the best methods in planning your marketing budget.
1. Affordability method
For any company, including startups, the question in marketing campaigns is: Can we afford it? So, pull up your spreadsheets and see what is the budget you can set aside for marketing campaigns. Having meetings with your finance team to ascertain this is handy. Most companies in their initial years work hard to break even. At this stage, sanctioning marketing budgets are solely dependent on very effective campaign strategies. For new, finding free advertisements or free brand promotions in the form of small business listings can cut down their costs considerably. The focus mainly lies in getting brand visibility among the masses.
2. Competitive-analysis method
Another effective method is to shadow your competitor’s marketing strategy and finalize what’s good for your business. Many companies closely monitor their opponents to either best them or counter offers that ensure they’re on par with the marketing trends. This weighs true even in considering marketing budgets. See what channels your competitor uses and the effective methods in which they spend their budgets. When you’re in the same field, this is a good way to plan your marketing expenses. But take note that every company has a different target audience and you’ll definitely want to stand out in the market. Exploring channels that your competitor hasn’t looked into can give your business an edge. When you are just starting out, pursuing competitors’ strategies is a good place to start.
3. Insights method
The most effective method while allotting marketing budgets is by focusing on historical data. See the productive channels through which your business has gotten leads and sales. Focus on the platforms through which the rate of return is higher than the expenses. Understanding this will help you to not only assign funds but break those funds into smaller investments like a portfolio. As this is based on valid data, this is the best method to budget for your marketing needs.
There are other methods like calculating marketing budgets based on sales or profit margins. The ideal methods need to be combined with the best marketing strategies, plan and efforts for best results.