3 Tips to Creating Your 2022 Marketing Budget
If you run a small business, you know the new year means more than just personal goals. Your goals will extend into your business and how you see your business performing at this time next year. Depending on the items or services you offer, you’ll be looking over how well you did this year, tweaking your business plan, and reconsidering some things.
One of these things will be your budgeting, specifically when it comes to marketing. Marketing and digital advertising play a large role in any business and staying up to date with the most effective methods and tools has the power to set your business apart. As you begin to review your business plan and budgeting we want to give you some tips and factors to consider when creating your 2022 marketing budget.
Understanding ROI or Return On Investment
In the simplest of terms, an ROI is the ratio between income and investment. ROI is mainly used to evaluate or compare efficiency between investments, and in this case your investment in marketing. Whether your advertising includes print media, mobile ads or sponsorships, understanding your business and your audience will help you reap the greatest benefit.
The best way to figure out which aspects you should be spending more on is to pay attention to your customer pipelines. For example, if you send out a discount code in a promotional email, track how many of those were used!
Create a Solid Yearly Strategy/Budget
Planning is an inevitable and crucial part when owning a business. And spending goes hand in hand. After you’ve taken a good look at last year’s ROI you’ll want to begin your budget for the new year. When creating your marketing/advertising budget, begin with your total allocated number. This is the total amount you want to spend that year.
The next step is splitting that number into more detailed sections like print, social media, and broadcasting. You can split this by dollar amount or just by a rough percentage so that you and your team have an idea of what’s to be spent where.
Is There a Magic Number?
Any honest marketing expert will tell you there is no “one-size-fits-all” number when it comes to budgeting. Your personalized budget will be a combination of multiple different things based on your business. Two heavy-hitting factors to consider are your company size and how established your business is.
Based on a previous study, established companies only need to spend about 6-12% of gross revenue on marketing, while newer companies should spend about 12-20% percent. Picture this, a company with a revenue of $100,000 wants to spend 15% on marketing. They would take their revenue and multiply it by their percentage. In this example, that company would allocate $15,000 to their yearly budget.
When it comes to budgeting, your decision must be based on your business and how it works. Paying attention to how your audience and consumers react to your advertising is the key to creating the perfect budget for you. Investing in great content, reviews, and educational tips to use for your marketing will always reflect well on your business. Click here for a free marketing budget spreadsheet to help you get started!
After deciding on your 2022 marketing budget, don’t stop there, execute your proposed strategy and track results. If you’re looking for expert assistance in creating a budget personalized for your business or making the most of your budget, give us a call today!