The Key Questions to Ask Before Planning Your Marketing Budget
We speak to a lot of designers and brands, and we know that one of the trickiest aspects of a business to both do and then analyse, is your marketing activity. Marketing can often feel like a never-ending game of tug-and-war between your outputs and sales, making what should be an opportunity to have fun, get creative and showcase your brand and values feel like a chore.
Well, as is so often the case, having a firm plan in place for your marketing will help you to overcome some of these woes. But before you choose your strategy, you'll need to know your budget, who you are trying to reach, and how much time to allocate to bring it to life.
Whether you're drawing up your first marketing budget or re-calculating your expenses for the year ahead, here's a list of critical questions you should be asking yourself.
1. What’s your total revenue?
Your gross revenue is the amount of money your business takes in before your expenditure is calculated. Forgive us for stating the obvious, but you need to be realistic about the funds you have to spend before getting too excited about Facebook and Instagram advertising!
2. What’s the size and the scale of your business?
Just starting out? Marketing is crucial when you don’t have the credentials of the more prominent, established brands who rely heavily on referral and brand loyalty to sell their products. If you're a new business, a massive 12-20% of your gross revenue should go towards marketing, according to Wordstream.
Particularly in such an overcrowded market, sustainable brands need to focus on their differentiating factors. Revisit our Q&A with Jennifer Hakim from Dare PR, to understand how you can emphasise these in your marketing outputs.
3. What are your competitors doing?
Knowing what stage your business is at can you identify who are your main competitors, which is probably one of the simplest ways to set your budget. Using the figures outlined above for what businesses spend on average on their marketing activities, you can find this out based on the revenue of your competitors.
4. What is the state of your current sales funnel?
Your sales funnel consists of the potential journey your customer takes in the leadup to making a purchase. Think of the top of the funnel as the point where someone sees a post on your social media feed, and the bottom when they’ve completed a transaction on your website.
You can track this by analysing all your current channels – your website, social media accounts, email lists – and seeing where people tend to drop out of the funnel. For instance, if your customers make more purchases by clicking on your email links than your social media ads, then you should be investing more in email.
5. Do you need to hire someone?
For digital marketing, in particular, paying an agency or an expert can be a solid investment – if a little pricey. You have the option to work with someone in-house or a third party. In our PR & Communications for Sustainable Brands Masterclass, you can hear about the respective benefits of each.
A more affordable option could be to hire additional staff who can help with specific skills and save you a lot of time. For instance, a social media assistant, copywriter, web editor, image editor or photographer, all of whom can be hired on a part-time or freelance basis.
6. What kind of content do you want to create?
Visually engaging content is crucial to the success of any marketing campaign, whether it’s photography, film, or graphic design. Understanding what you want to create in advance and how much you have to spend on it, will mean less time and money wasted. If you’re starting out, we recommend starting small and building up your content over time based on what you see working on your channels.
7. What proportion do you spend on content and distribution?
“For every brand, there is no fixed formula. You will have to test out a little bit of everything and see the kind of response you are receiving from each activity.” Nirali Malji Shah, Lacuna Lab
All figures are dependent on the individual brand case, but on average, 20% of your budget will go to making content, and 80% to distribution – i.e. social media, advertising, email channels.
8. Are you going to focus on print or digital campaigns?
Digital marketing is increasingly cheaper and more accessible for brands everywhere, and particularly for sustainable brands who are seeking to keep waste to a minimum. A 2018 survey states that businesses typically allocate 42% of their overall marketing budget to online activities – and this is set to rise.
This gives you an idea of how much you should be spending on digital advertising, email, social media, etc. as opposed to the traditional channels of print advertising or mail drops.