Planning for the next financial year might be the last thing on your mind right now, but no sooner are you done with Christmas – POW! Marketing budget sign-offs are staring you in the face. So, there’s no time like the present to start preparing your groundwork.
As Businesses Execs, we’ve prepared many budgets in our time, so are deeply familiar with the cycle of Review – Research – Build – Lobby – Pitch – Implement. We also recall the frustration when the total of everyone’s budget proposals comes to 120% of what’s available!
So, how do you create and deliver a marketing budget that gives you the very best chance of getting the funds that you need to make a credible difference in your business?
Here are the 6 questions you need to answer …
1. What should my total marketing budget be?
In our experience, budget considerations should be viewed from 4 perspectives – the sweet spot is, of course, where these 4 perspectives meet and overlap :
Align your Marketing Budget with Revenue and Business Goals:
A good rule of thumb for stable businesses is to allocate 5-10% of your total revenue for marketing. For aggressive growth, you might need to increase that to 10-20%. Is it time to rethink your website design? – do you also need to plan in some capital spend projects to take your brand to the next level?
Don’t forget to allocate yourself a testing budget, and consider the key measures of success you will commit to tracking to ensure that your campaigns are supporting your overall business goals.
Consider Industry Benchmarks:
Research what competitors in your industry are doing, and if possible, what they are spending. B2C brands often invest more heavily in digital, while B2B may split more evenly between digital and traditional channels.
Reports of industry benchmarks vary, but broadly, companies are currently typically spending around 9% of sales on marketing. Here are the latest typical ranges we come across by industry group :
Tailor to Growth Goals:
If you’re launching new products or expanding into new markets, set aside extra funds for promotions, content, and targeted campaigns
2. Which channels should I prioritize in 2025?
Double Down on Digital:
We recommend allocating at least 60-70% of your budget to digital channels like Website maintenance, SEO, PPC, Content and social media ads. After all, your website is your digital store front, so it needs to look great and perform well.
Don’t Overlook Offline:
All businesses involve some level of in-person interaction, so consider allocating part of your budget to offline channels like networking, events, trade shows, and sponsorships.
Test Emerging Channels:
Set aside a portion of your marketing budget for experimenting with newer platforms or tools, like Apps, influencer marketing or AI-driven customer engagement
3. How do I allocate between brand awareness and performance marketing?
Review Past Campaigns:
Analyse which previous efforts delivered against your objectives – which generated more long-term value (often brand awareness) vs. immediate returns (performance) and adjust your budget mix accordingly
Balanced Approach:
How you split your marketing budget will depend on your business goals, but everything being equal, we recommend splitting your budget evenly—about 50% for brand-building (e.g., content marketing, social media) and 50% for performance (e.g., SEO, PPC, email marketing)
Adjust Based on Business Stage:
If you’re a new business, budget to the upper end of the % of turnover range and prioritize brand awareness. If you need speedy results, (well set up and maintained) Online Advertising campaigns give the quickest ROI.
For more established SMEs who are in a stable lifecycle phase, budget towards the lower end of the % turnover range and lean more heavily into performance marketing to maintain or grow sales.
4. How can I ensure flexibility in my marketing budget?
Create a Contingency Fund:
Set aside 10-15% of your marketing budget for unforeseen opportunities or market changes
Monthly Reviews:
Regularly assess campaign performance and reallocate funds from underperforming channels to higher-performing ones
Remain Agile:
Be prepared to pivot quickly if trends change, new opportunities arise, or unexpected challenges (like economic shifts) occur
5. What new 2025 trends should I account for?
Focus on First-Party Data:
With third-party cookies being phased out, invest in collecting and utilizing your own customer data for more personalized marketing
Leverage AI Tools:
AI-driven tools for personalization, customer service, and analytics can help you with inspiration, boost efficiency and reduce costs. Have you tried creating your own GPT yet?
Incorporate Video and Interactive Content:
Demand for video continues to grow. Consider producing short, engaging video content and interactive tools (e.g., quizzes, calculators). Remember, you have 8 seconds in which to capture attention!
6. How do I justify my budget to stakeholders?
Use Data-Driven Insights:
Present clear data from past campaigns showing the ROI of marketing efforts, especially how they have driven revenue and customer acquisition. Include your research on what’s happening in the wider market.
Align your presentation with Business Goals:
Demonstrate how the marketing budget addresses the target audience, and how it supports broader company objectives like sales growth, product launches, or customer retention
Include a Contingency Plan:
Show foresight by including a test and learn budget, and by proposing a flexible budget that accounts for potential market changes.
Summary
Planning your marketing budget for 2025 involves not only understanding past performance but also anticipating future trends and challenges. From setting clear growth targets to balancing digital and offline channels, marketers need a strategic yet flexible approach. Incorporating contingencies for unexpected shifts and investing in emerging technologies like AI and first-party data will help businesses stay agile and competitive.
At WSI Digital Advisors, we specialize in helping SMEs develop marketing strategies that optimize every aspect of your budget. Whether you’re looking to improve your digital presence, enhance SEO, or explore new advertising channels, our expert team is here to guide you. Contact us today to start planning your 2025 marketing strategy, and make sure every investment counts!
