Whether you are running a large or small business, establishing a marketing budget can be tricky. If you have a larger company, having multiple marketing operations or teams can make it difficult to ensure everyone gets what they need. If you have a small business, you may have a hard time figuring out which expense you should start with.
To make it easier for you to manage your marketing expenses, consider this focal point—digital media. This year, for the first time ever, digital media will account for more than half of both U.S. and global ad spending.
Considering that initiatives that cater to consumers on mobile devices, social media, desktop computers, video streaming platforms, and search engines deliver the best results, allocating half of your marketing budget to digital channels may be a good idea.
When planning your marketing spends, be sure to keep the following items in mind:
The steps a member of your target audience takes from being a prospect to becoming a paying customer are known as the buyer’s journey. To get a better picture of how your audience interacts with your marketing, first you need to understand your buyer’s journey.
It will also help you budget to better reach your target audience and find out where to set your goals. As you define your buyer’s journey, ask yourself these questions:
The answers to these questions can help you determine where you can focus your marketing budget, what marketing goals you need to change, and point out which marketing tactics are working (and which are not).
By making an effort to understand your buyer’s journey, you’ll be able to advance your sales cycle. To cut costs and get a more complete approach to the sale, you should incorporate your buyer’s journey into your sales funnel.
According to McKinsey, businesses are able to allocate marketing and sales resources more successfully if they are ready to meet customers at different points of their journey.
Moreover, you can lower your marketing expenses by using an all-in-one marketing platform such as Kartra to create an effective sales funnel and marketing funnel. As long as you find a platform with extensive features, it can replace many different marketing tools and eliminate the need for hiring more freelancers.
Make sure you are only spending money on your current marketing goals, and the things required to achieve them. What you’re trying to accomplish will determine what you spend and where you spend it. These expenses could include:
Most marketers calculate the money they spend on paid efforts based on volume of impressions or clicks. So, you may want to spend more on campaigns with higher-volume audiences and offers.
For instance, a Facebook ad or a tweet that promotes a lead generation offer and falls more towards the top of the funnel will probably get more clicks than something that leads more to the bottom of the funnel.
In many countries, “advertising expenses” are tax deductible. For instance, if you are self-employed in Ireland, you can deduct advertising expenses on your tax returns as long as the costs are related to advertising in directory listings, the media, direct mailers, or online channels (emails, sites, etc.)
According to the American IRS, you can deduct marketing expenses that are directly related to your business activities. This leaves quite a broad scope of deductible marketing expenses. Possible tax deductions include:
If you’re doing your own accounting, or if you are just starting out as an entrepreneur, you may have a hard time drawing a line between deductible and non-deductible cost.
Since tax deductibles can help you better budget for your marketing, hiring an accountant may be a cost-effective solution.
To avoid those unpleasant end-of-the-year or end-of-the-quarter surprises, make sure to maintain a budget spreadsheet. Unanticipated costs can force you to spend money outside your budget.
This especially goes for product marketing. You need more than promotion if you want to successfully market your products and services. Business owners tend to think in terms of promotional activities and product launches when they are allocating a budget for product marketing.
While these are a vital part of product marketing, it is also important to set aside some money for research and message testing before the launch. To have a successful launch and shape the right message, you need to have conversations with your customers about the pain points your service or product is addressing.
You'll want to know if your budgeting hurt you or helped you when you invest money in a certain area of marketing. Because of this, measuring ROI is essential.
If the money you spend on one item didn’t deliver a good ROI, you should examine your budget. If it helped you make more in return, consider increasing the budget for that item in the next year.