The Marketing Chicken and the Budget Egg – deciding on, and spending, your marketing budget
A common question we get asked is ‘How big should my marketing budget be?’. In reality, this entirely depends on what you are trying to achieve. The reason this is a bit of a chicken and an egg is that when defining what your marketing outputs and goals should be, a strategy can only be built once budget has been allocated.
Often one of these factors is informed by wider business decisions and strategic objectives. So, the right question to ask is ‘How do I best spend my marketing budget to get the best results?’. We’ll hopefully give you some food for thought on this question below.
What are you trying to achieve as a business?
The first place to look is your wider business strategy. We always say that marketing and sales are two sides of the same coin and they should both ladder up to the key objectives of the wider business. The broader business strategy should give the business both a clear direction but also a set of milestones against which to measure success. Typically, these are what your marketing strategy should help you achieve.
Once you’ve sense-checked that these goals are realistic, understood and defined your audience(s), agreed your tone of voice and locked down your proposition, the next step is likely going to be some form of go-to market strategy and/or channel plan.
A quick pause – Several articles or even a book could be written on each of these alone (and, indeed, many books have been written), so if you’re struggling, we recommend taking a breath and then taking a deeper dive into each of these topics in turn.
Working out how to split your spend
Ready to look at marketing spend? Good – so now you’ll want to explore which channels are right for your business. This is the crux of how your marketing will unfold over the next 6,12,18 months and beyond. Different channels bring a whole complex and differing range of benefits; for example, PR is great to get incredible reach in terms of bang for buck, whereas paid search will give you very reliable and predictable results. Building a community through organic social might take time, but ultimately they will become massive assets for your business. A good channel plan will have a healthy and defined mix of tactics.
A few tips (and pitfalls to avoid)
- Don’t try to do too much at once – A common mistake we see is businesses wanting to be all things to all people. If you’ve got a limited marketing budget (and let’s face it, we all do), the best bet is to choose the channels that you can afford and that are going to get results.
- Don’t put all of your eggs in one basket – Countering the above, another common issue is limiting all marketing activity to just one campaign or one activity. For example, we’ll often have people approach us saying we’re going to put everything into PR, do nothing else, and that’s the plan for the year. Make sure to have a healthy mix of channels
- Measure success but don’t get caught up in measurement – Of course, it’s essential to track performance. Before spending your money, you should agree on metrics that will help you understand performance – any good agency will help you with these and will tell you what ‘good’ looks like. Listen to your agency here. Once you’ve got these metrics agreed upon, stick to them. It can get easy to get caught up in one or two numbers that actually form only a small part of a much wider picture
- Set realistic goals – It’s good to be ambitious but don’t be naive. Again, we would strongly encourage you to listen to your agency. When agencies caution against an overly large target, this isn’t to cover themselves, it’s usually because they’ve ‘been there’ and ‘done it’ so many times that they know what a realistic expectation of good looks like. You wouldn’t expect to get around-the-world first-class flights for £500 – why would you expect to get national TV coverage for £500 from a standing start? (Honestly, we’ve seen this!)
- Stop, chop and change – The great thing about a channel plan and the marketing mix these days is the speed at which we can learn, report, review and change. It’s important to regularly review how things are performing, to see what is working and what is not. The fact that certain things might not work can actually be a benefit – this helps you learn, acknowledge, judge and pause or change the stuff that isn’t performing. This is how you improve. Just make sure to learn and change quickly.
- Ask for help – A marketing budget can often be one of the largest outlays / spends / budget lines for a business. As a result, there are naturally going to be a lot of people interrogating performance. Just like most things in life, it’s ok to ask for help. That’s what we’re here for!
So hopefully by now, you’ve got an idea of how best to spend your marketing budget. If, however, you need more information or want to sit down with a team experienced in marketing budgets and how to get the most out of them, get in touch with us today.