Macy is a Content Writer at WebFX. With a Content Marketing Certification, she's an expert in crafting pieces filled with the facts about all things digital marketing. You'll find many of her pieces featured on UpCity's Top Digital Marketing Articles of the Week. When she isn't clacking her keys, she's wondering why her dog is so cute. Follow her on Twitter @iinfinitestorm. Show
You finally decided to take the leap and invest in digital marketing services. As you sit down at your computer and start researching strategies, you stumble across some prices, and it causes you to pause. You say to yourself, “Wait a minute, can we afford this?” Without a marketing budget plan in place, you have no way of knowing. But luckily, we’ve got all the information you need to know how to plan a marketing budget for 2022! Before you continue scrolling, watch our video featuring Dan from the WebFX Strategy team to get some expert advice on how to allocate your marketing spend for the next year. Now that you’ve (hopefully) watched our video, keep reading to learn more! P.S. Explore more info about managing your marketing budget by claiming your copy of our free budgeting guide! What is a marketing budget?A marketing budget documents how much your business plans to spend on marketing over a specific period, like a year, quarter, or month. When budgeting for marketing, consider all costs associated with marketing your business, such as paid ads, hiring costs, marketing tools, website maintenance expenses, and more. Why do I need a marketing budget for my business?Wondering why you need a marketing budget for your business in 2022? Here are five of the top reasons. 1. It helps you stay on track financiallyIf you’re diving into developing a marketing strategy, you need a budget to help you stay on track financially. When you create a marketing budget, you’ll be able to keep track of how much you spend on each strategy, if you’re overspending, and if you can spend more. If you skip creating a marketing budget, you’ll likely find yourself overspending, which can cause your business to fail. 2. It helps you allocate funds into the right placesA marketing budget plan will help you put your marketing funds in the right place. When you know how much you can spend, you know how much you can put into each marketing strategy of interest. It allows you to determine which strategies work with your budget or if a digital marketing company’s packages fit within your budget. 3. It helps you set benchmarks and goalsHaving a well-defined budget helps you set realistic benchmarks and goals that move your business forward. Based on your budget, you can set realistic expectations for various marketing channels and better understand the revenue you need to earn to make your marketing efforts worthwhile. 4. It helps you plan long-termPlanning your 2022 marketing budget ahead of time gives you more certainty and allows you to create a longer-term plan for your marketing. This long-term perspective prevents you from having to figure out how to get more marketing budget or fight for additional spend throughout the year and stop campaigns due to funding changes. While you want to build some flexibility into your budget, a long-term funding plan enables you to create a more consistent and effective marketing strategy. 5. It’s an investment in your business’s growthWhen you think about investing in marketing methods, you may see marketing as just another cost for your business. It’s important to note that marketing isn’t a cost — it’s an investment. Marketing is an investment in your business’s growth and development. By learning how to make a marketing budget, you’ll help your business get the most out of your investment. WebFX is a partner businesses trust.Hear from HydroWorx, who saw a 236% increase in organic sessions with WebFX services. Watch the Video TestimonialHow to plan a marketing budget for 2022 in 6 stepsNow that you know why a marketing budget is essential, it’s time to look at how to prepare a marketing budget and prioritize it. Check out these six critical points you’ll want to establish to set up your marketing budget. 1. Establish your sales cycleWhen you create your marketing budget breakdown, you want to establish your sales funnel. Your sales funnel is a critical component of your marketing budget because it determines where you’re going to spend your money. Your sales funnel is the process your audience goes through to become a paying customer. A typical sales funnel will have four stages:
Understanding your business’s sales funnel helps you see where you may need a digital marketing strategy to help you keep more people from falling out of the funnel. For example, let’s say you notice that your business’s funnel has a ton of people at the consideration stage, but very few make it to the decision stage. While some drop-off is natural, you notice that the decline is more significant than what you’d expect. As a result, you may find that you need to budget more money for strategies that will help get leads from the consideration stage to the decision stage. Strategies like video marketing, pay-per-click (PPC) ads, and social media ads may help you push those leads down the funnel. So, to help you understand how much you need to budget for marketing, you need to understand your sales cycle. Knowing your sales cycle will help you anticipate strategies you need to invest in, which will help you budget for your marketing plan wisely. 2. Know your outside costsIf you want to know how to prepare a marketing budget, start by establishing your external costs. You need to know how much everything costs your company, so you know how much you can allocate for marketing. So, what are outside costs you need to consider?
You must consider these costs when creating your marketing budget plan. Not only does it determine what services you can invest in, but it also helps you set a baseline for your return on investment (ROI). So, for example, let’s say it costs your business $10 to produce your product. You sell your product for $50. So, when you’re choosing marketing methods for your business, you have an idea of how much you want to spend so you can still make a profit off your item. This information will help guide you to strategies that allow you to get the best ROI for your business. 3. Determine your business’s goalsEvery guide on how to create a marketing budget will say that you must establish your business’s goals — and it’s true! You need to know what you want to achieve, so you can set a budget that allows you to achieve those goals. You can set goals that focus on:
When you set your business’s goals, make sure they’re specific and smart. You don’t want to set a goal like “increase sales.” It won’t give you a precise target to work towards and achieve. Instead, set a goal like “Increase sales by 20% by the end of the year” This goal is easily measurable and gives your team something precise to achieve. It’ll also give you a concrete reference point when budgeting for marketing because you know how much you want to increase sales by and the timeline for achieving that increase versus just knowing that you want to increase sales. If you want to know how to prepare a marketing budget properly, start by adding your overall business goals so you can invest in the right marketing methods to help you reach your goals. 4. Understand your marketYou need to know where you fit in your market to build an effective marketing budget plan. When you understand how you stack up against your competition, you can better establish which strategies you need to use to compete with them. You’ll want to do a competitor analysis to see how your competition performs online. You can even use competitor analysis tools to help you see where your competition currently succeeds online. It can help you determine which strategies you’ll need to budget to drive success. You can use a competitor analysis tool like CompetitorSpyFX to analyze competitor campaigns and get ideas for your own campaigns or use social media monitoring tools to keep track of what people say about competitors on social. 5. Get an idea of what strategies you want to useAn essential component of preparing a 2022 marketing budget is choosing your strategies. You don’t need to be 100% sure about the strategies you want to use, but you should have an idea of which strategies seem to be the best fit for your business. There are numerous digital marketing strategies you can use, including:
You’ll want to have an idea of which strategies you want to use for your business when creating a marketing budget. When you know which strategies you want to invest in, you can determine how they will fit into your marketing budget plan. That brings us to our next critical component of how to plan a marketing budget. 6. Research strategy pricesWhether you’re going to run your campaigns on your own, hire a freelancer, or hire a digital marketing company, you need to know how much it costs. Your marketing budget breakdown should focus on how much each strategy will cost your business. First, you must determine who you want to handle your campaign:
Typically, if you’re busy running your business, you’ll want to rely on a digital marketing company. It allows you to reap the benefits of having a marketing plan and someone to manage your budget, while you worry about other aspects of your business. How much do professional digital marketing services cost? To help you get an idea, here’s a range for how much you should expect to pay for online marketing strategies from a digital marketing company:
These prices will vary depending upon your business and what you need. But this range is about how much you can expect to pay if you partner with a digital marketing company. By knowing these costs, you’ll know how to prepare a marketing budget better, so you can use the strategies that will drive the best results for your business. Try our marketing budget calculatorWant some help deciding how much of your budget to allocate to each channel? Try our free online marketing budget calculator. Simply input some information about your goals, and you’ll get a free marketing budget plan breakdown. You can also adjust your goals as many times as you’d like. To speak with a strategist about your marketing budget, call us at 888-601-5359 or request a free quote online. How to determine your overall marketing budgetIf you’re wondering how to determine the size of your overall marketing budget, this data-backed breakdown for creating a marketing budget will help. You can learn how much your business should budget for its marketing plan by looking at your industry and its average marketing spend in the table below. IndustryMarketing Budget (% of Company Revenue)Communications media10%Mining and construction3%Service consulting21%Consumer packaged goods9%Consumer services6%Education3%Energy1%Banking, Finance, Insurance, and Real Estate8%Healthcare18%Manufacturing13%Retail wholesale14%Technology21%Transportation6%Besides industry, your business can also look at its age and overall market. For instance:
Remember, though, that every company is unique. Considering your business’s goals when creating your budget is crucial. Depending on your organization’s goals and overall business strategy, you may opt to create a marketing plan budget that is higher or lower than your industry’s average. To create a goals-driven marketing budget, determine your target cost for acquiring a new customer and how many new customers you want to gain through your marketing. Then, multiply those two numbers and add in any fixed costs. For example, say your target cost-per-acquisition is $300 per customer, you want to acquire 200 new customers, and your fixed costs add up to $10,000. In that scenario, you’d use the following formula.
So, you’d need to allocate a total of $70,000 to marketing to achieve your customer acquisition goal. As you run your marketing campaigns, you can track the number of new customers you acquired and your cost per acquisition to determine how well your campaigns are working and what you might want to tweak to improve performance. Our digital marketing campaigns impact the metrics that improve your bottom line.See More ResultsWebFX has driven the following results for clients: $3 billion In client revenue7.8 million Leads for our clients5.2 million Client phone callsStart preparing your 2022 marketing budget plan todayIf you’re ready to dive into creating your marketing budget plan and hire a marketing agency, WebFX is here to help. With 25+ years of experience, we know how to prepare a marketing budget that works for your business’s unique needs. As a business marketing firm, we’ll help you choose strategies that work with your budget and drive results for your business. Contact us online or call us today at 888-601-5359 to learn more! Table of Contents
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How is your website’s SEO?Use our free tool to get your score calculated in under 60 seconds. Get Your SEO ScoreWebFX CareersJoin our mission to provide industry-leading digital marketing services to businesses around the globe - all while building your personal knowledge and growing as an individual. How much should I budget for ad campaign?There is also a general rule of thumb that you should aim at spending between 2-5% of your sales revenue on marketing. If your revenue were $1 million per year, your advertising and marketing budget should be $50,000 annually based on the 5% of sales revenue rule.
What are the 5 steps to set an advertising budget?How to allocate your marketing budget. Set marketing goals. Setting your marketing goals is a crucial part of creating a marketing budget plan. ... . Create a plan for the year. ... . Calculate expected costs and return on investment (ROI) ... . Allocate your spending. ... . Track your campaigns and refine your strategy.. |