The ultimate guide to marketing budgets 2022.

For many businesses, it can seem like there isn’t enough budget to go around. However, to attract new customers, marketing plays a crucial part in all businesses.

Unfortunately, there is a catch. Many small business owners struggle don’t know what a marketing budget is, or how much should be spent on one. This can lead to both time and money being wasted.

By using a trial and error approach, you’ll see it become expensive and ineffective. Meanwhile, those who take the time to create a successful marketing budget will see the rewards.

But what is a marketing budget? Why are they so important? How can I plan one for 2022?

Well, these questions are asked often by companies across the world, so, we decided to create this article. So, let’s take a look.

What Is A Marketing Budget?

A marketing budget will track and document what your business intends to spend on marketing for a set period. This could be a month, quarter or year. All costs will be considered, such as hiring, advertisements, tools and everything else included.

Why Is A Marketing Budget Important?

Marketing budgets are used by companies in all industries. But why are they so important? To have marketing success, they are an essential tool to save time and money. Below are some reasons why they are a must for your business.

Setting targets	Using realistic and well-defined goals will move your business in the right direction. Plotting this project against your budget will provide realistic expectations and highlight areas to improve.
Financial tracking	Having a budget allows you to track how much you’re spending on different parts of the strategy, showing areas of overspending and places you can afford to spend more. Without a budget, you’ll likely be overspending without realising.
Allocate funds correctly	Planning on where different marketing funds go is crucial. You want to make sure that the money is being used in the right place, determining which strategies work and if new packages fall within your plans.
Long term planning	Being able to look ahead to the future will prevent you from searching for extra marketing spending which could prevent campaigns from going through due to funding changes. Flexibility is recommended, but a long term plan creates a more consistent and effective marketing strategy.

What Expenses Does A Marketing Budget Usually Cover?

When factoring in what to add into your marketing budget, you want to ensure you have the basics covered. However, it is important to leave some room for creativity and experimentation. Some of the most common areas that marketing teams usually invest in include:

Events – including trade shows and conferences
Freelancers and agencies – including PR, content and design
Paid campaigns – including social media ads, newsletters and emails
Research – including focus groups, market research and surveys
Tools – including software and infrastructure

How To Plan A Marketing Budget For 2022

So, we’ve covered the basics so that you know what a marketing budget is, why they’re important and what to put in them. Now it is time to learn how to prepare one and set up your plan for 2022. We’ll break it down into six simple steps.

1. Establishing your sales funnel

First up is setting up your sales cycle. This is an essential part of your marketing budget as it establishes where exactly the money will be spent. Before your audience becomes a paying customer, they will go through your sales funnel. This will happen in four steps:

Awareness – your target audience realised they have a problem and begin to search for solutions.
Consideration – this is where they start to find different available options to fix their problem.
Decision – they have now got a few ideas and begun to narrow their focus on the company providing the best solution.
Action – a decision is going to be made and your business has been chosen by your new customer.

Your sales funnel helps to recognise where a digital marketing strategy is to stop potential customers from escaping the cycle. Many people may see your company in the consideration stage, however, few decide to use your business.

This gives you an insight into strategies you can take to get leads from certain stages. You need to understand your sales cycle to budget wisely.

2. Understand your external costs

Next is establishing your outside costs and how much your business is spending in every area. This will provide an outline of how much can be allocated to marketing. So, which external costs do you need to think about?

Employee costs
Running costs
Operational costs
Any other costs

It is essential to consider these costs when establishing your marketing budget. This will set a baseline for your return on investment and show which services you can invest in.

3. Determining your business’s goals

Sounds obvious, but you know how crucial it is to establish your goals. This applies to your marketing budget too because it will set you up for achieving these targets. This could be:

Specific sales goals
Earning more leads
A rise in your social media following
More collaborations

By setting these goals, you have precise targets to work towards and achieve. Rather than generic targets like ‘more sales’, you have measurable and concrete reference points when budgeting for marketing. This sets a timeline for your achievements and predicts when you’ll need to increase marketing budgets.

4. Embrace your market

When building an effective marketing budget plan, you need to know how your business is placed in the market. Think about how you compare with your competitors and what you need to do so that you can compete with them.

This can consist of competitor analysis where you view how your competition is performing online. There are tools to utilise that can break down your competitors and easily pick out areas to improve.

5. Think about your plan of action

Choosing your strategy is the next step for preparing your marketing budget. This doesn’t need to be set in stone, as it will likely need to be flexible, however, having a rough idea can be a good start for your company. Let’s take a look at some common marketing strategies.

Email marketing	Sending emails to customers that have tailored information will help to nurture leads towards conversion. This could be exclusive deals, special discounts, promotional emails, abandoned cart reminders, and more.
Social media marketing	Social media marketing allows your company to connect one on one with your target audience and engage with relevant content. This is a great way to build strong relationships with your leads and then nurture them into becoming customers.
Search engine optimization (SEO)	SEO is the process of boosting your website’s rankings on search engines to help increase more organic traffic to your site.
Social media advertising	This is where you’ll focus on building and creating ad copy to generate new customers for your brand. You’ll see them seamlessly blend on the newsfeed of your audience and help to forge brand recognition.
Content marketing	Content marketing shares valuable information with your audience helping to increase the number of leads heading towards your page. By sharing your knowledge, you establish your brand as a leader in the industry, earning trust from your audience.
Local SEO	Local SEO focuses on optimising local keywords to help drive more local traffic to your business by claiming higher rankings on your Google Business Profile listing.
PPC advertising	PPC ads are paid advertisements that you’ll usually see at the top of search engine pages when looking for a site. They’re used to reach more leads.

So, having an idea of the strategies you want to use can be extremely beneficial when building your budget. By knowing which ones you’ll be investing in, you can then set fixed funds for each one, as well as how they all fit within the price plan.

6. Researching strategy prices

No matter what you’re going to do with your marketing, you need to know how much it will cost. You could be running the campaign by yourself, utilising a marketing company or hiring a freelancer, it all will need to be added to the plan.

So, when you begin to plan, start with who is handling the campaign.

Digital marketing company	Hiring a digital marketing company will cover everything, from the staff to the tools, leaving you with less to worry about. Usually, you’ll pay per month unless this is a one-off project.
Freelancer	Freelancers are a great way to get your campaign done without using a marketing company. You’ll also only have to pay by the hour or on a per-project basis for most freelancers. However, prices may be higher for those who are more experienced.
In-house	For those deciding to use the in-house team, the main costs will come from the materials you use and how much you pay in salaries. Remember, if you need to reach out for outside help, invest in further tools to help manage your campaigns

If you’re busy running a business and want to give the reins of your marketing over to someone else, then consider hiring a freelancer or using a digital marketing company. This frees up more time for you to think about other aspects of your business, leaving this task to someone passionate and experienced.