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by John Jack
on May 25, 2020
We are well aware of the fact of how important marketing is when it comes to growing your business. You have a great idea, but you do not know how to convey it to your audience. Marketing is there. You want to widen your reach; marketing will take care of it. You want brand recognition, marketing to the rescue again!
So overall, for the sustenance of a successful brand or growth of emerging business, marketing plays a significant role.
However, marketing can be expensive. It can cost pretty much high for running paid campaigns. No matter if you are hiring an influencer to promote your products or services or simply using Google Ads. However, as a matter of fact, higher expenses can yield better results.
But to make sure you do not mess up your budget, it is smart to know how much you can afford to spend. How much you should spend and how you should divide the funds. More often than not, people do not really like discussing money. But there is no harm in reading to gain information. In this blog, we have discussed how to decide the perfect marketing budget for your company.
Decide your overall expenditure
There is a lot of conflicting advice about how much money you should be spending on marketing. Some people also say that you should not spend money on marketing unless you start earning a considerable profit. But this is wrong, without a doubt. Typically, you cannot make any money if people don’t know that you exist.
For emerging businesses or companies trying to expand fast, you can spend between 12 to 20% of your total gross revenue. But keep it at least 12% to achieve some results. However, for established businesses, spending 5 to 12% of total gross income is a good bet. This is because these companies already have a solid base of loyal customers, and in their case, the main motive is to keep this audience engaged with them.
Keep in mind that, to earn money, you need to spend money. However, another thing that you must remember is in the beginning; you will face some trials and errors in marketing, even with the help of experts. It takes time to figure out what works best for your company. Therefore, avoid spending money that you cannot afford to lose. If spending $1500 means losing the entire savings of your lifetime, you better don’t. Marketing is a worthy investment, of course, but it can be a gamble.
Make a list of marketing platforms
You must have got an idea about how much money you should spend on marketing. Now write down the list of marketing platforms of your choice, in order of priority. For instance,
Search Ads like Google Ads
Social Ads such as Instagram and Facebook Ads
Content marketing
Social media marketing
Influencer marketing
Email Marketing, etc.
Calculate the expected cost and ROI of each platform
Before dividing the budget, consider the expected cost and return on investment (ROI) of each platform. Some platforms may have higher prices as compared to others, but they can also have higher ROI.
Most PPC campaigns are high cost but are capable of generating high ROI quickly. On the other hand, email marketing is low cost but can produce great results. Moreover, apart from the obvious cost, you may want to calculate the hidden costs that might include (in case of PPC campaign):
Charges of hiring an agency for either consultation or execution of your campaign
Charges for hiring an expert for graphic designing, copywriting, photography, etc. even if it is a one-time fee.
Expenses on software needed for the proper execution of the campaign such as analytics tools
Expenses of failed campaigns in case it does not convert.
Some of these costs might be one-time, while some will be ongoing. But do not get your hopes too high. Think practically; do not expect results in the first attempt.
Look at what is working for you
Already got ads and campaigns running for your company? Look at which ones are working for you.
If you have been spending a lot on LinkedIn ads and it is not really working for you, there is no point in continuing it. However, if you have got a solid content and it is showing progress slowly, you do not want to just change your lane for something that looks more alluring or easy.
Decide your marketing strategy as well as your marketing budget on the basis of the elements mentioned above. Also, keep in mind that some strategies take time more than others to yield higher results, especially if it is a low-cost one. It can be a long-term effort but will definitely be worth it.
Divide your budget
Once you have your list and estimated cost, you can now divide up your budget.
For instance, let’s assume a new business called Puppy Treats sells dog food. Their overall gross revenue is $100,000 currently. Now to expand their business, they decide to spend 15% of their gross income on marketing. So, they have $15,000 to spend on it.
As per their choice, they want to use Google Ads, Facebook Ads, email marketing, and content marketing as their main platforms. Google Ads and Facebook Ads to attract dog owners and reach new audiences. Email marketing and content marketing to build a strong relationship with the audience.
For Google Ads and Facebook Ads, they want to spend $500 monthly. Now email marketing software can cost anything between $400 to $500, so to save that money, they decide to write emails themselves for now. However, there is not enough money to have content marketers write every post. But they do have spare $1000 to get a content marketing plan developed by an expert so that they can implement this plan. The remaining money can go in softwares like analytics tools or social media marketing tools.
So, here this business prioritized Google and Facebook ads because they needed to reach a more new audience right now. Instead of going for a content marketer, they developed a plan which they can implement themselves. So, deciding and dividing your budget is all about setting up your priorities smartly. Also, stick to your marketing budget, you do not want to end up losing more than you can afford.
Concluding, deciding your marketing budget is not all about determining how much to spend. It is also about dividing it up carefully and investing in the right places. Whether your revenue is high or not, to make money, you must spend money. And with marketing, nothing is more reliable than that.
Hariom Balhara is an inventive person who has been doing intensive research in particular topics and writing blogs and articles for E Global Soft Solutions. E Global Soft Solutions is a digital marketing, web development, SEO and SMO company that comes with massive experiences. We specialize in digital marketing, web design and development, graphic design, and a lot more.
SOURCE: Determining the Perfect Marketing Budget For Your Company, E Global Soft Solutions
Posted in: Marketing