How to Plan a Marketing Budget in 8 Steps

As 2022 comes to a close, it’s important to set new goals for your business in 2023. A strong marketing campaign is essential whether you want to get more clicks on your website, draw more customers into your boutique, or bring new patrons to your restaurant.

You’ll need a marketing budget to ensure your advertising strategies help you achieve the highest possible return on investment, or ROI, in 2023. Do your research. Search for traditional techniques like: “how much do billboards cost” and  “average cost of hiring a digital marketing agency” to estimate how much you’ll need to set aside for marketing purposes.

Prepare to sit down with your sales team and investors using these eight steps to plan your marketing budget for 2023.

Understand Your Sales Funnel

Sales funnels describe the customer’s journey with your brand and are made up of 5 stages.

  1. Awareness: potential customers are introduced to your brand
  2. Interest: customers consider your brand as a solution to a problem
  3. Desire: now the customer is actively seeking your product and comparing it with other options
  4. Action: the customer makes a purchase
  5. Loyalty: the customer becomes a repeat buyer

Familiarity with your sales funnel will help you determine which area will best benefit from increased investment in advertising. Where is your current strategy lacking? Use the data accumulated over the year to decide which stage to focus on.

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Maybe you’ve been around for a while but are struggling with bringing customers back for a repeat buy. Try investing in an email marketing campaign to stay on customers’ minds. New brands may want to consider top-of-funnel strategies like billboards and SEO campaigns to bring awareness to their products or services.

Set Specific Goals

Once you’ve chosen which area of the sales funnel to focus your marketing strategy, you need to get as specific as possible about your goals. You know you want to increase sales or build brand awareness – but these goals are clear enough to allow you to track the success of your marketing campaign.

Set a clear and measurable goal. For example, “increase sales by 15% by the end of 2023” will give you a target you can strive to hit by December next year. You’ll have a key performance indicator or KPI you can refer to once you launch the campaign to track its effectiveness.

Refer to Your Operational Costs

You don’t want to spend more on an advertising campaign than you have. Evaluate your operational costs and your returns from the previous years. Consider how much you spend on non-negotiables to keep your business running: staff, freelancers, office rent, production and shipping costs, and more.

After you’ve put money towards the non-negotiables, use what you have left to establish a marketing budget you can stick to: How much can you invest in marketing while still making a profit?

Know Your Target Audience

You’ll need to know your target audience to build an effective advertising campaign. What problems do your goods or services offer solutions to? Are you attempting to reach a specific demographic?

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Billboards can help you reach potential customers from multiple demographics in one geographic location. Utilize analytics from social media ads on Facebook and Instagram to determine who clicks on your ads and engages with your brand.

Choose Marketing Strategies

Now that you know how much money to spend, have specific goals, and have established a target audience, you can decide which marketing strategies will bring the highest ROI. Consider traditional marketing strategies like billboards, TV and radio commercials, and print ads.

Include digital marketing strategies in your plan, like SEO optimization, social media, and email marketing. Also, consider hitting up trade shows to meet potential new customers. Compare and contrast different strategies to find the right combination for your business.

Compare to Competitors

Don’t choose a marketing strategy blindly. Look at what your competitors are doing and find a way to do it even better. Use competitor analysis tools to keep tabs on your competitors’ methods and get ideas for your campaigns. Track how customers interact with their brand compared to yours. Invest in strategies that will help you rise above the competition and make you the obvious choice to customers.

Estimate Cost of Marketing Campaigns

Create a cost sheet to estimate the cost of advertisements and decide which investments to prioritize in your budget. Use data from previous marketing campaigns and tools like Hubspot to find cost averages of popular marketing trends.

Make sure to include all costs associated with an ad campaign in your estimate. Will you need to hire additional staff or freelancers? How much do billboards cost monthly? You’ll need to consider production costs and broadcast prices to include a TV commercial.

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