How can you know if your marketing actions are effective in generating revenue? By tracking the costs and the return you get. As a first piece of this process, it is important to create a budget that allocates the marketing investments you want to make for your organisation. You may feel that you do not have all the information to prepare it and that it is accurate, but it will still serve as a guide to understanding your business.
If you are responsible for the tangible and measurable results of the actions your company takes to support its growth and improve lead generation, you need to keep track of it. First and foremost, the numbers must speak.
What is a marketing budget?
A marketing budget lists all the money that a company intends to spend on marketing-related actions over a given period of time (usually a quarter or a year).
A marketing budget can include different line items to classify the expenses related to these planned actions. For example, expenses such as online advertising, team hiring, specific marketing software, content creation in post or video format… It all depends on the needs of your business and where you want to allocate part of your resources to meet your business and marketing objectives.
Why is it important to make a marketing budget?
The important thing is to have a reference guide to know how much money you have available for each type of action and marketing strategy. Drawing up a marketing budget is useful in order to:
1. Know what funds to allocate to each type of resource and action.
You will then know how much to spend for each marketing strategy. For example, if your goal is to improve the online positioning of your website and thus get more visitors, you will have to spend more on SEO and content generation.
2. Control the costs of the department.
You can quickly see if certain items require a higher investment than expected and adjust your costs accordingly.
3. Dedicate more resources to the actions that work best.
If you have more clarity on the expenses of each of your marketing items, you can more easily evaluate their return on investment.
4. Have a historical baseline.
You can use your previous budgets as a guide for future years and assess the changes your company needs based on the results you obtain.
5. Set targets.
If you decide to include a new item in your budget, take the opportunity to define what you would like to achieve with it (you can use other items in your budget whose performance you already know as a benchmark).
6. Plan for the long term.
It is very useful to do the exercise of specifying what actions you are going to carry out throughout the year, as it allows you to prioritise your efforts. In addition, by tracking the achievement of this target budget, you can better understand where you are over- or under-investing, and better understand the nature of your business’ marketing.
7. Understand marketing spend as an investment and therefore an opportunity for business growth.
You will learn how to generate more and better opportunities for business development, making the most of everything you invest.