Having a well-planned marketing budget can help you allocate resources to the right digital marketing channels and maximise the effectiveness of your campaigns.
But where do you begin when it comes to managing and tracking your budgets?
Businesses spend between 2% and 5% of their revenue on marketing to promote their products and services. That might not sound like much, but bear in mind that it’s vital to use your working capital wisely. So, whatever the size of your marketing spend, you want to make sure that every penny is successfully helping to raise awareness of your brand and your products.
When it comes to marketing spend, you and your executive team will want to see real-world results from your marketing – and tangible evidence of that elusive ROI.
To get in control of your marketing budget:
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- Decide which marketing channels will be most effective – Whether you’re considering video, social media, blogging, events or above-the-line advertising, think about which channels are likely to deliver the best results. Do your research, talk to your customers and use the channels where your audience are most likely to engage with you.
- Understand your marketing spend across different channels – each channel in your marketing strategy has to deliver. But how much cash should you invest in each channel? Talk to other marketers in your sector, look at industry benchmarking and get a ballpark figure for a ballpark spend on each channel. By adding up the costs for each channel, you get a total figure for your overall marketing spend. Make sure this doesn’t overrun the planned percentage of your revenue that’s set aside for marketing.
- Calculate how much revenue and profit you’re likely to generate – you can never predict the exact outcome of your marketing activity. But you can set revenue targets for each channel, and set clear goals for both the financial and non-financial ROI you’re likely to achieve. For example, how many customers will each channel bring in? How will this impact on cashflow? What’s the desired impact on your revenue and profits?
- Track your marketing spend in your cloud accounting – the latest cloud accounting platforms make it very easy to record and track your marketing costs. Track your marketing spend by channel, product or cost code to give yourself a detailed breakdown of all your spending. This gives you the data needed to track performance over time, so you’re in complete control of the money you’re spending.
- Manage your data and make informed decisions – if you combine the data and reporting from your cloud accounting and your marketing software, this gives you the best possible management information relating to your marketing. In turn, this gives you the information you need to make informed decisions on your marketing. Ask yourself:
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- Where are you spending the most money on marketing?
- Which channel is converting the greatest number of targets?
- How much of your marketing budget have you spent – and what remains?
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By finding the answers to these questions, you make it much easier to make sensible decision on how to improve your ROI and how to boost your overriding digital presence as a business.
Talk to us about tracking your marketing spending
If you want to drill down deeper into your marketing spending (and the ROI this money is delivering), please do book some time to talk to us.
We’ll help you set up new cost codes in your accounts software and refine your marketing budgets per channel. We’ll also work with you to customise your dashboard and management information, so you have all the financial and non-financial data you need at your fingertips.
The following content was originally published by BOMA. We have updated some of this article for our readers.