What To Consider When Setting A Marketing Budget.
By Melanie Venuto
A common mistake businesses make is building a strategy around a marketing
budget rather than crafting a budget based on a strategy. The latter allows for
strategic allocation and prioritization of budget. The first approach, however, can
often lead to misguided decision making, leaving marketers struggling to prove
ROI and therefore, making it even more difficult to make the business case for
increased budget later on. Knowing how much you have to spend on marketing is
important. Knowing how to spend it is critical. The best way to ensure that your
marketing investment will be well spent is to take time upfront creating a sound,
comprehensive, and strategic marketing plan. From there, prioritize the channels
in your strategy and allocate budget where it’s needed most. A marketing budget
should be a component of your marketing plan, rather than a driver. Your mar-
keting strategy should outline how you are going to achieve your marketing
goals and what it’s going to cost you.
As you and your team are defining your marketing goals and developing a strat-
egy and budget behind it, it’s important to keep the following in mind:
Marketing is an Investment, Not a Cost
It’s a mistake to perceive marketing initiatives as costs or as an obligatory ex-
pense. For this reason, marketing budgets are often lumped into a sales budget,
leaving marketing and sales departments to decide what gets allocated where.
The result? Classic conflict between sales and marketing teams.
It’s a mistake to perceive marketing initiatives as costs or as an obligator y ex-
pense. For this reason, marketing budgets are often lumped into a sales budget,
leaving marketing and sales departments to decide what gets allocated where.
The result? Classic conflict between sales and marketing teams. When creating a
marketing plan for your business or pitching a strategy to your leadership team,
communicate marketing spend as an investment. A purpose-driven, strategic
marketing plan can produce large return on investment when it’s executed effec-
tively. It costs money to make money. When funding is spent the right way, your
return will exceed the cost.
It’s Not Just About the Money
When developing your marketing budget, it’s crucial to take labor into considera-
tion. Time is money, And when marketing plans are executed by personnel that
are inexperienced or inefficient, you’ll see minimal ROI. You could spend thou-
sands of dollars on tools and services, but you need to factor in the time it takes
for your teams to learn and use the tools that you invested in. A recent CMO sur-
vey reports that despite large investments in analytics and marketing tools, busi-
nessleaders are not able to see high ROI due to lack of trained professionals
working with the tools. This is causing many leaders to dismiss analytics all to-
gether. In fact, according to the survey, only 35 percent of marketing leaders
report they formally evaluate the value of their marketing analytics.
Melanie Venuto
Human, being. Managing Editor/Content Strategist
Instagram: Melanie_Venuto
Test, Analyze, and Adjust
In marketing, data is your friend. Don’t wait until
the end of the year to see if things are working.
Analyze your campaigns and adjust budget alloca-
tion as needed. In digital marketing, this happens
on a quarterly basis and it takes skilled and knowl-
edgeable marketers to understand what the data
means and change course when needed. With digital
platforms changing constantly, it’s imperative to
have a team that keeps up and knows how to make
the most of those opportunities. It is a valuable
expense to pay for analytics training for at least
one person on your marketing team. Most market-
ing strategies in the music industry focus on social
media. The best approach is to prioritize the chan-
nels and allocate budget where it’s needed most.
Whether a budget is tight or robust, the quality of
the strategy and how it is implemented matters
most.
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