How to set up a digital marketing budget for 2016 [EBOOK GRATUITO] – WAU
It is essential to have a well-defined plan to establish a realistic budget that really brings results for your company. Understand how to do it!
If you have a company, you are certainly more than aware of the importance of a budget (or budget) well planned.
And that goes for any industry – including marketing! But do you already know the best strategies for set the budget intended for your company’s marketing activities?
If you have any doubts about this, you have come to the right place.
In today’s post, we will dissect the budget planning for the marketing industry of your company.
What are the marketing expenses?
A budget is not simply a random number.
There is no point in getting up in the morning saying “this year, my company will dedicate R $ 50 thousand to the marketing budget”.
For the total number to make sense, it is necessary to individually plan each of the expenses that he needs to pay. So the real question is: what are your company’s marketing expenses?
It is logical that each company has different expenses. Thinking about different businesses, we can come up with the following examples of what should be considered when planning the budget:
Agency or service providers
Your marketing industry may not do everything internally.
Many companies are betting on an in-house sector with a strategic focus, but outsource execution to specialized agencies or freelance professionals. In that case, you need to consider the contract cost within the marketing budget.
Marketing still works a lot with printed materials, such as posters, folders, catalogs and business cards.
Over a longer period, such as a semester or a year, this expense ends up adding up to high amounts, especially because they are special, high-quality prints. So be sure to include this item in your budget.
Most companies have already joined the use of digital ads, such as Google AdWords and Facebook Ads.
They can be used to promote company blog posts, product pages, landing pages and so on.
They are a good strategy for gaining greater visibility and gaining leads, so it is interesting to invest in them. Ads with higher bids are shown more often. Be sure to consider this item when drawing up your marketing budget.
Even if your marketing team acts on a more strategic front, you will probably need software to perform various tasks.
Therefore, it is necessary to consider investing in software related to your business, whether they are for image processing, text production or even marketing automation.
Corporate events are also part of the scope of the marketing sector.
Do not forget to include in the budget an amount intended to organize the company participation at fairs and exhibitions, or promote own events.
Within this value, it is necessary to consider several other items, such as space rental, buffet, sound design, decoration, stand construction, development of gifts and security. Depending on the type of event, expenses (and the amount needed) can vary widely.
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What is the goal of marketing?
From one year to the next, the marketing industry’s goal can change dramatically.
For example, a company that has just been launched on the market will be more focused on positioning and promoting the brand, in order to attract its first customers.
A company with a long time on the road can focus on customer loyalty to protect its market share.
Each of them will conduct their marketing according to these distinct goals. And, in the same way, each one will have different expenses with marketing.
What does this all mean?
To determine the marketing budget for a year, it is necessary to take into account the goal that the sector intends to achieve in the period.
Using the companies in our example, the former will likely spend a lot more on advertising, while the latter can focus its investment on support tools and a well-structured customer success team.
That’s why budget planning needs to be done together with strategic planning.
It is useless to ask your financial staff to prepare a marketing budget, as they simply do not know how this money will be used.
The best option to define is to align the teams to establish a financial and marketing plan that work together.
How to estimate values?
Very well, you already know what are some of the possible marketing expenses and also how to distribute the budget among them according to the goals of the sector. But we have not yet reached the main point: how to estimate the amount that should be attributed to each category of expenditure?
There are different answers to that question. All are valid, so you can use the method you find most convenient.
Using previous references
If the expense category concerns something you’ve done or used before, then, you have some reference of how much you need to make available.
For example, if one of the items in your budget is the payment from the marketing agency, and you have worked with an agency in the past, you can use the previous contract as a base reference.
This does not mean that you will be working with the same agency this year. And if it works, it may be that the values are different. But at least you’re starting from a well-founded estimate for your budget.
If you have never had a similar expense in your marketing budget, you can make a quote, just to get an idea of the values practiced in the market.
Call some suppliers, give general information and ask for a value proposal. Then average or use the highest quote to base your budget.
Of course this quote will not be accurate. For example, if you think the company is going to organize an event during the year, you can quote for the buffet expenses; the problem is that you have no idea, yet, how many people there would be at that event or what the ideal menu would be for the occasion.
After all, it’s just an estimate – maybe the company won’t even host the event, who knows?
Working with a safety margin
As you probably noticed, the two methods we present are inaccurate. And that is why the safety margin is a must for your marketing budget.
Basically, you should always estimate a little more for each budget item – a good margin is 15% to 20% of the value.
Taking into account the company’s financial availability
The first two methods assume that there is good flexibility to accommodate marketing expenses in your company. And it works very well for medium and large companies.
But, on the other hand, small businesses may face a resource constraint.
In this case, the best method is to start from the value that can be made available to the sector and then distribute it among the planned expenses. This process is basically an allocation issue.
If you only have $ 20,000 for marketing next year, how are you going to distribute that money among budget items?
To do this, of course, take into account an estimate of how much each item will cost and be aware that you will need to make a much greater effort to negotiate prices and reduce costs.
You may have to eliminate some less important items in your planning. Therefore, it is essential to keep in mind the strategic goals of the sector and prioritize the items that will really impact.
Why make a marketing budget?
We have already talked a lot about how to budget for the company’s marketing sector. Before closing this post, let’s reinforce the importance of this practice?
Planning the marketing budget is important to ensure that the company’s resources are being used up. well employed.
Thus, waste is avoided in activities that will not bring return or, even, opting for more expensive options without good reason.
A well-done budget is also an security for plans and perspectives from the company.
When there is a budget, you can compare the planned with the real, determining if the expenditures are within what had been forecast and authorized at the beginning of the period.
That way, you’ll know that your company’s resources are not being used randomly.
Do you want to learn more about marketing and especially about digital marketing?
WAU has prepared an entire ebook focused on SMEs. Take the opportunity to download this material right now, and find out how digital marketing can benefit your business and how to apply it in practice!