The Importance of a Marketing Budget

Common Marketing Budget Mistakes to Avoid

Over-Experimenting on the Budget

Since businesses need stability to ensure consistent growth, it is imperative to settle for marketing campaigns that are proven to work over the long term. More funds must be allocated for these targeted campaigns to maximize ROI. A common marketing budget pitfall to avoid is to invest in various campaigns that have no history of delivering solid results.

Failure to Diversify

Over-experimenting is bad. In the same way, playing it too safe is also counter-productive. By refusing to explore new channels, you wouldn’t know if the results would be great for your ROI. Who knows if these unexplored marketing campaigns can perform better than your proven channels? You might therefore miss a golden chance to expand your portfolio.

But how much do you spend on unproven channels? A safe bet would be to allot no more than 20% of your total marketing budget for new channels, depending on your risk tolerance, total marketing budget, and your growth strategy.

Using Bad or Misleading Data

Marketing budget allocation decisions must be made based on reliable and repeatable data. Intuition may be a good strategy in a few instances, but when a business's fate is at stake, data is a better tool. CRM software can help marketers get reliable data. However, only 33% of marketers trust the information retrieved using this software.

Businesses are correct in relying on data, but make the mistake of using the wrong data. By improving data quality, you will be able to make better advertising decisions. Regular cleaning eliminates duplicates and inaccuracies, making data more reliable.

Refusal to Re-Evaluate Marketing Strategy

A marketing plan must be finalized before allocating a marketing budget. However, marketing campaigns may change based on market responses, economic changes, and business strategies. Therefore, marketing plans need to be flexible - and a marketing budget needs to allow for some wiggle room to allow for changes as technology changes.

If your marketing strategy is not updated at regular intervals, you will be left behind both by your competitors and customers. A balance must be struck that promotes reevaluation at regular intervals.

Failure to Communicate with the Sales

Marketing is done mainly to bolster sales. However, you won’t have a good grasp of the volume of sales it helps generate without communicating with the concerned department - Sales.

People responsible for the marketing campaigns need to get feedback to know which ones are working, and which ones need improvement or help to perform better. Thus, marketers need to communicate with sales in real time to allow them to make quick adjustments early in the campaign cycle.

Guidelines to Help Determine the Marketing Budget

When setting a marketing budget, there are a few guidelines to keep in mind that will help keep you on the right track. These include the following:

Consider developing or refining your brand first.

Your image should be up to par. Do you have a professional logo, a website, and marketing materials that represent you as a credible company? Are they consistent? What needs to be changed or improved? By addressing these questions, you can improve your brand image.

For your brand to reach your target audience, what are the ongoing expenses for advertising to maintain and promote your brand?

In other words, a small business that doesn't advertise will be forgotten, regardless of how well they perform in other business aspects. A company that doesn't maintain its website and materials will, over time, lose credibility and rankings with search engines. How do you plan on staying visible? You must have a solid plan to achieve it.

An advertising budget is a line item within your marketing budget.

In marketing, all services are included, including consulting, graphic design, video production, trade show materials, printing, and trade show displays. Your advertising budget represents the actual expenditures for buying media (Google Ads, Facebook Ads, Magazine Ads, Digital Ads, Billboards, TV Commercials, etc.).

When you come to an agency for consultation, a standard recommendation you’d get is to allocate 1/3 of your budget to advertising and the remaining 2/3 to marketing services - depending on your marketing strategy and your desired ROI.

Marketing is integral to the growth and profitability of your small business. Many businesses - whether big or small - fail simply because they do not allocate enough funds for their advertising and marketing budget. When done well, marketing pays back handsomely.

At Main Social Media, we can help show you the value of an effective marketing budget, as well as how to properly implement a sound marketing strategy for your small business. Contact us and find out how we can help.