How to Plan Your Marketing Budget for 2021
Is your marketing department ready for 2021? The development and execution of successful campaigns depend, among other things, on the planning of a solid marketing budget.
After all, if you can’t justify the size of the investment your team needs, your company may decide to spend the money on other activities.
A marketing budget outlines all the financial resources that the department plans to spend in a given period — usually quarterly or annually.
The document specifies the costs, indicating how much will be allocated to each type of campaign, how much will be used to hire services, etc.
For the CMO, this is indispensable for resource management. The budget sets limits and avoids excessive expenses, encouraging investment in effective actions with higher ROI.
Although planning this type of document is something extremely relevant, the process may not be so simple. This is what motivated us to create this post, in which we will explain:
- What do you need to consider when creating your marketing budget?
- How to plan your budget allocation?
- How can you efficiently create your marketing budget for 2021?
What do you need to consider when creating your marketing budget?
The development of a solid marketing budget involves, first and foremost, an extensive understanding of your business reality.
There is no point in including in this document goals that can hardly be achieved or values that are doomed to be rejected by the financial department.
Therefore, carry out internal research to understand the company’s investment capacity for the coming year. For this, of course, it is necessary to involve other decision-makers.
This allows the establishment of consent for the company’s general objectives, which will be fundamental for creating a strong marketing budget.
Besides looking internally, it is important to look externally as well. How is your company doing in the market? Are there companies putting your market share at risk? Is it time to take bold actions, or is it better to adopt a conservative posture for now?
To answer these and other questions, you can conduct a SWOT analysis.
This tool allows you to identify the opportunities and threats surrounding the company, leading to a more efficient reflection towards the priorities of your marketing efforts.
If you are certain you have the information you need to start developing your marketing budget, here are some other points you should consider.
Your target audiences
It is common to develop campaigns for more than one target audience.
For example, you can invest in digital ads to prospect new customers and simultaneously use email marketing to reach recurring buyers.
Before developing your marketing budget, you need to consider which target audience you want to reach and, most importantly, set priorities.
With that in mind, you can create more efficient campaigns, which avoids wasting resources and occupies less budget room.
Ask yourself about each audience’s needs. If the buyer persona you want to reach has little or no knowledge about your brand, it will probably require more investment for conversion.
On the other hand, if the target is already loyal to the brand, it won’t be necessary to conduct especially robust campaigns.
The channels you will use
With your target audience in mind, you should consider which channels will be used.
If the buyer persona is a heavy user of social media, you can consider developing a content strategy, which has great organic impact and may cost very little to the budget.
On the other hand, if you want to reach an audience that only uses the internet in their professional life and is not used to accessing blogs or reading posts on social networks, you will need a heavier investment in paid advertising.
Of course, it is not recommended to engage in only one channel. Therefore, it is important to detail different platforms in your budget and indicate how much you intend to spend on each one of them.
If you don’t measure your strategies’ results, you lose good opportunities to optimize your future approach.
Considering that you have access to your campaigns and budgets from past periods, use them to generate insights into creating an ideal marketing budget.
For example, if you notice that you’ve invested some of your resources in campaigns that have proven to be ineffective, you should naturally rethink this practice.
At the same time, you can find small actions that presented great ROI despite costing very little.
How to plan your budget allocation?
One of the most important parts in developing a sound marketing budget is planning how resources will be allocated.
To do this, you need to understand the marketing department’s responsibilities and define which aspects will be covered by the budget.
As, at this time, you already know your target audience, and they are aligned with the company’s general objectives, it is possible to outline different categories efficiently.
Of course, this depends on your company’s particularities, but we will talk about some aspects that most companies include in their marketing budgets. Keep reading!
Automating marketing activities is fundamental if you want to improve your results and maximize your team’s productivity.
That’s why most companies guarantee room for investment in software when developing their marketing budget. Tools for sending email and data analysis platforms are widespread examples.
Are you planning to hire new employees for the marketing team? Then, you need to specify the costs in the budget. It is essential to note that this involves the new team member’s wage and costs derived from hiring, such as the eventual purchase of new equipment.
Many companies choose to outsource some marketing activities, mainly those related to short term campaigns.
In this case, it is necessary to specify how many dollars you intend to allocate in hiring freelancers to participate in the creative process.
Although Content Marketing is a much more affordable strategy than others, it still generates expenses.
Although Digital Marketing has become an essential tool for success in the modern market, many companies still use traditional media such as billboards and print ads.
If this is your case, be sure to specify the values in your marketing budget.
How can you efficiently create your marketing budget for 2021?
To create an efficient marketing budget, you need to go beyond budget allocation. Below are some key tips for you to conduct this process to increase your campaigns’ effectiveness and maximize your business results.
Understand your buyer’s journey
The buyer’s journey represents their path from before learning about your brand until making a purchase. Why is it important to understand this?
Well, to start with, monitoring this journey allows the CMO to understand, for example, what the main sources of lead acquisition are. This way, they will be able to make the right decisions about investment priorities.
Through this mapping, it is also possible to define the lead acquisition cost. This is an important metric, which can be used to prove to the board of directors the relevance of each investment.
The consumer journey consists of basically three stages: awareness, consideration, and conversion.
During the marketing budget development phase, it is important to define which of these phases you want to impact since there are types of content, channels, and campaigns that best fit each of them.
Calculate the cost of different marketing strategies
As you know, several marketing strategies can be employed for similar purposes.
It’s not up to us to say which is the best path for your company. Consider your characteristics and goals and compare them to different options.
As you will notice, a strategy focused on producing interactive content is cheaper than one focused on paid advertising.
Calculate the ROI of different strategies and define which one best fits the reality of your business. From this, develop your budget to contemplate the necessary actions to execute the strategic campaigns.
Define your goals
Defining your objectives is the most important action for the development of a marketing budget.
If you know where you want to go, you can determine more accurately how much you will spend and how you will allocate your investments.
Such decisions must also be aligned with the general objectives of the company.
For example, if the company plans to enter a new market, your marketing actions should contain paid advertising campaigns aiming to increase brand awareness and promote products and services.
On the other hand, if the company’s goal is simply to attract more leads and increase its reach, its marketing efforts can focus on organic campaigns, reducing investment size.
The marketing budget preparation process involves several factors. In addition to knowing the company’s challenges and objectives, you need to consider your target audience and make decisions related to the strategic process.
With a solid budget, it is easier to conduct campaigns with high levels of ROI.
Start planning your 2021 strategy! We developed a marketing budget calculator to help you make the best decisions according to your business particularities. Access it now!