Best practices for effective marketing budget management
Marketing is an essential process for any business’s growth. However, in order to see successful results from your marketing strategy, you need to spend money on the right things and in the right form. Strategic allocation of a startup marketing budget is essential and has to be done with extreme care and up-to-date data.
Although, before you take a leap into marketing budget planning, it is always a good practice to know the total spend amount, the company’s goals, and how much more can be spent. General statics show that businesses usually spend approximately 7-10% of their revenue on marketing expenses. On the other hand, if your company is new and aims to grow quickly, you might spend 20% of your total revenue setting and implementing a startup company marketing budget.
Again this is just a general range idea, you may spend more or less, according to your company’s needs. One golden rule you must follow while creating a marketing budget for a startup is not to spend the money you can't risk losing. This rule must be followed because most of the time, overspending becomes a big issue.
What is a marketing budget?
A marketing budget is a statistical document that determines your business’s capacity and plans to spend on marketing expenses over a period of time, like a monthly marketing budget.
The calculation of marketing expenses or marketing costs for startups includes costs for hiring, paid ads, website maintenance expenses, marketing tools, and more. A marketing budget usually comprises all costs related to advertising, public relations, and promotions.
Different businesses have different budgets because of the variation in size, annual sales, competition, etc. Based on the industry type, a marketing budget can range from 1% to 30% of the total revenue. A new startup may end up spending 50% of sales to establish themselves in the market during the first or second year. On the other hand, a small business might just spend equal to their competitors.
Marketing budget list
- Advertising both print and broadcast
- Design cost for materials like brochures, press releases.
- Public relations
- Website development
- Special publicity events
How to determine marketing budget for your business?
Strategy
The next step after deciding upon the marketing channels, you should begin outlining your business’s marketing strategy. Take into consideration the company’s overall goals and then go down more deeply into the tiny details.
Apart from deciding whether the marketing will be done in-house, an agency would be contracted, or freelancers will be used, one of the major parts of a marketing strategy is identifying the target audience. You may already have a target audience in your original business statistics, but it is advised to look at the audience from a marketing perspective and then plan a strategy.
Finalize the channel of marketing
Preparing a startup marketing budget isn’t so simple. Once you set your goals straight, the next step is to make decisions related to the distribution in marketing channels. The easiest and fastest way to lose all the marketing budget funds is by throwing money across all channels of marketing.
To make the best use of your marketing funds, choose a few channels which will work best for your company type, i.e., those which will help your business achieve all its targets efficiently and in the expected timeframe like SEO, PPC, Local SEO, SMM, Email Marketing. You can run some analytics and evaluate which channels have been working successfully till now, and then you can continue with those or go with some similar distribution model.
Establish your goal
It’s easy to be excited about the future and just jump into the marketing budget creation process; however, before you take any step to create a successful marketing budget, the first and foremost requirement is Marketing goals. Then set a strategy to achieve those goals. This will help a great in determining the amount needed to do the same and how much do the business shareholders are expecting? One extremely useful technique for deciding on the marketing plan duration is setting SMART goals.
S- Specific
M- Measurable
A- Achievable
R- Relevant
T- Time-based
Manage your marketing budget with virtual cards
How to effectively manage your marketing budget?
Have a clear idea about how much you can afford for marketing
To set aside some money, you need to know how much can the company spare from its revenue for the marketing budget. To hit your targets precisely, you have to decide how much money to spend on which marketing channels, platforms, and campaigns. However, these are not the only things where you will have to spend money to reach till these other elements are also needed like employees, training, software, consultants, etc.; considering these costs will help you be more accurate in the budget estimation.
Conducting some analytic procedures will be a great assistance in drafting a marketing strategy. So. the first thing to do here is to gather data on every marketing campaign or channel and the efforts and performance of the same. Even though you might know all this, it is always best to document all the information in the form of progress sheets or charts.
Tracking the performance of every campaign and every platform will bring the stats of their performance and tell you which strategies are working best for your business, and further in the future, calculate the ROI on the various marketing tools you are using. Non-marketing data like customer demographics and sales statistics also play an important role in forming a marketing strategy.
Organize your list
A marketing plan and budget are like the two sides of a coin. To successfully achieve all your business goals, a marketing plan is a tool that will help you to get there. Your marketing plan must be based on intensively evaluated data, and the plan must outline the expenses allocation and the total marketing budget for a startup. Your plan must also have all the channels and items which will be employed for marketing the business and how these elements are expected to perform.
Eliminate or downgrade the tools if not in use
Once your campaigns are on air, cautiously track the KPIs and measure the success of each campaign. Then use these findings to take another look at your marketing budget. If a campaign is performing amazingly, you may want to put in some extra funds. However, if there is information that some campaigns aren’t performing as expected, you might consider the option of drawing back some money from there. Although, one thing you need to be careful about is not to pull funding from any platform at a premature stage. Along with this, keep adjusting your expenses and combine the ROI data of the marketing channels and use it to plan the next year.
Marketing subscriptions
Out of all the outgoing marketing expenses, marketing subscriptions is a tool that dominates this area, of course, along with a few other factors. A large one in the field is marketing automation - the relief squad for numerous marketers. The possibility of having a record of every lead, every prospect, every website page visitor to analyze and evaluate the business's performance.
There are some fantastically useful tools in this field, like HubSpot and Marketo. Although, it is a basic understanding that if you keep using tools like these, you will keep paying. Furthermore, it is not just the all-in-one marketing tools you are paying for; your team must be using many other individual tools for assistance like:
- Social media management tools
- Video hosting platforms
- SEO and content optimizing tools
- Dropbox subscription
- Ad platforms
- Email marketing tools
And the list goes on and on. It is a great idea if you optimize all your subscriptions and use only those which are extremely necessary. Drop all the non-required and unnecessary tools. This will help save a lot of money. You’ll be actually surprised.
Related page: Recurring billing issues and how to overcome these issues?
Employee salary
There is no marketing without marketers. Initially, it may only be one or two people or maybe just the CEO. But eventually, the team will grow, however to what size will be your company’s call. Though salaries are a part of marketing expenses, you need to think ahead of the people from your company. You will be paying for advertising agencies or freelancers, social media managers, PR sources, etc. It is an awesome idea to outsource these tasks. However, you must have a proper payment method in place.
Marketing campaign costs
Saas payments are not the only expense category markets look at often. Specific campaign costs may pop out anytime—for example, a new social media or advertisement launch. You might want to set a monthly marketing budget for emergency times.
In terms of physical marketing collaterals, there may be a conference you are attending and building a network; you will probably need business cards and pamphlets. These payments are not recurring like marketing tools subscriptions; they are sometimes occurrences that can be easily handled with a corporate card or virtual company card. A startup has numerous marketing options open before it; how to spend and allocate money between those channels is the actual task.
How can Volopay help manage marketing budget of your business?
Need help with marketing? We got you. Volopay is an all-in-one spend management platform which is designed to make your business process easier with faster and less expensive automation. We provide virtual cards and corporate cards which can be of great use for subscription management for your business, from LinkedIn ads to Google Ads, HubSpot, and so many more tools; with Voloopay cards, you can optimize your subscriptions quickly.
Along with this automation of all other marketing processes, budgeting, employee salary and reimbursements, accounting, and accounting analytics, we can do it all. You can also manage your funds in different currencies, i.e., you can keep your funds in 100+ countries and make transactions incurring the cheapest FX cost.
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