When piecing together your marketing plan it can be easy to get lost planning all the great campaigns and tactics you want to implement and lose sight of the required budget you’ll need to implement your plan. It’s really important to be thinking about your marketing budget before and during the entire marketing plan development process to ensure that the plan is realistic and achievable. When planning budget’s too many companies end up adopting a ‘peanut butter’ approach – spreading budget across across all tactics evenly without any strategy.
This chapter hopes to share a few tips on how to structure, allocate, and manage your marketing budget that ensures your marketing plan will be effective and your objectives achievable.
Fiscal Year Allocation
All businesses and organizations that undergo any formal planning process for their business will undoubtedly have budget history. Each year when planning the new fiscal year for the business, the individual or team involved in the planning will without doubt set aside a specific budget for marketing and advertising during this process.
This is the discretionary marketing budget that you will have to work with for the year. Generally once this figure is planned it is hard to solicit your manager or your client for spend outside of this. This constitutes the development and execution fund for all campaigns plus everything else considered an expense item, including outside services.
If you are involved in the planning process, then ensure that this number makes sense according to last years numbers and the size and objectives of your organization. If not, be sure to come back to your manager with data that supports your perspective.
How do you know what tactics to spend budget on and then deciding how much of your budget to invest can be challenging, especially if you aren’t working with any type of baseline.
Good marketers and marketing managers always want to balance between spending on the tried and tested tactics, while ensuring they are exploring and investing in new innovative tactics as well.
Metric uses the 70/20/10 rule as a starting point when deciding what tactics to allocate marketing budget to. For those who have are not familiar with this rule, This rule dictates that 70 percent of the budget be allocated to “tried and true” channels, 20% allocated to “safe bets” (newer channels that seem promising, even if they haven’t proven themselves just yet), and 10% allocated to “experimental” (cutting edge, unique opportunities which might provide a big payoff).