Creating a marketing budget isn't solely about determining how much you want to allot for marketing. In order to create an effective marketing budget, begin by determining your desired end results. When you create a marketing budget with your goals in mind, you have a great chance of seeing a more substantial return on your investment. Here are five factors to consider when creating your marketing budget.
Your Target Audience
Start with your target audience in mind. As you decide how to set your marketing budget, it’s important to have a clear understanding of your target audience and their needs.
What are their needs? When you understand the needs of your target audience, you can deliver the type of content they're looking for. Consider how you can serve them best and fulfill their needs as you create your marketing plan.
What platforms and channels are they on most? Determine where you can find your target audience. For example, your target audience may watch television primarily during prime hours. This can require an increase in your marketing budget to accommodate those spots. When you know exactly where your audience can be found, you are able to create a marketing budget that allows you to reach them where they’re at.
Another important factor to consider is whether you are targeting repeat or new customers. You may need less ad spend to bring a repeat customer's attention back to your business. Having a clear understanding of your target audience--who they are, where they are, and what they need--will help you allocate a proper budget.
Another important factor when creating a marketing budget is to consider what you hope to achieve through your marketing efforts. Your goal might be to increase sales, or it might be to increase your website traffic. You may also have unique marketing goals related to how you want to position your business or what you want to accomplish within your community.
Set goals that are specific, measurable, attainable, realistic, and time-oriented (SMART) to help determine the necessary steps you need to take to achieve them, including the way you structure your budget. Your desired end results will help you to adjust your marketing budget accordingly.
Past Marketing Budgets and Results
Before setting your new marketing budget, consider past marketing budgets and the results you saw with them. Carefully analyze where you allocated your ad spend. Did you invest enough in the right areas? Did you spend too much in an area which didn’t produce the results you were hoping?
Consider what elements of your past marketing campaigns produced results and how it impacted your business. You may want to invest more in a medium that reaches a larger demographic. While certain media may reach different audiences at different capacities, an integrated marketing approach will help to produce greater results and the value of your ad spend.
What Mediums You Want to Advertise On
Having a clear understanding of your target audience and where to find them will help you decide what mediums you should incorporate into your marketing strategy. Different mediums have different costs, and this should be considered when creating your marketing budget.
Consider the channels, programs, and times you want to run your TV ads. All of those elements can influence how you structure your marketing budget. Social media, digital ads, and email marketing can also help you achieve your marketing goals while sticking to your budget.
How Long/Often You Want to Advertise For
Ideally, you want to maintain advertising efforts to keep up the momentum. The object of your campaign will determine how long you advertise. Whether you’re running a branding campaign or promoting a specific sale or event, how long you advertise for, and how often should be a factor that is considered when creating your marketing budget.
In order to build an effective marketing budget, you need to know what you want to accomplish with your efforts. Consider who you want to reach, how you want to reach them, and how often you want to get in front of your target audience. Be SMART when setting your goals and analyze past spending and results to see where adjustments may need to be made. When you take these 5 factors into account, you will be able to create a marketing budget that drives results and ROI.