How Much Should Your Business Budget for Marketing?

How Much Should Your Business Budget for Marketing?

Marketing spending saw a significant slow down in 2020, with the impact of COVID forcing many business owners and CMOs to take an ultra-cautious approach to their marketing budget. 

However, it looks like that is now shifting. eMarketer is predicting a staggering 17% growth in ad spending in 2021.

You might be wondering if your company should follow this trend and invest in marketing in the next 12 months. Is now the time to put everything on red, or should you hold back while the economy is still so uncertain? 

Use this guide to help you decide what your budget for marketing should be in 2021. We’ll outline some of the critical factors you should consider when putting together your marketing budget. 

Create Strategic Goals

Before embarking on marketing projects, your company must begin with a clear goal about what you intend to achieve with your marketing. 

These goals will form the foundation of your success criteria. They won’t just tell you whether or not you spent your entire marketing budget, but whether your marketing expenditure was a success for your business. 

These marketing goals should align with your broader business goals. If you have a new product launch this year, for example, then you need to look at some marketing targets for making that a successful launch. 

It’s More Than A Number

When it comes to marketing budget tips, it is easy to recommend a business allocate a specific percentage of its overall budget. In reality, the answer is more complicated than that. 

First, you need to look at the different marketing strategies that are available to your business. These might include:

  • Search engine marketing
  • Public relations
  • PPC advertising campaign
  • Market research campaigns
  • Video advertising
  • Television advertising
  • Traditional print advertising

Second, focus on calculating the potential return on investment (ROI) that you could target with each of these strategies. That figure is the best number to shape what your marketing budget should be. 

Once you know which marketing strategies will give you the best return on your money, allocate your budget accordingly. 

In-House vs. Outsourced

The other big question you need to ask when deciding how to set a marketing budget is whether you’ll be doing the marketing campaigns in-house.

For projects that require the most specialist industry expertise (SEO is a good example), it is worth taking the time to get some quotes from external agencies.

Even if you eventually decide to do the work in-house, getting quotes for your planned marketing campaigns will help you shape your marketing budget. 

Getting The Right Budget For Marketing

When the economy shifts into a growth phase, it is tempting to put as much money as you can into marketing and advertising for your business and catching the wave of that growth.

However, but doing some upfront planning and looking at which marketing strategies are the most effective for your business, your budget for marketing can go a lot further. 

Ready to learn more? This guide on how to brand your business will talk you through the importance of branding as part of your marketing campaigns. 

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