As a fractional CMO, I work with all types of businesses. From large-scale to solopreneurs, everyone’s marketing needs are different. A marketing budget breakdown should never be a one-size-fits-all approach.
As you plan your marketing budget for the year, consider the areas you already invest in that are working well and aren’t working toward your goals. Think about new things you might want to try to bring in new leads and clients. You have to allocate your budget and resources efficiently to get the most out of your money and time.
That just scratches the surface of what we will get into in this blog.
Determine Your Total Budget
Step one is figuring out your total marketing budget. You can decide on a monthly or annual budget. I prefer to consider it a monthly expense since I also bill clients monthly. A well-planned marketing budget breakdown ensures that your marketing efforts align with business goals and generate a return on investment.
Your marketing budget breakdown depends on your total expenses and income. Experts suggest allocating 7% of your total income to marketing expenses. I think that’s a good benchmark, but again, it depends. If you have super low expenses in other areas, I think you can spend a little more on marketing. On the flip side, if you have high expenses in your business, you might be able to only afford to invest 5% of your income in marketing.
Ultimately, your marketing budget should feel comfortable; don’t stretch yourself too thin. But remember, this is how you will bring in new leads and clients for your business. You don’t want to skimp on your marketing efforts!
6 Types of Marketing Expenses
Let’s go over a few things you could spend your marketing budget on. I’m sure there are TONS of things you can think of to invest in, but what are the most important? If you’re new to entrepreneurship, what areas are important to start with to create a foundation? How can you expand your current marketing strategy into new areas if you’re more established?
As you work on your marketing budget breakdown, I recommend investing in various marketing activities to ensure a balanced strategy. Especially if you’re new, you aren’t sure what works yet. Try a few different things on a smaller scale to see what you like doing and your audience’s response.
If you’ve ever wondered, “What is included in a marketing budget,” here’s your answer!
Branding and Website Design
Before marketing your services to clients, you need professional branding and a website. Branding makes your business look more legitimate, and your website gives potential clients a place to learn more about your business and services.
Here are some examples of expenses that may fall under this category:
- Logo design
- Branding suite (colors, fonts, etc.)
- Web design
- Domain hosting
- Website builder (like Showit)
- Website copywriting
- Professional brand photos
Luckily, once you invest in branding and web design, it should last you several years until you choose to rebrand! Only a few things are an annual expense, such as professional photos and hosting platforms.
Content Marketing and SEO
Content marketing is a popular choice in a marketing budget breakdown. It includes blogging, social media, email marketing, video production, podcasts, SEO, and lead magnets. I highly recommend you choose at least one to start with.
Content marketing is all about brand awareness and establishing your expertise. You won’t necessarily book a new client from one social media post you create (although it could happen!), but you’ll introduce them to your brand and start to nurture them from there.
SEO will help you reach a brand new audience from search engines. This is a great place to invest time and money. Even though it’s a long-term strategy, your growth compounds over time. The effort you put into it now will pay off later.
The biggest expenses in this category are tools and outsourcing. However, the nice thing about content marketing is that you can do all of this yourself. You don’t necessarily have to outsource any of it if you don’t want to or can’t afford to right now.
Paid Advertising
Paid advertising is a marketing strategy for more businesses with a budget to support a strategy. Paid advertising can yield incredible results and give you a jump start with lead generation, but can be a big expense. You’re investing money to have your ads shown, and you may need to hire a paid ads manager if you aren’t comfortable controlling it on your own.
Events
Events can be a great way to market your business. You’re getting in front of new and large audiences and can connect with them personally. Events offer a few ways to interact with your audience:
- Be a speaker
- Host a booth or table
- Sponsor the event
- Come as an attendee
In-person events can be a huge expense with travel fees, so you could look into virtual events, too! These can be a more affordable option to dip your toes into events.
Outsourcing
If these marketing activities aren’t up your alley, you can always outsource them to other business owners. You could get specialists in certain areas (social media managers, paid ads specialists, etc.) or hire a fractional CMO to do a little bit of everything, including the strategy.
Outsourcing is a cost you should really plan for. Most business owners require a certain length of a contract, three months, for example. You have to plan for a consistent expense like this. Another thing to consider is your ROI from outsourcing. Is this person going to get you results to justify the expense? Or are they simply checking a box to get a task done? Take time to interview potential contractors to find the right person to work in your business.
Software and Tools
This will be your biggest expense, aside from outsourcing. Tools and software can add up quickly, so be mindful and strategic about the platforms you use. Look for comprehensive tools that can do multiple things for you. For example, I invest in Dubsado because it automates invoices, proposals, contracts, client communication, and renewals for me. Other tools, like HelloSign, only handle contracts.
You can also see if the marketing tools you are considering have free versions you can use. I use Asana as my go-to project management tool. I use the paid version but I know several small businesses who use the free version, and it gives them everything they need. It’s all about finding that balance with your unique business needs and goals!
Marketing Budget Breakdown Tips
As you build your marketing budget, think about your target audience. Your marketing efforts are only effective if they reach the right audience. Invest in the channels where your audience spends time.
Second, think about what you’re trying to accomplish from your marketing efforts. Are you trying to prove your expertise? Do you want to educate your audience? Are you hoping for new contact form submissions? Do you want to grow your email list? Your goals will determine the best marketing channels to use.
When determining your marketing budget, make sure the channels you’re investing in have a realistic cost per acquisition. If you’re spending a fortune on paid ads but each lead is only worth $50, that might not be the right channel to use for that purpose.
Creating Your Marketing Budget Breakdown
I know there’s a lot to consider when creating your marketing budget breakdown! Your business goals and target audience play huge roles in how you allocate your budget. There is not a one-size-fits-all approach for all small businesses.
As a fractional CMO, I help businesses develop strategies that maximize their marketing budgets. If you want an expert to guide your marketing strategy, I’d love to chat! Book a free discovery call to learn how to allocate your marketing budget effectively.
