Posted: 29 Dec 2020 Contributor: Hannah OBrien
A Pragmatic Guide To Planning Marketing Budget in 2021
It’s always better to start planning your B2B marketing budget for the coming year too soon rather than too late. This will be especially important for 2021 which is likely to have more variables than ever before. Coming off the back of a turbulent year for all, especially those in services businesses, marketing faces great uncertainty which is why having a budget for marketing plan options is so crucial. You can find and follow a marketing budget example, but asking yourself, how do you structure a marketing budget that reflects your business and goals is the first key step.
When it comes to a marketing budget breakdown, the main goal is to create a document for how much your business plans to spend on marketing over a specific period, either per year, quarter, month, etc. Budgeting for marketing expenses needs to consider all costs associated with marketing your business, such as paid ads, hiring costs, marketing tools, website maintenance expenses, and anything else which you will need to finance in 2021.
When you create a marketing budget breakdown, you’ll be able to keep track of how much you spend on each strategy, easily notice if you’re overspending in one area, or need to increase it in others. If you don’t bother creating a marketing budget, you’ll likely find yourself overspending, and adding to the financial difficulties which the previous year has likely caused. When you know how to best allocate your funds, you can start to better optimize your overall approach to marketing, and help streamline your overall organization into a more cost-effective and efficient one. This is because it allows business owners to determine which strategies work with your budget and how best to use them to generate the best ROI. So let’s take a look at how and why you can budget for your marketing plan for 2021.
Why 2021 Needs A Marketing Budget
If 2020 was a difficult year for businesses, 2021 is likely to be more of the same. There will be many factors affecting your advertising budget and it brings with it the prospect of heightened internal competition for budgets and businesses placing an even greater scrutiny over anything they spend money on due to the financial difficulties that will probably be in place. This makes planning ahead a vital thing to do, regardless of what industry, sector, services or products you deal with.
Having a well-defined budget helps you set realistic goals that look to progress your business forward without overstretching your menas. Based on your budget, you can set clear, objective, and realistic expectations for your various marketing channels and therefore have a greater understanding of the revenue you need to earn to make everything worthwhile financially.
Planning your 2021 marketing budget thoroughly and ahead of time gives you added certainty, allowing you to create a long-term plan for your overall approach to how you want to market your business moving forward. This long-term perspective prevents you from having to fight for additional marketing spend throughout the year and limit encouraging campaigns due to funding changes. While some flexibility will need to be built into your budget no matter what, a long-term funding plan enables you to create a more consistent, coherent and effective marketing strategy that can be improved upon with every coming year.
Tips to Plan a Marketing Budget in 2021
Knowing how to plan a successful marketing strategy and budget is key for all businesses, but with increased competition and a marketplace currently in flux, it is crucial to the sustainability of SMBs in particular. Here are some tips for how to plan a marketing budget in 2021:
Understand External Costs: Preparing a marketing budget starts with establishing any and all external costs. You need to know how much everything costs your company in order to properly allocate your upcoming budget. This includes everything from operational costs, so creating products, shipping them, etc to the costs of employing staff and generally running your business. Everything has to be considered when creating your marketing budget plan, not only to determine what services you can invest in, but also to set a baseline for your return on investment.
Know Your End Goals: Once you know your overall financial situation, you then need to know what you want to achieve and budget accordingly. Relating to your marketing you can set goals that focus on either earning more sales or increasing leads all the way through to just raising your brand awareness. After this has been established you need to be specific with them and set a precise target to work towards.
So, you can set a goal like “Increase total sales by 15% by the end of the year”. This goal can be easily measured and ensures clarity for all the teams working towards it. It’ll also provide a concrete reference point when budgeting for marketing because you know how much you want to increase sales by, and the timeline for achieving it. Having a goal is good, having a specific end goal is better.
Focus On Your Market Intricacies: You’ll then need to know where your business or ideas fit into your wider marketplace in order to build an effective marketing budget plan. When you understand how you compare with your closest competitors, you can better establish which strategies you need first. Competitor analysis is needed to see how your competition performs online, and importantly where they fall down, leaving gaps for your marketing to effectively exploit. There are now even competitor analysis tools to help you see what your competition is doing, all helping you create a clearer picture for the specific strategies you’ll need to budget to drive success, be it social media, PPC or retargeting to name a few.
Implement Available Strategies: Once all this has been done, and you have your budget on paper, you have to then choose and successfully implement your strategies based on which seem to be the best fit for your business and goals. There are numerous digital marketing strategies you can use, including SEO, PPC, Email Marketing, Social Media, and General Content Marketing that will all be at your disposal for 2021. When you know which strategies you want to invest in, you can determine how they will fit into your marketing budget plan, and truly build a strategy that offers you the maximum financial reward and ROI at the lowest risk. That is why a marketing budget plan is so important to not just survival, but success when others fail.
Setting up a marketing budget is important for every digital marketer and, if you haven’t already, you need to start building one ahead of 2021. Planning out a budget helps you save money you would otherwise be wasting on online campaigns, and optimize the ones you already have running. At a time when businesses need all the help they can get, having a defined marketing plan with clear goals helps align everyone at your company and generate profitability, even during a down economic situation. If you do need any support with your online marketing, reach out to experienced professionals who can help you navigate these tricky situations.