advertising budget in business plan

• Credit cards
• View all credit cards
• Banking guide
• Loans guide
• Insurance guide
• Personal finance
• View all personal finance
• Small business
• Small business guide
• View all taxes

You’re our first priority. Every time.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .

How to Create a Small-Business Marketing Budget

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

A marketing budget is an estimate of how much money a business plans to spend on marketing its products or services during a given timeframe, such as a year. Costs that should be taken into account when creating a marketing budget include marketing software , staff payroll, ad campaigns, signage, promotional materials, events, digital assets and potentially third-party services.

Your marketing budget is both informed and dictated by your marketing strategy, which should determine your business's goals, customer base, market niche, branding and preference. Failing to create a marketing budget could lead your business to overspend and affect your broader business budget , or underspend and deprive your business of the exposure it needs to establish a strong customer base. But it's also important to remember that this is an estimate and can be adjusted as your business evolves.

Determine your marketing goals

Your goals are the results you want your marketing efforts to yield. The end goal of all marketing is to grow your business in some way by increasing sales, but you want to try to be more specific. Examples of marketing goals could be to drive traffic to your company website or increase engagement rates on social media posts. The more specific your goals, the more clear your strategy — and the spend associated with it — will be.

Think like your target audience

Your target audience is the group of people most likely to transact with your business. You'll want to tailor your marketing outreach to best reach this group and convert them into paying customers. Performing market research can help you narrow down who this group is, as well as how they discover and interact with businesses like yours. Whether it's through social media, email, direct mail, commercials, search engines, or other means, knowing what platforms you'll incorporate in your marketing plan will help you estimate the costs associated with them.

Consider your revenue

Many businesses base their marketing on a percentage of their gross revenues. The benefit of this approach is that your marketing budget will rise along with your sales. However, keep in mind that marketing generates sales — not the other way around. That means a startup business likely needs to budget a disproportionate percentage for marketing compared to its sales.

For new businesses, look at your sales projections for your first year in business — this should be part of your business plan . For more established businesses, you can leverage real data and financial reports to determine your revenue and how much of your overall budget you can allocate to future marketing based on your goals.

The average marketing budget in 2022 was 9.5% of a company's overall revenue. [0] Gartner . How CMOs Are Spending Their Marketing Budget – and What It Means for You . View all sources This figure will vary across businesses based on size, industry, revenue and more. There are also plenty of low-cost and even free advertising tools to help keep your marketing costs down.

Use budgeting templates and tools

Free business budget templates abound to help you calculate your marketing budget. You can also consult SCORE's annual marketing budget template , as well as the organization's other small-business resources. If you're looking for something more automated, budgeting software is designed to help you manage, track and forecast budgets. However, before you pay for standalone software, first check with your accounting software . Many of these platforms include budgeting and forecasting tools and since they're already tracking your business's other financial information, you don't have to worry about transferring data between programs.

A version of this article originally appeared on Fundera, a subsidiary of NerdWallet.

On a similar note...

Home Marketing Marketing Budget: The Complete Guide

Marketing Budget: The Complete Guide

You know you need to get your brand’s message out there.

You even have some ideas for how to do it.

But how do you know which ideas are the best ideas?

And how much should you even spend?

It sounds like you need a marketing budget .

What’s in This Guide?

This guide covers everything you need to put together an effective marketing budget to ensure your company’s sustained growth:

• Why is it important to spend on marketing?
• What is a marketing budget?
• Why is a marketing budget important?
• Aligning your marketing budget with your business goals
• Brand vs product-specific marketing costs
• How to calculate your marketing budget
• How to create your marketing budget
• Final considerations for your marketing budget

Let’s dive in.

Why is it Important to Spend on Marketing?

Marketing is essential to build brand awareness and increase company revenue. Without investing in marketing, you’re relying on grassroots word of mouth to grow your brand, which, while possible, can take a very long time.

Plus, chances are your competitors are investing in their marketing efforts. If you aren’t at least keeping up with them, you’re losing both market share and time, as it’ll be harder to reclaim that market share later on.

What is a Marketing Budget?

A marketing budget is the total money allocated to growth and promotion-related efforts over a defined period, such as one month, one quarter, or one year. These efforts can include the following:

• Website design and development
• PPC ad campaigns
• Social media campaigns
• Email marketing campaigns
• Content creation for content marketing campaigns
• Backlink building
• Print, TV, radio, direct mail and other traditional campaign channels
• Employees and contractors working on marketing-related efforts
• Tools and software used for marketing-related efforts

The size and complexity of your marketing budget will vary by the size and complexity of your business.

Small businesses may have simpler marketing budgets with just a handful of employees or contractors creating a few blog posts for a content marketing campaign and promoting those posts with basic PPC and social media ads.

Large businesses may have much more complex marketing budgets spanning multiple departments or divisions, each with different department-specific business goals that tie back to your broader business’ growth targets.

Why is a Marketing Budget Important?

Having a marketing budget is hugely important for several reasons.

1. You know exactly how much you can spend

If you don’t have a budget, how do you or your employees know how much to spend?

Let’s say you sell a subscription-based product where the average lifetime value of one customer is $2,000. You tell your marketing team to generate more customers, but you don’t tell them how much to spend. Come month-end, your team tells you they signed up 100 new customers worth $200,000 to your business, and it only cost $100,000.

That’s awesome, except each customer only generates $500 in revenue in their first month, so you just spent $100,000 to generate $50,000 in Month 1 revenue, and now you can’t make payroll next week.

2. You can properly size your marketing spend

As a corollary to the above, having a marketing budget lets you properly size that budget to optimise for your business’ goals. That way, you can find the sweet spot where you’re growing at the right pace while remaining solvent.

If your budget is too small, you may fall short of growth targets and/or lose market share to competitors.

If your budget is too big, you may have to cut back elsewhere to avoid going under.

3. You’re forced to prioritise your marketing efforts

Between PPC ad campaigns, social media ads, paid sponsorships and promotions, traditional print ads and other strategies, there are a lot of different ways you can spend to grow your brand.

But if you know you only have $5,000 per month to invest in a single channel, you’re forced to prioritise one channel above all others. A tool like   TrueNorth  can help you make that decision.

Aligning your Marketing Budget with your Business Goals

Your marketing team is hard at work spending their budgeted allocation to build your company’s brand and generate new customers.

But what if that isn’t what they’re doing?

Or, more specifically, what if that isn’t what they’re doing directly ?

Think about your company’s sales funnel for a second. Yours probably looks something like this:

Now think about what your marketing team is doing and where in the funnel they’re operating.

They should be trying to generate as many customers as possible, but are they instead thinking in terms of qualified leads, traffic, or impressions?

Let’s look at two basic scenarios to illustrate this point. In both scenarios, your company is promoting your awesome email marketing course, which you sell for $1,200.

In Scenario A, your marketing team is running a PPC ad campaign to maximise traffic by targeting keywords like “why use email marketing” at $10 cost per click. They have $15,000 to spend and generate 1,500 visits to their target page, which leads to 15 new customers (1% conversion rate) with $1,200 revenue per customer.

In total, they spent $15,000 and generated $18,000 in revenue for a 20% ROI.

In Scenario B, your marketing team is running a PPC ad campaign to maximise customer conversions by targeting buyer-focused keywords like “best email marketing course” at $20 cost per click. They have $15,000 to spend and generate just 750 visits to their target page, but those 750 visits turn into 25 new customers (3.3% conversion rate) with the same $1,200 revenue per customer.

In total, they spent $15,000 and generated $30,000 in revenue for a 100% ROI.

The marketing team in Scenario A was able to generate twice as much traffic, but the marketing team in Scenario B was able to generate much more revenue for the same ad spend because they were targeting customers further down in their sales funnel.

This doesn’t mean you should always target customers already in the buying phase of their journey. Maybe targeting customers at the top-level awareness stage of the sales funnel gives you the best ROI because they’re less expensive to acquire and your email marketing efforts are convincing.

To make the most of your marketing budget and generate the highest possible ROI, your marketing team must think in terms of your business’ goals.

Brand vs Product-Specific Marketing Costs

At any given time, your company is marketing itself at two different levels:

• General brand awareness and visibility
• Product-specific promotion and lead generation

These two types of marketing are complementary, and an effective marketing budget considers both.

1. General brand awareness and visibility

Spend some of your marketing efforts on general brand awareness. If your company sells B2B training courses, like the email marketing course example above, you want to spend money promoting your brand’s overall expertise and authority. There are a ton of different forms this level of marketing can take:

• Sponsorships
• Guest blogging or podcast appearances
• Traditional TV and print ads
• Display ads and native advertising
• Branded social media hashtag campaigns

These marketing efforts prop up your entire company, which has indirect benefits on revenue generated by your specific products.

Though not universally the case, frequently, these types of brand awareness marketing activities have fixed monthly budgets because they’re ongoing with more indirect efforts.

But just because these campaigns are more indirect and don’t directly promote specific products doesn’t mean you can’t (or shouldn’t) try to track their ROI, though it can be more difficult. Monitor referral traffic, on-site engagement and email sign-ups to measure the value of your brand awareness efforts.

2. Product-specific promotion and lead generation

One level deeper than general brand awareness is product-specific promotion. If your company sells B2B training courses, this is the money you spend promoting a specific course to generate more customers and revenue directly.

While product-specific promotional efforts can have global effects propping up your whole brand, those benefits are secondary to the primary goal of generating more customers and revenue through increased sales of the specific product being promoted.

Product-specific marketing campaigns have a different feel than general brand awareness campaigns:

• PPC ad campaigns for specific product-related keywords
• Paid influencer promotions featuring your product
• Giveaways of free product for trusted brands in your industry to review
• Content marketing campaigns with solution-focused blog posts and tutorials

These types of marketing efforts have one goal: Generate more sales of your specific product.

These types of product-specific marketing activities usually have variable budgets. That doesn’t mean you spend different amounts every month, but rather that your company’s product offerings are more dynamic than your brand itself. If your company is releasing a new or updated product, you may want to increase marketing spend for that product to generate buzz and momentum at launch. Over the following weeks or months, maybe your company has another product to promote or is releasing an update of an existing product, and you want to focus marketing spend there instead.

How to Calculate your Marketing Budget

Broadly speaking, there are two common ways to set marketing budgets:

• Benchmark budgets
• Zero-based budgets

One is significantly better than the other.

1. Benchmark budgets

Benchmark budgets are bottom-up budgets, meaning they assign spend based on a bottom-line number. Examples of benchmark budgets are the following:

• 12% of revenue
• 12% of revenue after expenses (“Profit-First” budgeting)
• Fixed budget every month, quarter, etc.

Benchmark budgets are common because they’re safe and easy, but they give little consideration to your business’ goals or growth targets.

It’s like training for a marathon by running 15 miles each week. It’s certainly better than running five miles each week, but is it enough training to finish in under four hours? I guess you’ll find out come race day.

2. Zero-based budgets

Zero-based budgets are top-down budgets, meaning they work backwards from your business goal to determine how much you need to spend.

For our marathon trainer, that means working backwards from your target finishing time to determine your average pace and the number of miles you need to run each week to improve to that pace.

This approach is more purposeful and gives you the best chance of hitting your goal.

A zero-based marketing budget begins with your TrueNorth metric ; the one metric, that if increased, will achieve your business’ goal.

Let’s revisit our email marketing course example above. Let’s say your goal is to generate $600,000 in revenue over the next 12 months. With zero-based budgeting, you work backwards from that goal:

• Your goal is to grow revenue by $600,000 in 12 months.
• At $1,200 in revenue per customer, that’s 500 new customers.
• Assuming a 50% gross profit target, that’s a target acquisition cost of $600 per customer.

Depending on the specific marketing tactics you plan to use, there are a lot of different ways to reach that $600 per customer target. Let’s go back to Scenarios A and B above.

For the marketing team in Scenario A trying to generate new customers with a PPC ad campaign targeting keywords like “why use email marketing,” they know their campaign converts leads into customers 1% of the time. If they want to hit their $600 target customer acquisition cost with a 1% conversion rate, they can’t spend more than $6 per click.

For the marketing team in Scenario B trying to generate new customers with a PPC ad campaign targeting keywords like “best email marketing course,” they know their campaign converts leads into customers 3.3% of the time. If they want to hit their $600 target customer acquisition cost with a 1% conversion rate, they can’t spend more than $20 per click.

If you don’t know which campaign ideas have the best ROI yet, I recommend using a tool like   TrueNorth  to track all of your campaign ideas and record their results in a centralised place so you can hone in on your best campaigns and grow your business faster.

How to Create your Marketing Budget

Creating your marketing budget is a little more involved than just earmarking dollars for different costs or campaigns. You’ll want to focus on these five steps:

• Determine your business’ objective and its True North metric
• Understand your sales funnel
• Quantify your operational costs
• Factor in all product-related promotional costs
• Measure and track ROI

Let’s take a more in-depth look at each.

1. Determine your business’ objective and its True North metric

Every solid marketing budget starts with the top-line business goal. What is success to your business?

Once you know what success means for your business, you can determine your True North metric; the one metric that, if increased, will achieve that goal.

This initial step is crucial because everything after it should always tie back to that objective. If your marketing plan and budgeted expenses don’t move the needle for your True North metric, should you be doing them?

2. Understand your sales funnel

Your sales funnel describes how you move visitors through the various stages of the buying process to become revenue-generating customers.

It should cost less money to generate general prospects or site visitors who are at the top of the funnel — further away from making a purchase — and haven’t become qualified leads yet.

Conversely, it should cost more to generate highly-qualified leads who are lower in the sales funnel and ready to buy.

Your goal should always be to optimise your sales funnel by putting the right campaigns, marketing materials, content, and sales pitches in front of the right visitors or leads depending upon where they are in the buying journey.

If you do this successfully, you can know two crucial pieces of information about your sales funnel:

• The cost to acquire a prospect, visitor or lead at each stage.
• The conversion rate of each stage into revenue-generating customers.

Now you can maximise your marketing budget’s performance by creating campaigns that target potential customers at the stage of the funnel with the highest ROI.

3. Quantify your operational costs

The amount you pay for each click in a CPC ad campaign is just one marketing-related cost. You may also have operational costs that are more fixed in nature that your company needs to budget for regardless of the size of your brand or product-specific campaigns:

• Employee/contractor salaries and related expenses
• Email marketing tools  and CRM software
• Website domain registration and hosting
• SEO-related tools and expenses

Whether you spend $20,000 or $200,000 on an ad campaign, you’ll have to account for these mostly-fixed expenses just to keep your marketing teams’ lights on.

4. Factor in all product-related promotional costs

When gearing up for a new product’s promotional launch, it’s easy to forget any expenses you incurred in the prior months preparing for launch.

• Market research
• Focus groups to generate customer feedback
• Testing to develop the perfect campaign messaging

All of these expenses factor into your total marketing cost even though they may not directly show up on your active campaign’s budget.

5. Measure and track ROI

Your business should always be looking to improve your marketing ROI to get a better bang for your buck. A key part of that is frequent measuring and tracking of campaign performance.

Six Sigma is a set of techniques that focus on process improvement, and an integral part of Six Sigma methodology is this process of continuous refinement and quality improvement known as the   DMAIC Process :

• Define  the True North metric and KPI that tie your marketing team’s efforts to your business’ goals.
• Measure the defined metrics while your campaign is running.
• Analyse the data generated from the measurement process.
• Improve  your campaigns by tweaking the performance of underperforming campaigns, landing pages or email copy, or look to cut underperforming campaigns altogether to focus on high-ROI activities.
• Control  this iterative improvement by documenting the process and making it part of your marketing team’s day-to-day workflow.

Final Considerations when Creating your Marketing Budget

Before you rush off to create your company’s marketing budget, there are a couple of final considerations to make:

• Your company’s marketing maturity and your True North channel
• The role of remarketing

1. Your company’s marketing maturity and your True North channel

Your marketing budget should be agile and responsive, so it can react to what is (and isn’t) working. Overall, the idea is to do more of what generates the best results and less of what doesn’t.

A key part of finding what works is identifying your True North channel; the channel that generates the best results.

There are three phases of   marketing maturity  that your marketing team can use to figure out how to allocate marketing spend across various channels:

• Phase 1 : You’re looking for your core channel, which requires investing a small amount of your budget in a wide variety of channels to see what works.
• Phase 2 : You’ve found your True North channel, which means you can focus intensely on maximising your returns until they begin to diminish.
• Phase 3 : You’ve saturated your True North channel, which means you should slowly experiment with one or two other channels to diversify your efforts.

This is all a part of DMAIC continuous improvement process and is integral to your marketing team’s sustained success in an increasingly competitive landscape.

2. The role of remarketing

Remarketing lets you customise your message to speak directly to visitors who have seen your site before. Considering   97% of people  will visit your site without making a purchase, remarketing is an important and cost-efficient way of continuing the conversation with people who are familiar with your brand or product but haven’t pulled the trigger on a purchase yet.

Earlier we talked about how important it is to put the right campaigns, marketing materials, content, and sales pitches in front of the right visitors or leads depending upon where they are in the buying journey. Remarketing is an extension of that by putting personalised, targeted content in front of specific people. Plus, CPC rates for remarketing ads cost   half as much , as regular ads, and can convert   over 50% better .

Your marketing budget includes everything your company needs to spend on promotion-related activities and should always align with your business’ goals. If your top-line goal is to increase revenue, then your marketing budget should be created from the top-down to include the resources required to hit your revenue targets.

It’s also important to focus those resources on promotional activities and marketing channels that generate the highest ROI. If you don’t know what those activities and channels are, begin by experimenting with small marketing spend across a variety of channels to identify the big winners. If you do know what those activities and channels are, focus your efforts on maximising your returns until your results begin to diminish.

Above all else, remember that your company’s marketing efforts should be agile and responsive as you react to changes in performance in constant pursuit of the highest possible ROI.

We’re currently in the process of building TrueNorth, a marketing management system that helps marketing teams create adaptable plans, prioritise campaigns, and rally their teams around the marketing plan.

If you’re interested in joining our beta, you can join here . As a Venture Harbour reader, you’ll be jumped to the front of the beta queue.

Marcus Taylor is the founder of Venture Harbour. He’s also an early-stage investor, advisor & the youngest Patron of The Prince's Trust.

More from Marcus

• Follow Marcus

You may also like

5 Best Project Management Software for Marketers

Our pick of the leading project management tools for planning and staying organised as a marketing team.

How to Plan a Marketing Sprint

Marketing sprints are a staple of agile marketing but the hyper-productive philosophy they encompass can benefit any marketing team – especially if you ever feel your workload getting on top…

How to Run Daily Standups for Marketing Teams

Daily standups are quick-fire meetings designed to keep teams focused and raise issues that could prevent them from achieving their goals. Sometimes also referred to as daily scrums, standup meetings…

TrueNorth Serene Automation Insider StackUp

Popular Guides

Email Marketing Software Marketing Automation Software ActiveCampaign Review Webinar Software

About Blog Careers Contact

Privacy Policy   |  Cookie Policy    | Editorial Policy  | Terms of Use

© 2024 Venture Harbour. Ltd is a company registered in England and Wales. Company No. 8291791. VAT No. 290356105. Registered office: Lytchett House, 13 Freeland Park, Wareham Road, Poole, Dorset, BH16 6FA

• Growth marketing articles
• Marketing ops articles
• Marketing strategy articles
• Marketing acquisition articles
• CRO articles
• Content marketing articles
• Affiliate marketing articles
• Lead nurturing articles
• A/B testing tools
• CRMs (with automation)
• Email marketing software
• Growth Marketing Software
• Landing page builders
• Lead generation tools
• Marketing calendar software
• Transactional email services
• Webinar software

16 Ways for Creating a Marketing Budget (and How to Spend It)

Table of contents

There’s no such thing as a perfect marketing budget. The right allocation of resources hinges heavily on your business, your customers, and more.

If you’re just getting started with marketing (or even if you’ve been in the game a while), that can make budget allocation a prickly subject to tackle—how do you even approach it? But when your business depends on solid marketing to grow and thrive, solving the riddle of marketing budget allocation falls to you.

So why create a marketing budget? How do you find the right distribution of tactics and budget for you?

While there’s no right answer, we asked 52 marketers to share their best tips for allocating marketing budget. Here’s what they had to say.

What is a Marketing Budget?

• Why is it Important to Have a Marketing Budget?

What is Included in a Marketing Budget?

16 tips for creating a marketing budget.

A marketing budget can be best described as an estimation of a business’ revenue and expenses for specific marketing related projects  (promotion of its products and services) over a specified period of time (monthly, quarterly or yearly).

Marketing budgets are usually drawn up to cover expenses such as payment for new marketing software, website maintenance, speaking engagements, paid advertising, and so on.

Why Is It Important to Have a Marketing Budget?

Regardless of the size of your business, the benefits of setting money aside for driving awareness, boosting sales and revenue through your marketing efforts cannot be overstated.

So below, we’ve put together a few reasons why having a marketing budget for your company is important.

1. It allows you allocate your resources effectively

Having a marketing budget allows you to keep track of all your expenses, cut down on unnecessary costs and allocate your resources only to marketing projects that support your marketing goals and are likely to generate good results both short term and long term.

2. Easily track your ROI

When it comes to creating a marketing budget for the new fiscal year, one way to assess how marketing contributed to generating revenue, as well as the ROI for your marketing efforts is to dive deep into your marketing budget. How much did you spend? How much profit did you make? Does it make sense to focus on certain projects next month, quarter or year if they’re not resulting in more leads, sales, etc?

Related: Best Tips for Calculating Marketing ROI

3. It encourages long-term planning

A marketing budget does not only cater to your current marketing needs but also covers future projects. A great practice would be to have your marketing budget closely aligned with your marketing or business goals/plan. So, for example, if you plan to publish 20 blog posts in a quarter, ideally, you would also want to ensure your marketing budget covers expenses such as the cost of hiring freelancers, paying for an SEO tool to help with keyword research, etc

4. Keeps everyone motivated

Team members will be better motivated to put their best foot forward when they know that the company prioritizes funding tools, marketing reporting software , and resources that will help them do better work. Hence, why having a marketing budget is important. It communicates the company’s goals, priorities and involves team members by asking for their opinions on what the company should be spending on.

Before we get into the details for effectively creating your marketing budget, it’s important to quickly review the things you should include in yours in order to create an accurate and realistic budget.

Typically, the following should be included in your marketing budget:

• Software/Tools: Think your email service provider (ESP), any automation tools, analytics tools, web conferencing software, etc. You can include web hosting and domain renewals in here, too.
• Salaries:  The salary of those on your marketing team should be included in your overall budget, too.
• Outsourcing: Does your team hire freelancers, temps, or paid interns for specific projects? It’s important to work that into your budget.
• Advertising Spend: Whether you’re advertising in search engines, social media, video, podcast, or even print.
• PR Costs: Using a paid service to distribute your press releases? Include that in your marketing budget.
• Events/Trade-show costs:  These tend to eat up a lot of marketing resources, so plan accordingly.
• Swag: T-shirts, stickers, hats, etc. 
• Training: Does your company help employees level-up with relevant training courses? That could fall under your marketing budget, too.
• Gear: Cameras, microphones, lighting, and other equipment to help your team create multi-media content.

So how should you organize and prioritize these channels for your marketing budget? Here are 16 tips we gathered from our respondents on how to develop a marketing budget.

• Have an Attribution Model in Place to Measure Performance
• Consider Your Overall Marketing Goals
• Remember That Marketing Channels Interact
• Align With Your Sales Team
• Don’t Rule Anything Out
• Start Where Your Team’s Expertise Lies
• Choose Channels Based on Your Audience
• Allocate More to Efforts With Proven Results
• Don’t Be Afraid to Cut Your Losses
• Follow the 70/20/10 Rule
• Research How Competitors Invest Their Marketing Dollars
• Test What Works for Yourself
• Avoid Putting Your Eggs in One Basket
• Spend More on Customers Deeper Into the Funnel
• Don’t Overlook the Top of the Funnel
• Be Flexible and Adaptable

PRO TIP: How Are Users Engaging on My Site? Which Content Drives the Most Online Activity?

If you want to discover how visitors engage with your website, and which content drives the most engagement and conversions, there are several on-page events and metrics you can track from Google Analytics 4 that will get you started:

• Sessions by channel. Which channels are driving the most traffic to your website? 
• Average session duration. How long do visitors spend on your website on average? 
• Pageviews and pageviews by page . Which pages on your website are viewed the most? 
• Total number of users . How many users engaged with your website? 
• Engagement rate . Which percentage of your website visitors have interacted with a piece of content and spent a significant amount of time on the site?
• Sessions conversion rate . How many of your website visitors have completed the desired or expected action(s) and what percentage of them completed the goals you’ve set in Google Analytics 4?

And more…

Now you can benefit from the experience of our Google Analytics 4 experts, who have put together a plug-and-play Databox template showing the most important KPIs for monitoring visitor engagement on your website. It’s simple to implement and start using as a standalone dashboard or in marketing reports, and best of all, it’s free!

You can easily set it up in just a few clicks – no coding required.

To set up the dashboard, follow these 3 simple steps:

Step 1: Get the template 

Step 2: Connect your Google Analytics account with Databox. 

Step 3: Watch your dashboard populate in seconds.

1. Have an Attribution Model in Place to Measure Performance

“Unless you know which campaigns and efforts are generating actual revenue, you’re resourcing your business blindly,” said Martin Shirvington of Plus Your Business .

Many of the responses we heard centered around tracking performance and adjusting your allocation accordingly. But long before you spend a dime, you need to have systems and tools in place to measure that performance.

“Trying to determine where to spend money without knowing how each channel is performing is like playing darts blindfolded,” said Quincy Smith of Ampjar . “Define and set up tracking for your marketing channels, so you know where the best ROI lies— before dumping any money.”

Kelley Wrede of Revenue River pointed out that, until you test and measure marketing campaigns, you really have no idea what will work.

“You may not know how things are going to work out the first time you invest in them, but if you collect data and can attribute dollars spent with dollars earned for each channel, the allocation process will become much more intelligent and successful for your organization over time.”

Gazelle Interactive ’s Ryan Walker suggested using an analytics tool that employs the same attribution model across all of your marketing channels—so you get the most holistic view of the real value of each.

Shervington and team use HubSpot Pro because it connects marketing channels (like AdWords and Facebook Ads) and allows you to attribute “at the most granular level.”

Additionally, you can leverage a great tool like our marketing dashboard software to monitor, assess and report on your most important marketing KPIs and metrics.

Editor’s note: Want a more visual way to report and analyze how your marketing channels generate leads and turn them into customers? Download this free HubSpot Sources Report dashboard to view sessions, MQLs, SQLs, customers, and more—all broken down by source.

2. Consider Your Overall Marketing Goals

One of the big questions we wanted answers to was what drives marketing budget allocation? We asked the marketers we spoke with to share the most important factors that help them determine marketing budgets.

Around 40% of respondents told us that alignment with overall company goals was the single most important factor in driving their marketing budgets.

“With objectives and strategy written,” said Daleep Chhabria of Growth Forte , “you might, for example, narrow down to PR, website, SEO/content-writing, social media for amplification, promotions, and a few marketing technologies.”

“Are your goals reach-related or revenue-related?” John Donnachie of ClydeBank Media asked. “Are you trying to increase awareness for a new product or are you trying to increase sales for an existing product?”

Jonathan Aufray of Growth Hackers added, “Does your company want more visibility? Do you want more sales? Do you want more downloads? Once you know your company’s goals, you can put more marketing dollars on the channels that will help you move the needle.”

See also : 13 Tips for Setting (and Achieving) Your Marketing Goals

3. Remember That Marketing Channels Interact

One unique tip we heard was to avoid taking a zero-sum approach to marketing channels—because they all work together and affect one another.

Adding to Perreault’s comment, CodeCrew ’s Alexandra Marin explained, “Successful marketing is a fine combination of multiple factors.”

“If any of them is left behind,” Marin added, “the long-term resolve of your efforts may be disappointing—even if short-term results look good. ”

4. Align With Your Sales Team

Marketing budget allocation isn’t just about the marketing team. It requires input from throughout the organization, and that includes the sales team. Collaboration between the sales and marketing team is an excellent practice to strive towards—so G2 ’s Deirdre O’Donoghue told us you should define those goals together, before you worry about allocating spend.

5. Don’t Rule Anything Out

“It’s easy to make some assumptions and guesses about how certain channels will perform, but you won’t actually know until you experiment,” explained Corey Haines of Hey Marketers .

Vivek Kumar of Qlicket agreed, adding that “any good marketing team must first all of their options first, before executing on any tactics.”

Kumar says their team followed the process set forth in Traction , a book written by Gabriel Weinberg and Justin Mares. The book outlines nineteen “traction channels” for marketers to test, weighing the costs and benefits as they go.

“From there,” Kumar said, “we were able to draft a marketing plan with the security of knowing that we considered all of our options.”

6. Start Where Your Team’s Expertise Lies

We’ve heard tips about setting up attribution models and drawing allocation from your goals… but you always have to start somewhere. Chane Steiner of Crediful recommends that very first somewhere is wherever your in-house team has some level of expertise.

“Start with one marketing channel at a time, and begin with wherever you have in-house expertise,” Steiner said. “Of course, you can’t stop there. Expand one channel at a time, continuing to A/B test your way into a position that generates ROI. From there, you can experiment with optimizing your ROI.”

7. Choose Channels Based on Your Audience

John Donnachie of ClydeBank Media asked, “Where do your customers spend their time online? What channel makes the most sense to reach them?”

“Understand your customers and their buyer’s journey before allocating budget to marketing activities,” suggested Kyle Turk of Keynote Search. “Don’t waste your budget on marketing initiatives that don’t directly impact your core customer group. If your target audience isn’t on Instagram, for example, don’t allocate money to Instagram ads.”

8. Allocate More to Efforts With Proven Results

“After a few months to a year of promoting the business, you should check the ROI of each marketing medium using a marketing dashboard , and allocate your budget based on that number,” said Hassan Alnassir of Premium Joy .

Once your marketing program is rolling and set up to track performance across channels, allocation becomes as simple as doubling-down wherever you see positive results—and cutting your losses where you don’t.

Stacy Caprio of Conversiono recommends starting small, with budget spread relatively evenly across channels. “Once you have data that shows which channels are converting to paid customers in the most profitable way, you can start funneling more money into those channels.”

Hill Gaming Company ’s Casey Hill outlined the two-step process they use with clients:

• Identify which platforms work for the client’s audience and where there are initial indicators of engagement
• Test and iterate to refine the allocation

Hill also recommended the wider focus of ROI, similar to Cook’s sentiment around time and energy investments. “Focus on where you can consistently produce quality content because you enjoy it. If you hate writing, don’t do a written blog—try video, or interviews, podcasts, etc.”

Editor’s note: Want an easier way to see how marketing channels contribute to revenue? Download this free Google Analytics Product Revenue dashboard to view revenue across products, sources, and more.

9. Don’t Be Afraid to Cut Your Losses

Drawing from that data-backed approach to allocation, several marketers advised that you can’t be afraid to cut your losses. Don’t fall victim to the sunken cost fallacy—just because you’ve invested in a channel doesn’t mean you must (or should) keep pouring money into it.

“Don’t be afraid to move on from bad content,” warned Cristina Maria of Commusoft. “Many marketers seem to think that if they pour dollars into a channel that isn’t working well, it will magically transform it. Whether it’s Facebook Ads or paid Instagram Stories, you need to track ROI and cut your losses if it’s not working.”

“Don’t fall in love with a particular channel,” advised Robert Donnell of P5 Marketing. “We see too many clients that are enamored with SEO or Facebook—to the exclusion of other channels. We have to be objective about the allocation.”

In other words, kill your darlings and cut your losses.

10. Follow the 70/20/10 Rule

Wes Marsh of BCA Technologies told us they have a hard-and-fast guideline for marketing allocation:

“Put 70% of your budget into proven marketing channels that give you the best blend of quality leads at a low cost per lead, and then squeeze as much as you can out of it. Put 20% into other channels that still offer quality exposure and lead generation, even if there is less direct attribution (i.e. display, video, etc.). Finally, keep the remaining 10% of your budget available to explore new channels and for testing.”

Hey Marketers ’ Corey Haines also recommended leaving a portion of your budget available to experiment with new campaigns. “For every channel that you invest marketing dollars into, give yourself the ability to experiment with a portion of the budget. Even a small experimental budget,” Haines explained, “can go a long way in exploring new ways to use the channel, figuring out what works and what doesn’t, and exercising your creative muscles.”

11. Research How Competitors Invest Their Marketing Dollars

At some level, the right marketing channels for your business come down to your industry and business model. That means you can glean some value out of researching how your competitors allocate their marketing spend.

“I’d start by looking at several competitors to identify a trend in the pattern of their traffic sources,” Dresean Ryan of Dresean Consulting suggested. “Analyze some of the competitors in your industry with tools like SimilarWeb to see where they’re investing most of their advertising dollar—by looking at their traffic source, you’ll be able to tell where most of their budget is going.”

12. Test What Works for Yourself

“Test, reallocate budget, test some more, reallocate some more, and so on. Amplify your successes and don’t be put off if something doesn’t work at first,” recommended Oliver Roddy of Catalyst Marketing .

Corey Haines of Hey Marketers explained, “It’s easy to make some assumptions and guesses about how certain channels will perform, but you won’t actually know until you experiment.”

The marketers we heard from recommended starting with small budgets and testing to see what works. “Figure out what’s working and then turn up the dial accordingly,” said Zaahn Johnson of The Kingdom .

“Only through testing each channel will you be able to determine where to allocate larger percentages of your marketing budget,” said Alistair Dodds of Ever Increasing Circles . “When you find a channel that absolutely flies and is delivering high ROI, be prepared to scale up quickly.”

“Make sure that you invest in a channel where you can accurately measure the metrics of your return,” noted Software Path ’s Megan Meade. “That way you can identify the most profitable areas for future investment and scaling up with the data.

13. Avoid Putting Your Eggs in One Basket

While it’s important to direct your budget toward the most profitable marketing channels and activities, you should also be mindful of investing too much in just one channel. For example, if you spend 90% of your marketing budget on SEO and Google changes their algorithm… you’re out of luck and out of budget,

David Hoos of The Good suggests, “If you find wild success with one channel, that doesn’t mean you should abandon the others. You don’t want to have the success of your business riding on a single channel.”

It seems like the marketers we spoke to our following this best practice, too. We asked, on a scale of 1-10, which channels do you typically invest more dollars into?

While content marketing emerged as a clear leader, the answers were pretty evenly spread—with SEO and email marketing being just behind content, and Facebook and Google Ads in the top half, as well.

14. Spend More on Customers Deeper Into the Funnel

“My one piece of advice,” said Sara Bennett of PACE Staffing Network , “is to start further down the marketing/sales conversion funnel and work you way up as you can based on resources (money, time, etc.).”

“It’s imperative to understand what stage your customer is at in the sales funnel,” explained Lewis Kemp of Lightbulb Media .

“I have always seen my marketing efforts for where they are on the conversion funnel,” added Bennett. “That often correlates to how quickly you’ll receive a return on your investment.”

“I encourage marketers to invest in channels that are further down the conversion funnel (like lead generation, SEO, and Google Adwords) because there’s much less financial risk—and you’ll see ROI faster. Once these marketing channels are operating to a satisfactory level,” Bennett explained, “you can begin investing in channels higher in the funnel, until you work your way up to awareness and exploratory research.”

Kemp went on to echo Bennett’s advice about starting your investment deeper in the funnel, adding that marketers should “utilize cost effective channels (like paid social and email) higher up the funnel. Once the brand becomes more established, make the move to higher yielding and intent-based marketing channels (like Google and LinkedIn Ads).

15. Don’t Overlook the Top of the Funnel

I know we just talked about investing in the bottom of the funnel. And if you can only invest a little, that’s a good place to do it. But for marketers who have a little more wiggle room, it’s important not to overlook the top of the funnel.

As Brooks Manley of Engenius advised, “Don’t neglect investing in the top of your funnel. You won’t see the returns as quickly, but your sales funnel a year or two down the road will thank you.”

16. Be Flexible and Adaptable

“Marketing changes daily. What worked today might not work tomorrow, so you need to have the flexibility to move dollars around,” said Kyle Turk of Keynote Search.

“Shifting budget to high performing marketing channels and activities from low performing ones, requires you to be flexible and adaptable—and enables you to maximize ROI,” Turk explained.

“Evaluate what’s been done already. Reevaluate where your customer is spending their time Shift dollars there,” advised Maria Kiagias of Social Gold Group . “It sounds easy, but it’s hard for many businesses to let go of older marketing initiatives.”

Jacob Landis-Eigsti of Jacob LE Video Production told us adaptability is also a key component to being able to double-down on investment when you find something that really works.

“When you’re testing a strategy, you can keep spending low. But when you find a plan that works, keep putting money towards. I spent $400 a month while testing and ramped that up to $3,000 a month when I found a strategy that works.”

Allocate Your Marketing Budget for Better ROI

We heard a lot of tips from the marketers we spoke to, and they all boil down to a few key takeaways:

• Be open and objective to testing new and varied channels and campaigns
• Start small, based on any info you can get your hands on
• Spread your allocation across multiple channels and throughout the marketing funnel

By following those basic rules and adapting to the results you see, you’ll find the right allocation for your marketing budget—and maximize your ROI along the way.

Get practical strategies that drive consistent growth

Google My Business SEO: 8 Tips to Optimize Your Business for Local Searches

The 23 Best Keyword Tracking Tools (According to 107 SEOs)

23 Ways to Improve Your Landing Page Conversion Rates

Build your first dashboard in 5 minutes or less

Latest from our blog

• Playmaker Spotlight: Tory Ferrall, Director of Revenue Operations March 27, 2024
• New in Databox: Safeguard Your Data With Advanced Security Settings March 18, 2024
• Metrics & KPIs
• vs. Tableau
• vs. Looker Studio
• vs. Klipfolio
• vs. Power BI
• vs. Whatagraph
• vs. AgencyAnalytics
• Product & Engineering
• Inside Databox
• Terms of Service
• Privacy Policy
• Talent Resources
• We're Hiring!
• Help Center
• API Documentation

• Share on Twitter
• Share on LinkedIn
• Share on Facebook
• Share on Pinterest
• Share through Email

How to Create a Marketing Budget (+ Free Template)

A marketing budget is one of the most essential planning tools you can make for your business. I share how to create one plus a free marketing budget template you can download.

Why is a marketing budget so crucial?

The bottom line‌, or your return on investment (ROI). By allocating resources wisely and measuring the impact of your marketing efforts, you ensure every dollar spent contributes to the growth of your business.

Click here to download a free marketing budget template .

But beyond the financials, your marketing budget helps you prioritize marketing initiatives and identify areas for improvement.

In this article, I’ll guide you through the steps to create a comprehensive and usable budget. I’ll also share how to use the attached free marketing budget template to make the budget allocation process easier.

So, let's dive in and make every marketing dollar count!

What Does a Marketing Budget Cover?

The marketing budget covers how you intend to allocate your financial resources between marketing projects and channels over some time, typically a quarter or a year.

How much are you going to spend on each of your marketing activities? Why's your strategy going in this direction? The budget helps you ‌answer these questions by considering marketing ROI.

This allows you to:

• Achieve your marketing goals
• Use your resources strategically and efficiently
• Avoid overspending
• Get stakeholder and management buy-in

Specifically, the marketing budget plan covers all your marketing-related costs — from marketing software and ad spending to content creation, new hires, and contractors.

Creating a marketing budget involves mapping all your marketing initiatives and their budget allocation in line with the expected ROI. This is one of the trickiest parts of building a budget.

There’s no magic marketing formula to help you split your budget. It’s more about making strategic decisions based on past performance, current resources, and industry trends. And this is what I’ll aim to help you figure out.

How Much Should Your Marketing Budget Be?

You can determine your marketing budget based on industry benchmarks, historical performance, marketing goals, and business growth stages.

In general, many companies calculate their marketing budget as a percentage of revenue. The table below shows the  percentage of revenue  companies in different industries spend on their marketing budget.

Recent stats show that companies in 2023 are allocating 9.1% of total revenue to marketing activities on average (Gartner's CMO's Guide to Crafting a Marketing Budget ). It’s worth noting that this is a decrease from last year — companies in 2022 were allocating 9.5% of their revenue to the marketing budget. However, since 2016, the percentage has kept going down.

Another survey also shows that 42.3% of companies (The CMO Survey, 2022) are decreasing marketing spending. This might seem like an invitation to lower your budget in line with your competitors. However, before making such decisions, consider balancing your short-term gains with your long-term goals.

And if you are experiencing budget cuts, know that 75% of CMOs (Gartner's CMO's Guide to Crafting a Marketing Budget ) face the challenge of doing more with less. This requires looking at the budget with a more strategic and creative eye.

How to Create a Marketing Budget

Alright, now let’s get into the practical stuff.

1. Review Your Past Performance

Start by reviewing your past marketing performance in relation to the assigned budget.

Stay Up-to-date On All Things Marketing & Leadership.

• Your email *
• No spam, just quality content. Your inbox is safe with us. For more details, review our Privacy Policy . We're protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
• Comments This field is for validation purposes and should be left unchanged.

Lay out all your marketing costs.

Look at how much you spent the previous year on your marketing efforts. Was it more than you had planned? Less? Why?

Check all your common marketing cost categories. It helps to put a concrete value next to each category. Some common spending categories are:

• Marketing technologies, from your keyword research tool to your video editing software
• Advertising costs, including all digital advertising activities (i.e., Meta advertising and Google Ads) and traditional advertising campaigns
• Employee salaries and contractors, plus any freelancer help you might need
• Marketing training, such as team training, courses, and conferences

Once you group all your marketing expenses into different categories, write how much you’ve spent on each category in total.

Now that you know how much you’ve spent on different areas of marketing, you can evaluate the effectiveness of your spending.

• First, review the projected vs. the actual spending. Did you go over or under budget? Then, look at key metrics like ROI, conversion rates, customer acquisition costs (CACs), and revenue. How well did you hit the previous period’s objectives?

2. The numbers don’t tell you the whole story. Dig a bit deeper beyond numbers to look at  customer journey analytics . Ask the following questions:

• Which parts of the journey are you serving well? How are you achieving that?
• Which are your most successful initiatives? Identify the initiatives that are performing well alongside their ROI.
• Which journey areas need improvement or more attention?
• Which parts of the customer journey bring the highest return?

These questions will help you evaluate your budget effectiveness and performance from a more customer-centric perspective.

So, let’s say the influencer marketing campaigns you experimented with for the first time last quarter were highly successful and brought you a ton of awareness regarding website visitors and social media followers.

How does this increased awareness translate into actual revenue? You might discover that while influencer campaigns are helping you excel in the awareness stage of the buyer journey, which is not translating very well into sales.

This might mean that you might collaborate with the wrong influencers or might need to change your campaign messaging or targeting. On the contrary, it might show you that the increased awareness also translates into better sales. So you know to continue investing in that marketing channel and even improve your allocation this quarter.

The conclusions you draw from this step will help you move forward with the next one.

2. Establish Your Marketing Goals and Objectives

Everything you do should align with your business and marketing objectives. Is the business heading in a new direction or entering a new market? Are you launching a new product or going through a rebrand?

In which areas of the customer journey do you need to focus more to achieve your goals? Do you need to attract more leads, increase your conversion rate, or lower your CAC?

These are all factors you should consider when setting your budget. If you’ve built your marketing strategy, you might have already established your goals and objectives for the next period. So, simply revisit those.

One thing I’d recommend you do in this step is to set SMART goals. This means setting Specific, Measurable, Actionable, Relevant, and Time-bound goals. These goals make it easier to calculate your budget properly.

An example of a SMART goal could be to increase social media engagement by 20% in the next three months. With a SMART goal, your team can develop a well-defined plan to achieve it. This allows you to allocate the needed budget better.

3. Allocate Your Budget

Taking all the above into consideration, in this step, you’ll decide on your budget allocation.

You can allocate your budget in a few ways, such as across the customer journey, marketing channels, initiatives, or other common categories.

In this stage, you’ll need to make a few decisions, which I’ll walk you through below.

Across the customer journey

One way to split your budget is to look at it from the customer's viewpoint. Many companies decide to go this route. As we can see from the graphic below, companies spend around a quarter of the budget on each journey stage, with the awareness stage taking the lead.

This shows that CMOs allocate slightly more to awareness-stage initiatives — and slightly less to loyalty and advocacy programs. Also, in the middle of the funnel, the consideration and conversion stages take the biggest budget chunk.

Look at your own customer journey insights. Which stages are bringing the highest ROI, and which ones are underperforming? Are you introducing new initiatives or marketing campaigns in any of them? For instance, if you’re planning to invest in influencer collaborations in the next quarter to increase your brand awareness (SMART goal), it might make sense to allocate a bit more of the budget in that area.

Marketing channels, platforms, and campaigns

Another way to look at budget allocation is through your marketing channels, platforms, and campaigns. Consult your marketing planning software on this. Look at your marketing categories and put an estimated cost next to each activity.

The figure below shows how CMOs allocate their  digital marketing budget  this way.

Different forms of online advertising take the top spots on the chart, with the highest share of the budget.

Also, it’s worth taking a closer look at social media channels. And ask the same question we’ve been asking throughout this process: Which ones have the highest marketing ROI?

Regarding social channels, Instagram and Facebook are the top two platforms with the highest ROI (HubSpot's 2023 Social Media trend Report ).

Another way to look at it is through the famous 70-20-10 rule. The rule suggests dividing the marketing budget into three main categories:

• 70% on core marketing activities: well-established strategies and channels that show positive results, e.g., advertising on established channels, running email campaigns, and investing in search
• 20% on innovation and growth: trying new marketing initiatives and exploring innovative approaches; e.g., experimenting with emerging social media platforms, piloting new advertising formats or creative concepts
• 10% on experimentation: discover new opportunities by testing out new ideas

The percentages are, of course, a guideline. They can look different depending on your business. If your business is going through a rebranding and innovating phase, you can focus a more significant share of your budget on the innovation and growth bracket.

Tip: Don’t ignore your offline marketing efforts when calculating your budget. Consider the budget you’ll need for activities like trade shows and events.

Hiring and retaining the right people should be one of the key priorities of every marketing department. Labor costs account for 24.6% of the marketing budget in companies (Gartner's CMO's Guide to Crafting a Marketing Budget ). There's fierce competition out there to hire and retain talent.

Based on the laid-out marketing initiatives, see if you’ll need to hire new in-house talent or collaborate with freelancers or agencies. Don’t forget also to consider the cost of training.

Marketing technology will probably take up a considerable part of your budget. Big organizations can expect to spend around $5,000 per month (WebFX's Martech Pricing in 2024 ) on marketing tools and platforms.

However, 75% of CMOs (Gartner's State of Marketing Budget and Strategy in 2023 ) are facing pressure to cut their MarTech spend. If this also applies to you, then it’s an excellent opportunity to look at MarTech stack examples . You’ll want to build a stack that's effective and efficient. Sometimes, you can spot tools with overlapping functionalities.

Other costs

This category accounts for additional expenses that arise throughout marketing activities. It includes incidental costs, such as event sponsorships, market research, promotional materials, training and development, or unexpected expenditures that don't fit neatly into the predefined categories.

I suggest you keep a buffer for other marketing costs. This will allow you to be flexible and responsive and cater to unforeseen opportunities and challenges. How much the buffer will be depends on several factors. You will need to keep a bigger buffer if you’re operating in a rapidly changing industry or if you are more open to experimentation and risk-taking.

It’s also good to look at how much you’ve allocated to this category in previous years. Did the actual cost align with the projected cost? Adjust accordingly.

5. Implement Tracking Mechanisms

You set up your SMART marketing objectives in step two. Now, you need to ensure you bake in a marketing measurement process into your marketing activities.

You can rely on analytics tools like Google Analytics, social media insights, or email marketing platforms to analyze the performance of your  marketing campaigns . Use tracking links (UTM parameters) for marketing channels to monitor traffic sources and campaign effectiveness. These links can be easily generated using tools like Google's Campaign URL Builder.

For online campaigns, set up conversion tracking on your website to measure actions taken by visitors, such as form submissions, purchases, or sign-ups. If you run offline campaigns or have brick-and-mortar stores, consider assigning unique promo codes to different marketing initiatives. This way, you can track the number of redemptions from each campaign.

Keep track of your real spending vs. your projected spend. Use analytics tools to measure your performance and translate everything into numbers — ROI and your other KPIs. Keep track of historical data to identify trends, seasonality, or patterns in your marketing performance. This can help you make more informed decisions in the future.

Establish a routine for reviewing your marketing data and KPIs regularly. Regular budget check-ups will help keep you on track and focused on your goals. Moreover, this way, you can also adjust the budget when needed.

Common Pitfalls to Avoid When Creating Your Marketing Budget

When creating your marketing budget, it's essential to be mindful of common pitfalls that can hinder the success of your marketing efforts. Here are some pitfalls to avoid:

• Insufficient research and planning: Skipping the research phase can lead to inaccurate budget allocations and ineffective marketing strategies. Before finalizing your budget, understand your target audience, industry trends, and competitors.
• Overestimating returns: Avoid setting unrealistic expectations for the returns on your marketing investments. Be conservative and realistic when projecting outcomes to avoid disappointment.
• Underestimating costs: Be thorough in estimating the costs of your marketing activities. Account for all expenses, including creative production, advertising spend, tools, and personnel.
• Ignoring past performance data: Failing to analyze past marketing performance can lead to repeating ineffective strategies and wasting resources. Review historical data to identify what worked and what didn't.
• Focusing on short-term goals only: While short-term goals are important, don't neglect long-term marketing strategies that build brand loyalty and sustainable growth.
• Failure to track and measure results: Not implementing tracking mechanisms can make it difficult to gauge the effectiveness of your marketing budget.
• Lack of flexibility: Market conditions and consumer behaviors can change, so be prepared to adjust your marketing budget and strategies accordingly.

How to Use a Marketing Budget Template

A marketing budget template is a pre-designed document or spreadsheet that helps you plan, organize, and track your marketing expenses.

It serves as a structured framework to outline the marketing activities and associated costs for a specific period, typically a quarter or year.

With a template, you can maintain a consistent format and structure across different budgeting periods , making comparing and analyzing historical data easier. Yet, it allows you enough flexibility:

• To adapt and adjust as needed
• To modify your marketing budget in response to changing market conditions or new opportunities.

As you execute marketing campaigns, you can regularly update the budgeting template with actual expenses to compare against the planned budget.

Using a pre-designed template saves you time and effort; you don't have to create a budget from scratch. Using a pre-designed template allows you to skip the tedious process of formatting and structuring the budget.

The template provides a ready-made framework , allowing you to concentrate on setting marketing objectives, analyzing data, and making strategic decisions.

You can see the template as a planning tool that helps you think strategically regarding your budget. Remember that creating your budget is a process; it’s not simply about filling in the blanks.

There are different types of marketing budget templates out there.

• You can use master overview budget templates to have a high-level view of your budget or a more specific one.
• An activity-specific marketing budget template allows you to go into more detail about the costs of activities like a new product launch or website redesign.
• A channel-specific template breaks down the cost information of your different marketing channels.

You can find various marketing budget templates online or create one from scratch using spreadsheet software like Microsoft Excel or Google Sheets. Also, I've added a link to the free and customizable marketing budget template below.

Free Marketing Budget Template (Excel)

As promised, here’s a free marketing budget template you can copy, edit, and download. Use this template to organize your marketing budget data so it becomes accessible as a snapshot.

Access Your Free Marketing Budget Template Here

The template is comprised of two parts. In the first part, you can fill in your 70-20-10 budget split. Even if you don’t typically use this type of split, it’s a good exercise to force you into thinking about how innovative you’re being.

So, let’s say you have a total marketing budget of $250,000 to allocate. According to the 70-20-10 split, 70% of your budget, which is $175,000, goes to your core marketing activities, $50,000 into innovation & growth activities, and $25,000 into marketing experimentations.

If you don’t have this split already figured out, feel free to fill in this part last. Filling in the next part will help you with this one.

The 70-20-10 split is not set in stone. If you’re launching a new innovative product, it might make sense to put more money into innovation, growth, and experimentation efforts. So, in this case, it might look more like 50-30-20.

The second part of the template has a breakdown of common marketing cost categories. The categories in the template are marketing technologies, marketing research, training costs, advertising costs, and the budget that’ll go into salaries and paying freelancers. These are the big budget buckets; you can and should change the categories to fit your budget split.

The template is fully customizable. But let’s say you have a total marketing budget of $250,000. Here, you can track what percentage of your total budget you are allocating to each category and the actual money sum.

Use the template to organize your marketing budget. Customize it as needed. Above all, the template can also serve as a tool to help you with the budget allocation process.

At the end of the year, you can use the template to compare your allocated spend with the actual budget spend.

You can also use it to compare each year’s budgets.

Put Your Marketing Budget Into Practice

Now, it's time to put your newfound knowledge into action.

Leverage the power of the marketing budget templates provided in this article. These templates offer a convenient and structured approach to organizing your expenses, tracking your activities, and ensuring efficient allocation of resources. Customize them to align with your specific business goals and industry needs.

And remember, a well-crafted marketing budget isn't a static document but a dynamic tool that requires continuous monitoring and adaptation. As you execute your budget, maintain agility and flexibility. Regularly evaluate the performance of your marketing initiatives, measure their impact, and make data-driven adjustments as needed.

And if you want more insights like this, then go ahead and sign up for our newsletter for marketing leaders like yourself right away.

11 Marketing Campaign Types To Try (+ Examples And Tips)

Target account list: how to build your list in 5 steps, how to build a personalization strategy (+ tactics & tools), programmatic abm: what it is and how to use it.

• Search Search Please fill out this field.
• Marketing Essentials

Advertising Budget: Definition, Ways To Set a Budget, and Goals

What Is Advertising Budget?

An advertising budget is an estimate of a company's promotional expenditures over a certain time period. More importantly, it is the money a company is willing to set aside to accomplish its marketing objectives.

Key Takeaways

• An advertising budget is the amount of money set aside for purposes of marketing and advertisements.
• The cost of advertising dollars must be weighed against the potential recognized revenues that those dollars will generate.
• Demographic research and customer segmentation can create profiles to help optimize the returns to advertising spending.

Understanding Advertising Budget

An advertising budget is part of a company's overall sales or marketing budget that can be viewed as an investment in a company's growth. The best advertising budgets—and campaigns—focus on customers' needs and problems and on providing solutions to these issues, not company problems such as an overstock reduction.

When creating an advertising budget, a company must weigh the value of spending an advertising dollar against the value of that dollar as recognized revenue . Before deciding on a specific amount, companies should make certain determinations to ensure that the advertising budget is in line with their promotional and marketing goals:

• The target consumer — Knowing the consumer and having their demographic profile can help guide advertising spend.
• Best media type for the target consumer — Mobile or internet advertising, via social media, may be the answer, although traditional media, such as print, television, and radio may be best for a given product, market, or target consumer.
• Right approach for the target consumer — Depending on the product or service, consider if appealing to the consumer's emotions or intelligence is a suitable strategy.
• Expected profit from each dollar of advertising spending — This may be the most important question to answer, as well as the most difficult.

The best advertising budgets—and campaigns—focus on customers' needs and solving their problems, not company problems such as an overstock reduction.

Advertising Budget Levels

Companies can determine their advertising budget levels in several different ways, each of which has its positives and negatives:

• Spend as much as possible — This strategy, which sets aside just enough money to fund operations, is popular with startups that see a positive return on investment on their advertising spend. The key is anticipating when the strategy will start showing diminishing returns and knowing when to switch strategies.
• Allocate a percentage of sales — This is as simple as allocating a specific percentage based on the previous year's total gross sales or average sales. It is common for a business to spend 2% to 5% of annual revenues on advertising. This strategy is simple and safe but is based on past performance and may not be the most flexible choice for a changing marketplace. It also assumes that sales are directly linked to advertising.
• Spend what the competition spends — This is as simple as adhering to the industry average for advertising costs . Of course, no market is exactly the same and such a strategy may not be sufficiently flexible.
• Budget based on goals and tasks — This strategy, wherein you determine the objectives and the resources needed to achieve them, has pros and cons. On the upside, this can be the most targeted method of budgeting and the most effective. On the downside, it can be expensive and risky.

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices

12 Free Marketing Budget Templates

By Joe Weller | June 15, 2016

• Share on Facebook
• Share on LinkedIn

Link copied

A budget is a crucial part of any marketing plan. It gives a clear overview of all the costs associated with carrying out your marketing activities, including advertising, online content, branding, public relations, staffing costs and more. Creating a marketing budget can help you stick to your plan and avoid unanticipated costs, reducing the possibility of overspending. Since a marketing budget reduces risk and provides a financial road map, it’s a useful tool for both large and small businesses. It also allows you to determine the return on investment for different aspects of your marketing plan.

Accurately estimating expenses is vital for the success of your marketing goals, but you can measure your success by comparing actual expenditures against your projected costs. Your marketing budget then becomes an important reference for adjusting your plan over time as well as for creating future plans.

As you create your marketing budget, there are some clear advantages to using a template: prepared formatting and formulas, customizable features, organization and efficiency. All of the templates below are in Microsoft Excel format and are free to download. You’ll find comprehensive marketing budget templates for creating a detailed plan, with monthly, quarterly and annual views, as well as budget templates for specific marketing campaigns such as social media, website design, event planning and product marketing.

We've also provided marketing budget templates in Smartsheet, a real-time work execution platform that makes marketing budget tracking easier and more collaborative than Excel.

Marketing Budget Plan

Download Marketing Budget Plan Template

Excel | Smartsheet

This marketing budget plan template shows itemized categories, an estimated cost for each item, subtotals for each category, and a grand total. The simple layout is easy to read, and there is room for additional notes beside each category. This template is designed to let you organize all of your expenses into a single budget plan. Use it for annual planning or a marketing campaign of any length.

Annual Marketing Budget

Download Annual Marketing Budget Template

This annual marketing budget template offers a simple layout with columns for monthly, quarterly and yearly costs. The template includes categories for market research, branding, public relations, lead generation, digital marketing, events, sales support and travel. Organize your annual marketing plan while tracking monthly expenses. This template can be as detailed as needed depending on the scope of your marketing campaigns.

Simple Marketing Budget

Download Simple Marketing Budget Template

This simple marketing budget template shows projected and annual costs for multiple categories side by side. You can assign costs for each week of the month and track total expenses by month, quarter and year. This makes it easy to compare projected costs against your actual spend, and the template also calculates the difference. Choose whichever  categories work best for your business and marketing plan, and then enter your financial data.

Digital Marketing Budget

Download Digital Marketing Budget Template

Focus on your digital marketing budget with this free template. It covers various categories related to digital marketing, including website development and ongoing optimization, web analytics, paid advertising, SEO, social media and email marketing. Itemized expenses are totalled monthly and yearly. This template allows you to break down your digital marketing campaigns into a single strategic budget plan.

Social Media Marketing Budget

Download Social Media Marketing Budget Template

Use this free budget template to keep track of all your social media marketing expenses, from staffing and agency costs to content creation and promotions. Once you’ve entered your expenses, you can plan your monthly projections and track your remaining budget. You can easily weigh your year-to-date spend against your total budget and see what percentage of your  marketing budget is allocated to which social media marketing efforts.

Event Budget

Download Event Budget Template

Event costs may include advertising, venue rental, food and beverages, travel costs for speakers, decorations and more. Use this event budget template to plan all of your projected costs and track your actual expenditures. This template offers a wide range of categories, but you can easily edit them to be more relevant to your specific event.

Quarterly Marketing Budget

Download Quarterly Marketing Budget Template

If you want a template that shows only your quarterly marketing budget, this is a simple, one-worksheet version. Marketing categories are listed on the left, and quarterly tallies are on the right. Keep track of your itemized and total expenses for each quarter.

Channel Marketing Budget

‌ Download Channel Marketing Budget Template

This channel marketing budget template focuses on the expenses associated with marketing to four key  channels: brokers, distributors, retailers and customers. It also has sections for personnel costs, direct marketing, other expenses and projected sales. The template shows monthly and annual totals for each category.

Product Marketing Budget

‌ Download Product Marketing Budget Template

If your business sells products, research, focus groups and user testing help ensure that your marketing tactics and messaging are effective. This product marketing budget template includes categories for each phase of marketing as you move toward a product launch. Proper planning and research will help ensure a successful outcome, potentially saving you money in the long run.

Content Marketing Budget

‌ Download Content Marketing Budget Template

Depending on the scope of your content marketing, your budget may include expenses for freelancers, stock images, publishing tools, video hosting, analytics and more. This budget template covers multiple aspects of content marketing, calculating monthly, quarterly and yearly costs. Creating quality content that serves your marketing goals takes time and money, so plan your budget carefully to make sure all your bases are covered.

Website Budget

Download Website Budget Template

From brand messaging to reaching customers, a website is an essential tool for business success. If you’re developing a new website or redesigning an old one, creating a budget can help you plan for the initial investment as well as ongoing costs. This website budget template provides a section for monetary benefits, so you can contrast those amounts with your costs. Amounts are totalled annually, and you can view projected changes over three years.

Public Relations Budget

‌ Download Public Relations Budget Template

This may be the age of digital marketing, but traditional PR is still important to any marketing strategy. Manage all of your PR costs - from agency fees and trade show costs to research and reputation monitoring software - with this public relations budget template. Use the template as is, or customize it to reflect your own marketing categories. The template is organized so that your monthly projected and actual totals are shown side by side.

How to Plan Your Marketing Budget

Once you have determined your marketing plan and total annual budget, it’s time to align your budget with your marketing goals. What goals are you trying to achieve? This is the most important thing to keep in mind as you prioritize your expenses. We’ve already mentioned some of the categories that may be included in your marketing budget, from digital marketing to personnel costs. These categories are chosen based on your marketing campaigns and tactical plans for reaching your goals. Assign a budget amount to each category, and be thorough. You don’t want to miss hidden costs and then have to make up for it later. For instance, if you are marketing a product, you can’t simply plan your budget around promotional costs. You also need to consider the costs of any competitive analysis and consumer testing that might be required to ensure that your product launch and marketing efforts are successful. 

Keep in mind that expenses will vary from month to month. If you are over budget in a category during one month, look at your annual budget plan to see if this balances out later - perhaps because the category is no longer needed at a later date - or if you need to reduce costs in a lower priority area. Creating a detailed and realistic plan will help you stay on budget and on task for achieving your long-term goals.

Frequently Asked Questions

What Is a Marketing Budget Plan?

A marketing budget plan is a detailed roadmap that outlines the cost of all marketing strategies and tactics involved in hitting the projected results.

This plan provides visibility into both the specific goals of the marketing team and how much it will cost to achieve those goals. Considered a critical resource that can be leveraged by the entire company, a marketing budget plan gives insight into how marketing campaigns are run within the organization.

How Do You Create a Marketing Budget?

To create a succinct marketing budget for your business, first determine both your annual marketing goals and your positioning in the marketplace. Outline all projected plans you have for your product or services on an annual basis.

After these details have been analyzed, develop a marketing budget that allots a specific amount of money towards marketing campaigns and goals. Revisit the plan and budget on a regular basis to update the details as your business goals change.

How Much Should You Spend on a Marketing Budget?

On average, it is reported that companies should spend around 5% of their total revenue on marketing efforts in order to maintain their current position in the marketplace, according to FrogDog.

Companies that are looking to grow or expand their market share should allot a larger percentage of their overall budget towards marketing campaigns, landing around 10% of total revenue, according to FrogDog.

Improve Marketing Budget and Campaign Planning with Smartsheet for Marketing

The best marketing teams know the importance of effective campaign management, consistent creative operations, and powerful event logistics -- and Smartsheet helps you deliver on all three so you can be more effective and achieve more. 

The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed.

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time. Try Smartsheet for free, today.

Additional Resources

Marketing management

Getting started with digital marketing plan templates, examples, and a guide

Develop a strategic marketing plan perfect for your company's needs and demands with customizable templates made for a variety of industries.

Apr 17, 2023

Free Marketing Calendar Templates in Google, Excel, and Word Formats

Organize your social media, blogging, editorial calendars, and more with these free Excel templates.

Mar 29, 2024 11 min read

Improve your marketing efforts and deliver best-in-class campaigns.