The need to invest in marketing is a no-brainer for businesses that want to accelerate their growth, but when you’re aiming for results, the line between spending and overspending is easily blurred. When you want to make sure your expenses never exceed your returns, a strategic marketing budget template will help you plan wisely throughout the year.

Every marketing plan needs a budget to keep it grounded. With financial restraints in place, you keep your team focused on the tactics that will have the most positive impact on your marketing return-on-investment (ROI). Instead of trying to take on the entire list of ideas from your strategy session, you’ll have a budget that keeps you creative, while stopping you from getting overambitious.

We’ll explain what it takes to set your marketing budget and provide a free template for you to plug the numbers in.

Creating your marketing budget

At the very minimum, your company should always have one overarching annual budget to keep your marketing expenses on the right track. Though marketing teams often create budgets throughout the year—breaking down the necessary expenses for specific campaigns, product launches, and more—this annual document will serve as your primary financial guide.

To help you get started, we’ve broken down the marketing budget planning process into four steps:

1. Calculate your total marketing budget

The first number you can expect to fill in on any given annual marketing budget template is the total amount you can spend.

There are many different approaches that business owners use to calculate this dollar amount, but most commonly, companies will allocate a designated percentage toward their marketing departments. Some marketing experts suggest setting your marketing spend based on your company’s age, as follows:

  • First year in business: Over 20% of your gross revenue
  • Year 1-5: 12-20% of your gross revenue
  • Year 6 and beyond: 6-12% of your gross revenue

The exact percentage you select for your budget may vary from year to year, depending on your company’s current marketing goals.

Some established companies will take a leads-driven approach to setting their annual marketing budget instead. To get a solid total budget from this approach, all you need to do is:

  • Calculate your average cost per lead. Take a look at how much you spent on marketing in the previous year and divide that by the amount of leads you gained. For example, if you spent $150,000 to generate 1,000 leads, your average cost per lead is $150.
  • Then, set a goal for how many leads you want to gain. Make sure it’s feasible, based on your history of lead generation.
  • Last, multiply your goal by your average cost per lead. If your goal is to generate 1,100 leads and your average cost was $150 per lead, you know you need to budget out at least $165,000 for marketing. Of course, you should always aim to up your conversion rate from year to year to make your marketing spend more efficient.

2. Prioritize your top marketing goals

You may have already considered your marketing goals when setting your budget, but for this second step, you’ll need to examine them a little closer and decide which are the most important to you. Rank your goals in order of priority for every quarter.

There’s no specific strategy you need to use to select the goals that matter most. Simply prioritize the marketing goals that make the most sense for your company’s long-term growth and overall business goals.

3. Allocate your budget

Just having a massive number as your total marketing budget won’t do your business much good. In order to truly spend wisely, you need to divide up your annual funds into quarters, then into specific categories of marketing fit.

You don’t need to—and usually shouldn’t—allocate your budget evenly. Instead, you need to figure out what combination of marketing strategies and tactics will be most effective in helping you reach your quarterly marketing goals, then divide the money accordingly.

Because every company uses a different assortment of tactics to reach their goals, your marketing budget template will likely end up being unique to your team. However, there are some categories (and subcategories) that businesses commonly use, including the categories in this non-exhaustive list:

Marketing operations budget

When you’re building your marketing budget, it’s important to set the costs behind running your marketing team in the first place. Your operations budget will primarily include recurring expenses like:

This is also a great category for any miscellaneous expenses that don’t quite fit into any specific marketing buckets, but rather serve your marketing department as a whole.

Content marketing budget

This part of your budget should include any required content creation costs. Because salaries are already taken into account in your operations budget, this will primarily include outsourcing costs. Think about what your team can feasibly get done in-house, then set a budget for freelancers like photographers, videographers, writers, editors, and designers.

For in-house projects, this may also include content licensing fees and creative software subscriptions.

Social media marketing budget

This category encompasses all the expenses required to interact and engage with your audience on social media, as well as expand your reach on social platforms. If desired, you can further break this part of your budget down into subcategories like:

  • Facebook ads
  • LinkedIn ads
  • Scheduling tools
  • Analytics software
  • Influencer campaigns

This category can also include fixed costs that are specific to social media marketing, like subscriptions for scheduling, analytics, and brand monitoring tools.

Digital marketing budget

Social media marketing usually stands out as a category of its own because of how critical it has become, but that doesn’t mean you should forget the costs that go toward other forms of digital marketing. Your digital marketing subcategories may include:

  • Website maintenance
  • Google AdWords
  • Online review management software
  • Search engine optimization (SEO) tools
  • Marketing automation tools

Print advertising budget

This category can include any expenses that go toward non-digital advertising. You may choose to further include these subcategories in your marketing budget template:

  • Direct mail
  • Newspaper ads
  • Magazine ads
  • Billboards
  • Brochures
  • Signage

Even ecommerce brands may find it useful to set a print advertising budget, if any of these strategies will help them achieve their goals.

Public relations budget

If your company’s public relations efforts are lumped into your marketing team’s responsibilities, you may also have a PR budget. This can take up a large amount of your overall marketing budget if you’re outsourcing your press release creation, media outreach, and similar needs to an external public relations agency.

Your PR budget may also include the costs associated with promoting your brand at events like trade shows and conferences, including booth fees and swag to give away. 

4. Reassess quarterly

Your marketing budget shouldn’t necessarily be flexible—you do need to set strict guidelines for yourself to prevent overspending—but you shouldn’t hold yourself to a strategy that isn’t working. If the marketing tactics you planned to use aren’t effectively helping you achieve your goals, you may decide to move around your funds to different categories in the following quarter.

Every quarter, you should also assess where your spending actually went. Take a look at where you didn’t fully use your budget and where you ended up overspending (if applicable), then readjust your marketing plan or budget as needed.

Reassessing quarterly will also show you if you have money leftover from your budget in the past quarter, in case you want to roll over these funds to maximize your marketing efforts in the next.

Free marketing budget template

As you build your annual marketing budget plan, you can use this free template to visualize your spending maximums for each quarter and marketing type listed above. You’re always free to add more line items as needed. After all, the more detailed your plan can be, the better.

How to use this template:

  1. Open the template in Google Docs (must be signed in to a Google account).
  2. Click File > Make a copy.
  3. Fill in the template with your marketing budget information.

Set your financial limits

Setting limits for your marketing spend shouldn’t limit what you can do. Instead, it can help you plan smarter, filling your year with only the best marketing campaigns—those that help your ROI rise the fastest. If you want to build an even stronger strategy, create budgets for every project your team works on.

If you find that you’re tight on funds as you’re filling in your marketing budget template, get our cost-effective ideas to grow your business. No matter how much money your company has to run on, you’ll find that growth is absolutely possible.

Matt Boyce
Matt Boyce Head of SMB Marketing

Matt Boyce is a marketing and business professional at Podium, the premiere messaging platform that connects local businesses with their customers.

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