Marketing Budgets 101
No two businesses are built the same. Likewise, there’s no one-size-fits-all solution for setting a marketing budget — it all depends on the growth stage of your company, your customers, and your marketing goals. Without proper budgeting and media planning, great advertisements and products are on a fast track to nowhere.
Tailoring your marketing budget upfront will reap long-term dividends. Researching your competition, understanding your sales objectives, and determining which media best support your marketing goals all translates to effective budget allocation.
Pick a Strategy
The Buddy System: Take a look at your competition to gauge how much they’re spending on advertising. Which media are they taking advantage of? What’s the frequency of their purchases? Tools like Spyfu and SEMrush evaluate how much your competitors are spending on Google Ads. After roughly estimating where they buy ads and at what cost, match your budget for a good baseline.
Revenue-based: The US Small Business Administration recommends spending 7–8% of total gross revenue on marketing, annually. On the other hand, if you’re just starting out and pursuing aggressive growth, we recommend dedicating upwards of 20% of your yearly revenue on a combination of branding, website development, and advertising.
Goal-oriented: Define a quantifiable goal, then work backwards to determine your ad buy. For example, how many Instagram Ads should you purchase to increase your social media follower count by 5%? How many Google Ads will generate 20 new leads for your sales team? Goal-oriented planning may work well if you have a larger, more flexible budget.
Breaking it Down
When it comes to prioritizing resources within your budget, you should evaluate what your specific intent is. For example, are you looking to increase sales for a particular product or service? Or is your mission to increase brand awareness within a certain age demographic? With definite targets in mind, it’s easier to decide whether PR, SEO, or paid social advertising is your best course.
According to Gartner, 21% of marketing budgets are dedicated to paid advertising. Of that 21%, two thirds are dedicated to paid social media ads. This benchmark can help guide your ratio of paid ads to other media channels.
Online Opportunities
Social and online advertising may be some of the most effective tactics in reaching your target audience. Since you can hyper-target consumers by geographic location and demographics, social and online ads pack the most (potential) punch per buy.
Timelapse developed a digital marketing campaign for VEC, a leader in construction technology by launching a series of Linkedin ads, Google search ads, and Adroll retargeting ads. By targeting construction executives, VEC was able to surge the number of visits to their website and connect with new clients.
Whenever you’re unsure which approach will be most effective, test, test, test. Start with evenly distributed ads across your considered channels, tracking ROI for each. After a few months, cut the low-performers, and double down on leaders; over time, you’ll be led to a balanced, rewarding strategy that’s unique to your business.
Timelapse’s founder and CEO, Olivier Roth, recently delivered a Linkedin Live on the ins and outs of social media advertising, including the specific benefits of each platform. Check it out here.
Marketing at a Crossroads
In the last decade, traditional media marketing has slowly decreased year-over-year, while digital media buying has steadily increased, even doubling between some calendar years. Timelapse has eagerly embraced this shift, like in 2019, when we created 30-second Hulu spots for Tawkify, an online dating concierge service (Hulu offers lower-cost advertisement models with their self-service Ads Manager, which you can test with a minimum of $500).
This isn’t to say traditional media isn’t worth looking into, although the approach may necessitate a somewhat larger scale budget. Producing and airing a television commercial can be expensive, and newspaper advertising costs are only increasing as print publishing falls behind the dynamic, highly-flexible digital mediascape.
With so many options converging to offer near-infinite possibilities, it can feel daunting to develop an effective marketing plan and budget. At Timelapse, brands reach the full potential of their marketing budget through savvy ad placement and innovative strategy. Start your free, five-minute marketing performance assessment, today.
