Creating a balanced marketing budget for the new year is essential for companies looking to grow and achieve a good ROI (Return on Investment). Finding the right balance between marketing expenses and generating revenue can be a challenge. Investing too little may limit visibility, while overspending without a strategy can lead to wasted resources.
In this blog post, we will discuss several steps companies can take to create a balanced marketing budget for the coming year that promotes effective marketing and a strong ROI.
Before creating a new marketing budget, it is crucial to reflect on the previous year. Analyze which marketing channels and campaigns had the most impact. Make a list of the costs per channel, the leads generated, conversions, and of course revenue. By understanding which efforts delivered the best results, you can make informed decisions for the year ahead.
Ask questions like:
This evaluation helps to determine which activities are worth continuing or optimizing next year.
By the way, there are tons of budgeting templates available online, like the one in the screenshot below. No need to reinvent the wheel, just get a template that is close to how you work, and then make some small changes to fully get aligned with your own budgetary needs.( If you’re interested in our own template, feel free to email us.)
An effective marketing budget should be based on clear, measurable goals. Do you want to increase brand awareness, generate leads, enter new markets, or promote customer loyalty? Each of these goals requires a different approach and a different budget allocation.
For example:
Setting concrete goals will help you create a more focused budget that aligns with the strategies you want to implement in the coming year.
A balanced marketing budget takes into account who your target audience is and which channels are most effective in reaching them. Not every company needs to invest in every form of marketing. If your audience is primarily active on social media, then the budget for online ads and content marketing may be higher than for traditional advertising.
The key to this is creating buyer personas for your organization. You can use our buyer persona worksheet to create these personas. These are essentially a semi-fictional representation of your ideal customer, based on actual data and market research. Having buyer personas for your business is so important to create effective campaigns or roll out a tailored strategy. They are equally important as input for budgettary decisions.
A common method for creating a marketing budget is by reserving a percentage of expected revenue. For most companies, this percentage ranges from 5% to 10%, depending on the industry and growth stage.
Keep in mind that this is just a guideline. It’s important to adjust the percentage based on your specific business goals, growth strategy, and the level of competition in your market.
A balanced marketing budget is not just about spending money it’s also about measuring the effectiveness of every Euro invested. Make sure a significant portion of your budget is allocated to channels that are measurable, so you can track results directly.
Investing in these measurable channels allows you to continually adjust your strategies to achieve optimal ROI.
Marketing is constantly changing, with new trends, technologies, and opportunities emerging suddenly. It would be smart to include a buffer in your marketing budget for unforeseen expenses, like testing a new advertising campaign, responding to a sudden market change, or taking advantage of an unexpected collaboration opportunity.
A good budget is flexible enough to adapt to possible changes. By setting aside a percentage of your total marketing budget as a reserve, you can respond quickly to new developments without overhauling your entire marketing plan.
Creating a marketing budget is not a one-time job. It’s important to evaluate regularly whether you’re on the right track and if any adjustments are needed. Use tools and reports to track your campaign performance and assess whether the ROI is still aligned with your organization’s expectations.
Continuously optimizing your marketing efforts ensures that your budget remains effective and that you get the most out of your investments. After all, a return on the investments is what marketing and sales are for, right?
Creating a balanced marketing budget is a crucial step for companies that want to grow and achieve a good ROI. With last year’s numbers, clear goals for next year, and wise investments in the right channels, you can optimize your organization’s marketing spending for the upcoming year.
Flexibility and regular monitoring are key to success. Make sure to adapt to changes and seize new opportunities. A balanced marketing budget becomes the engine behind an effective strategy that delivers results both in the short and long term. With these insights and tips, we hope to get you well on your way to a good marketing ROI.
Looking to start your inbound marketing or inbound sales journey using the Hubspot platform? Check out the ROI you can count on for your specific business before deciding anything.
