Your marketing budget is the biggest indicator of where your strategy is going. Whatever you spend your budget on is ultimately where marketing will be heading. This is why effectively allocating your budget is vital for seeing growth within your department, and your organization that is aligned to your strategy. Now, the big question is, how do you go about doing this?
With so many areas to invest in and different factors to take into consideration, effectively allocating your budget can sometimes feel like a juggling act. Every organization has differing goals and priorities, be it brand awareness or generating qualified leads or sales, and these goals can be achieved via multiple options. All of these factors contribute to different results, meaning that there’s no set formula to a winning budget. However, by following these five steps, you can start getting the most out of your marketing budget.
- What are your goals? And what are you expecting to achieve?
The first step is to identify what your marketing and overall business goals are. The direction you want to move will influence where you should consider investing your money. Before you start deciding where to spend your marketing budget, identify your priorities and what you'd like to accomplish. This should help you decide where to allocate your budget.
- What are the expected costs? What’s the ROI going to be?
When you're planning your marketing budget, it’s vital to take into consideration the expected costs and what the ROI should be. Ask yourself questions such as what content will generate good leads for sales? Or are some channels more effective than others at hitting revenue goals with this content? You will quickly form a basis for where you should be taking your marketing budget.
- What’s currently working and what’s not?
Leading on from the second point: It’s vital to have a good understanding of everything that's not working and why. A winning marketing budget is one that doesn't waste money on activities that aren't bringing results.
You need to keep investing in the tactics that are showing good results and then explore new areas, which whilst being uncertain, can bring innovation and new opportunities of growth to your organization. Good tactics can also fail when the well runs dry. By continuously monitoring your activities, you will see trends that tell you when to stop investing in something, freeing up funds for new ideas.
- Segmenting your budget and finding a winning formula
With so many changing factors, it is common for your marketing budget to become misaligned with your plan and strategy. It is essential to segment your budget by breaking it up into dimensions that can be easily tracked. This is best accomplished through the marketing plan itself, where dimensioning makes sense. After setting your plan up with the necessary dimensions, mapping the cost elements of your plan to the finance budget categories themselves will save a lot of time during reconciliation and month-end finance activities
- Tracking your results to optimize
By tracking actuals back to your plan, you will be able to apply any segmentation from your plan to your actuals. You will be able to see what was actually spent on each audience or persona, each geography, each asset and each delivery mechanism. Further, you will be able to see your performance through the same dimensions, calculating real ROI from your efforts.
There’s a lot that needs to be considered when you're allocating a budget; however, by following these five steps, you start to create a budget that reflects your needs and how you can go about achieving it. It’s about using the information that you have, understanding what’s working, and how you build on this to ultimately increase growth for your company.
Discover how Hive9 can help you effectively allocate your budget. With our marketing planning software, we make sure you get the most out of your marketing budget. Get in touch with us today.