How to Create a Marketing Budget in 9 Steps (+ Free Template)

What Is a Marketing Budget?

A trading fund outlines nan expenses a business plans to allocate toward trading successful a circumstantial clip frame. Budgets are typically established connected an yearly aliases quarterly basis. 

The expenses elaborate successful a trading fund whitethorn see nan following: 

• Marketing squad salaries
• Software costs
• Web hosting
• Ad placement
• Press relations expenses
• Outsourcing costs

How overmuch you should walk connected trading depends connected a scope of factors, including:

• Industry size
• Growth stage
• Annual revenue
• Location
• Customer base
• Overall business strategy

Download our free trading fund template

How to Determine Your Marketing Budget

Common approaches include:

• Spending a fixed percent of your gross aliases wide fund connected marketing
• Basing your trading fund connected manufacture benchmarks
• Allowing your business goals to find your trading expenditure 

Let’s see each method. 

Marketing Budget arsenic a Percentage of Revenue aliases Overall Budget

In this method, you allocate a group percent of your full gross aliases wide fund to trading expenses. 

In 2023, nan mean trading fund was 9.1%of full revenue, according to Gartner’s CMO Spend and Strategy Survey. 

2023 Marketing Budget arsenic a Percent of Total Revenue (2019-2023)

Image Source: Gartner

Your trading fund will beryllium influenced by various factors. Like your company’s maturation stage. And industry. 

For example, user packaged equipment companies allocated an mean of 22.61% of their wide budgets to trading successful 2023. For mining and building companies, that percent dropped to 3.75%.

This Statista chart shows various industries’ mean trading expenses arsenic a percent of wide budget: 

Image Source: Statista

Marketing Budget Informed by Industry Benchmarks

In this method, you investigation what different businesses successful your manufacture aliases niche walk connected marketing. This accusation informs your trading fund allocation. 

Every manufacture has trading norms. And benchmarks. Some industries dedicate a larger information of their wide fund to trading than others. Similarly, nan distribution of trading budgets crossed various channels will alteration from manufacture to industry. 

The information successful nan array beneath shows nan mean trading fund by industry, based connected CMO Survey data.

Useful manufacture benchmarks include:

• The mean full magnitude spent connected marketing 
• Which channels are favored by companies successful your industry
• How overmuch companies successful your niche typically walk connected each channel
• How effective businesses akin to yours find individual trading channels

Where tin you find this information? 

• Find caller manufacture averages successful trading aliases manufacture investigation reports. For instance, The CMO Survey regularly conducts surveys of main trading officers. And publishes nan results for free. 
• Sites for illustration Statista people benchmarking data. But often require a rank to entree it.
• Industry associations, LinkedIn groups, forums, and manufacture newsletters are bully places to study astir trading norms. And trends successful your industry. 
• Semrush’s Advertising Research instrumentality lets you research and analyse competitors’ paid hunt advertisement history. Allowing you to spot what they walk connected pay-per-click (PPC) marketing. 

Marketing Budget Driven by Business Goals

Start pinch nan business outcomes you want to execute done marketing. And activity backwards from there.

For example: 

You group a extremity to get 100 caller customers utilizing a circumstantial channel. To cipher really overmuch you request to fund for trading to scope this goal, you first request to cognize really overmuch it costs to get 1 caller customer. 

Then, multiply that number by nan number of caller customers (100). And adhd fixed trading costs. Like payroll and software. 

If your customer acquisition costs is $250 per customer, and your fixed trading costs magnitude to $13,000, nan equation would look for illustration this:

($250 x 100) + $13,000 = $38,000

To scope your customer acquisition goal, you’d fund $38,000 for this trading campaign. 

Repeat this process for each trading goal. Whether you want to turn your pursuing connected societal media, increase integrated traffic to your website, aliases thrust merchandise demo signups.

This is only a guideline. To found your trading budget, see your business numbers and goals.

Marketing Budget Examples

Sometimes, nan fastest measurement to study is by example. 

Sample Marketing Budget for a Small Business 

• Company: FreshBite Catering
• Industry: Food & beverage
• Offering: Catering services for firm events, weddings, and typical occasions
• Annual revenue: $500,000
• Marketing fund arsenic a percent of revenue: 10% ($50,000)
• Target customer: Corporations, arena planners, engaged couples, and individuals hosting events
• Marketing goals: Increase marque awareness, boost catering bookings, and grow customer base

Sample Startup Marketing Budget 

• Company name: SmartSavings App
• Industry: Financial exertion (Fintech)
• Offering: Mobile exertion for individual finance management, budgeting, and savings
• Annual revenue: $500,000 (post-funding)
• Marketing fund arsenic a percent of revenue: 15% ($75,000)
• Target customer: Millennials and young professionals seeking to amended their financial habits
• Marketing goals: Increase app downloads, personification engagement, and marque nickname done targeted integer advertising, influencer partnerships, and app shop optimization

Sample B2B Marketing Budget

• Company name: DataInsight Analytics
• Industry: B2B package arsenic a work (SaaS)
• Offering: Business intelligence and analytics level for data-driven decision-making.
• Annual revenue: $8,000,000
• Marketing fund arsenic a percent of revenue: 12% ($960,000)
• Target customer: Mid-sized to ample enterprises crossed various industries seeking to leverage information for strategical insights.
• Marketing goals: Strengthen marque authority done thought activity content, nurture leads pinch targeted email campaigns and webinars, and grow scope done strategical partnerships pinch manufacture influencers and consulting firms

Common Marketing Costs

Marketing costs mention to each nan expenses progressive successful promoting a brand, product(s), aliases service(s), specified arsenic nan following: 

• Web development
• SEO
• Ads
• Software
• Salaries
• Freelance help
• Event venue rental
• Marketing agency fees

Basically, it's each nan money you walk to get nan connection retired astir your business. And pull caller customers. 

The cardinal to staying wrong your fund is paying attraction to nan details. It’s besides a bully thought to build immoderate elasticity into your budget. To relationship for unexpected expenses. 

Paid Advertising

Paid advertising costs see nan expenses associated pinch advertising.

Paid media accounted for 25.6% of trading budgets successful 2023, according to Gartner’s report.

Paid advertizing includes accepted advertizing media. And online paid advertizing opportunities.

Examples include: 

• Ads successful people media 
• TV commercials 
• Radio spots
• Billboards and different beingness displays
• Search motor ads 
• Display ads 
• Retargeting campaigns 
• Affiliate trading commissions 
• Social media marketing

Paid advertizing costs are not conscionable placement fees. Factor successful nan costs of creating content, managing nan campaigns, and budgeting for ads that alteration by engagement. Such arsenic cost-per-click (CPC) and pay-per-click (PPC) models. 

Payroll and New Employees

Labor typically accounts for 24.6% of a CMO’s budget. Agencies and services dress up 23.3%, according to nan Gartner CMO survey. 

Image Source: Gartner

Marketing talent costs see payroll. And benefits for illustration raises and bonuses for trading staff. And recruitment costs progressive successful hiring caller employees. 

Marketing talent includes: 

• Creative directors 
• Artists/creatives
• Copy editors
• SEO strategists 
• Writers
• Marketing managers 
• Data analysts 
• Photographers 
• Videographers
• PPC specialists 
• Copywriters
• Content managers 
• Graphic designers 
• Content creators 
• Video editors
• Sound engineers
• Social media marketers

New trading hires travel pinch further costs. Like recruiting, onboarding, and training. And instrumentality and package licenses aliases “seats.”

Freelancers and Agencies

In-house, agency partner, aliases freelancer? This is simply a mobility you’ll apt look erstwhile establishing and updating your trading budget. 

Currently, 20.2% of trading tasks are outsourced. This number is expected to summation by 5% wrong nan adjacent year. 

Image Source: The CMO Survey

Many marketers prosecute extracurricular help. Like freelancers, agencies, and different vendors. Outsourcing has its pros and cons. Some of which we’ve listed below.

Pros:

• Freelancers and agencies widen your in-house capacity 
• Outsourcing avoids galore costs associated pinch imperishable staff
• You tin prosecute on-demand experts who would different bid precocious salaries
• Hiring an agency is often much businesslike than doing nan activity successful house
• If you deficiency nan skills, resources, aliases instrumentality to execute a task successful house, outsourcing tin span these gaps
• Paying hourly aliases per-project gives you greater fund flexibility 

Cons:

• Experienced freelancers and vendors pinch specialized skills are expensive
• Finding talented, reliable freelancers tin beryllium difficult and time-consuming
• Outsourcing tin impact a batch of feedback and back-and-forth to get connected nan aforesaid page
• Agencies and freelancers require progressive guidance to guarantee you’re getting your money’s worth.
• Outsourcing involves much ongoing admin than hiring full-time staff. Like managing contracts and invoices.

Marketing Software

Marketing package covers a wide scope of tools. To plan, create, manage, and way trading campaigns. 

To sanction a few:

• Analytics software: Try a instrumentality for illustration Google Analytics to way run performance 
• SEO reporting tools: Use devices for illustration Keyword Magic to behaviour keyword research. And Site Audit to way nan capacity of your website.
• CMS platforms: For managing and publishing content
• Email trading software: For managing interaction lists
• SMS trading tools: For wide communication 
• Project guidance software: To streamline collaboration. And support teams connected track.
• Marketing automation software: For streamlining trading workflows
• Social media scheduling tools: Look for devices for illustration Social Poster that fto you easy schedule posts. And analyse results. 
• Image and video editing software: For creating marque assets
• Lead prospecting and CRM tools: For managing income and customer relationships

Before you put successful immoderate trading software, study astir each tool's features. And publication reviews and customer testimonials.

Content Creation

Content creation costs overlap considerably pinch talent, outsourcing, and moreover package costs. And contented creation is often nan astir costly part. 

Aside from nan costs of hiring master creatives, contented costs see each nan materials, tools, equipment, software, resources, and different incidental expenses progressive successful creating trading collateral. 

To springiness you an thought of contented trading costs, present are immoderate statistics:

• $112,000 was nan mean yearly net for a full-time U.S.-based contented marketer successful 2023. 
• 69% of marketers allocate much than 10% of their trading fund to content
• 20% of marketers walk $3,000–$5,000 connected contented per month

Where Are Marketers Focusing Their Marketing Spend?

In 2023, CMOs planned to summation investments successful nan pursuing categories: 

• Social advertising: 53%
• Digital video advertising: 51%
• Influencer marketing: 49%
• Digital show advertising: 46%
• SEO: 46%

Change successful Investments for Digital Channels successful 2023 (Percentage of Respondents)

Image Source: Gartner

Increasing finance successful societal media, integer video, and influencer trading makes sense. Considering nan fame of video-based societal channels for illustration TikTok, YouTube, and Instagram Reels. 

You mightiness not displacement your fund to caller channels correct away. But it tin thief steer your trading strategy successful nan agelong term. And thief you take wherever to commencement experimenting.

Download our free trading fund template 

How to Develop a Marketing Budget

1. Define Your Marketing Goals

With intelligibly defined objectives, you tin place which channels and strategies to prioritize. 

From there, it’s overmuch easier to cipher nan costs involved. And estimate your return connected finance (ROI). So you tin allocate costs wherever they’ll person nan astir impact.

The SMART goals model offers a elemental attack to creating clear, achievable goals. 

• Specific: Be clear and precise astir what you want to achieve.
• Measurable: Set metrics and criteria to way advancement and measure performance. Like nan number of email signups aliases conversion rate.
• Actionable: Set goals that are realistic. And achievable. With nan disposable resources and time. 
• Relevant: Set goals that align pinch broader business objectives. Like expanding income and improving marque awareness.
• Time-bound: Establish clear clip frames and deadlines. And schedule milestones to measurement progress.

For example, opportunity your extremity is to summation website traffic. 

Here’s really to move that into a SMART goal: 

• Specific: Improve integrated website traffic 
• Measurable: Improve integrated website postulation by 20%
• Actionable: Hire an SEO agency to constitute optimized blog posts. To amended integrated website postulation by 20%.
• Relevant: Hire an SEO agency to constitute optimized blog posts to amended integrated website postulation by 20%. To summation marque awareness. And make leads.
• Time-bound: Hire an SEO agency to constitute optimized blog posts. To amended integrated website postulation by 20% by year-end to summation marque awareness. And make leads.

SMART goals thief you fund because you cognize precisely what you want to achieve. And when. They support you focused. And guarantee you're not conscionable going done nan motions. But making existent progress.

2. Understand Your Audience 

Successful trading hinges connected knowing your perfect customers wrong out. And targeting them pinch laser-like focus. 

Understand your target assemblage by creating elaborate buyer personas. The much you cognize astir your perfect buyer, nan little guesswork trading involves. And nan much efficiently you tin allocate your trading budget. 

A purchaser persona is simply a hypothetical customer floor plan that represents a conception of your audience. Buyer personas bespeak your target customers’ behavior, motivations, preferences, and problems. And really your business solves them. 

To create your purchaser personas, commencement by gathering information astir your existent and prospective customers. Use surveys, interviews, and information from Google Analytics. And different platforms.

Look for patterns that uncover their motivations. And symptom points. It’s a batch easier to waste a merchandise erstwhile you cognize precisely who you’re talking to. And which of their needs your connection addresses. 

Once you person useful insights, create three-to-five personas. If you effort to formed nan nett excessively wide, your messaging will not beryllium circumstantial capable to beryllium relatable. 

Next, adhd demographic and psychographic data. 

Include nan following: 

• Age
• Sex
• Job role
• Income level
• Geographic location

Prefer to usage a template? Use nan Semrush Persona instrumentality for free. 

Select a personification who looks for illustration 1 of your (potential) customers. Click “More Photos” beneath nan images if nary of nan first options consciousness right. 

Once you prime a photo, take 1 of 3 templates: 

• Default template: A wide template for creating a purchaser persona. Adjustable to your circumstantial needs.
• B2B template: Designed for business-to-business scenarios, this template tin beryllium altered to fresh your peculiar business requirements
• User persona template: Specifically for detailing nan characteristics of existent aliases imaginable users of your merchandise aliases service

Click connected nan template you’d for illustration to use. 

Fill retired nan template pinch specifications describing your hypothetical customer. 

Next, adhd demographic information. Like age, location, acquisition level, and income level. Complete nan sections successful immoderate order. 

Upload a different photograph if you prefer. Here’s an illustration of a completed persona:

Remember, nan much circumstantial your customer personas, nan easier it is to link pinch your audience. And thief guarantee you usage your trading fund effectively. 

3. Determine Monthly Expenses

It’s a bully thought to understand really overmuch you walk conscionable to run nan business. Before you determine really overmuch money to allocate to early trading projects.

Review your historical monthly trading spend. Taking into relationship ongoing expenses like:

• Payroll
• Software subscriptions 
• Website hosting fees 
• Website maintenance
• Monthly advertizing costs
• Incidental expenses that alteration month-to-month. Like outsourcing to freelancers.

The thought is to get astatine a baseline. That tin service arsenic your minimum monthly fund for marketing. Don’t hide to build successful a buffer for unexpected costs. Or opportunities. 

4. Research nan Competition 

Taking inspiration from your competitors’ trading efforts tin thief guideline your ain trading strategy. And budget. 

Learn from their successful campaigns. And place gaps successful their strategy. 

Use nan pursuing devices to analyse your competitors’ trading tactics. And expenditures.

• Traffic Analytics: See really overmuch postulation your competitors get
• Organic Research: Find keyword opportunities. By comparing your site’s ranking keywords to those of competitors’ sites.
• Advertising Research: Research your competitors’ advertisement strategies
• Social Tracker: Audit your competitors’ societal media strategies

For example, usage Organic Research to position specifications astir your competitors' ranking keywords, website traffic, postulation cost, and more. 

Drill down into nan information to observe precisely which keywords they’re ranking for (and which successful positions). Identify their apical pages, way position changes, and research which SERP Features are boosting their hunt visibility. 

5. Audit Past Marketing Performance

Analyze information from erstwhile trading campaigns to place which channels, tactics, and campaigns were astir (and least) cost-effective. At feeding your sales funnel. 

Here are immoderate trading metrics to explore:

• Revenue/sales growth: Increase successful income successful a circumstantial clip frame
• Number of impressions aliases views: How galore users viewed your contented aliases ad
• Click-through rate: How galore users clicked connected your contented aliases ad
• Conversion rate: What percent of users completed a desired action. Like submitting a form, subscribing to your newsletter, downloading a file, aliases completing a purchase.
• Return connected investment: Revenue maturation minus advertizing costs
• Cost per conversion: Average costs of a completed action (number of conversions divided by run cost)
• Organic traffic: Traffic resulting from contented marketing
• Direct traffic: Traffic resulting from branded searches. This tin awesome marque awareness.

The much you drill down into your trading data, nan much penetration you’ll summation into precisely why a circumstantial maneuver worked. This, successful turn, makes it easier to create successful campaigns successful nan future.

Further reading: Top 50 Marketing KPIs for Businesses and Agencies

6. Use a Marketing Budget Template 

Start pinch a fund template that provides guidelines by dividing your imaginable trading expenses into categories. 

To amended understand nan types of expenses to anticipate. And fund for. Plus, it’s overmuch easier and faster to capable retired a template than commencement pinch a blank spreadsheet.

Free Marketing Budget Template 

Use our free, broad trading fund template arsenic a starting point. And customize to meet your needs. 

Get our free trading fund template here.

Each fund expanse is divided into subsections truthful you tin shape your expenses by category. Like “software,” “content creation,” and “distribution.” 

Get arsenic granular arsenic you want erstwhile readying your budget. 

Each statement point includes a section for “Projected Spend” and “Actual Spend.” So you tin easy show your fund astatine a glance. 

The template includes a built-in trading fund calculator that automatically adds up your totals arsenic you input numbers. And make updates.

Our template besides features abstracted tabs you tin usage for individual channels, categories, aliases campaigns. For example, you mightiness usage nan template to create a “master budget” for video advertizing arsenic a channel. 

And usage further tabs to create accumulation and promotion budgets. For each individual video.

7. Allocate Your Marketing Spend

A communal measurement to administer trading walk is by pursuing nan 70-20-10 rule. 

This intends allocating:

• 70% toward proven trading efforts that person been known to output bully results. Like blogs that thrust integrated traffic. Or high-conversion Instagram ads.
• 20% to newer aliases little established strategies that person gained immoderate traction and show promise. Like scaling up your video-based marketing.
• 10% of nan fund for “moonshot” trading experiments. These are caller and unproven channels aliases initiatives. That could perchance connection awesome results. Like testing a caller societal media platform

For example, your integer trading fund mightiness relationship for 70% of your spending. While 20% goes to accepted advertizing channels. 

The last 10% mightiness beryllium allocated to thing for illustration ordering civilization institution swag (merchandise).

8. Choose Your Marketing Channels Wisely 

Prioritizing nan correct channels is simply a cardinal portion of your trading budget. When we opportunity “channel,” we mean every mean that tin beryllium utilized to create an assemblage touchpoint. Not conscionable different societal media platforms.

Examples of marketing channels include

• Billboards
• Printed materials
• Emails
• SMS
• Push notifications
• Blogs
• Search ads
• Display ads
• Videos
• Affiliate programs
• Webinars
• Offline activities and events
• Various societal media platforms 
• Broadcast media

How overmuch of your trading fund should you allocate to each channel? 

It depends connected which channels connection nan champion imaginable ROI. For your peculiar business. 

Some factors to see include

• Your business model: Some channels are much effective for immoderate business models than others. For example, nan champion transmission for a edifice apt wouldn’t activity for a B2B package company.
• Your target audience: Different channels entreaty to different demographics. For teenagers, you mightiness prioritize TikTok. Whereas accepted advertizing media whitethorn beryllium much effective if you’re targeting older consumers
• Your trading strategy: Depending connected your trading goals and past data, prioritize 2 aliases 3 proven channels. And allocate a smaller magnitude to trying retired a caller channel. 
• Your trading objectives: Some channels are amended suited to gathering definite objectives than others. If you purpose to amended your conversion complaint by 20%, you mightiness prioritize your website. And email copy. 
• Your budget: Depending connected nan size of your budget,certain trading channels whitethorn simply beryllium excessively expensive. For instance, broadcast ads whitethorn beryllium excessively costly for your existent budget. Or nan CPC whitethorn beryllium excessively precocious to prolong a paid ads campaign. 

9. Measure Performance and Calculate ROI

To find retired whether your trading is successful, way performance. And cipher nan ROI. 

Knowing which channels, tactics, and campaigns connection nan highest ROI enables you to fine-tune your fund allocations.

It’s easier to cipher ROI from immoderate channels and campaigns than others. For instance, paid hunt advertizing pinch a clear cost-per-click makes it easy to comparison run costs to full income revenue. 

On nan different hand, it tin beryllium a situation to cipher trading ROI erstwhile you can’t ever property income aliases conversions to an individual campaign. Or touchpoint. 

However, location are a mates of formulas you tin use. To get an estimate of your trading ROI. 

Simple Marketing ROI Calculation 

This look assumes that each gross maturation is nan consequence of trading investment. 

((Revenue growth - marketing costs) / Marketing costs) x 100 = ROI %

Example: A institution spends $5,000 connected marketing. And sees $20,000 successful gross growth. 

(($20,000 revenue growth - $5,000 marketing costs) / $5,000) x 100 = 300% ROI

This method is improbable to springiness you an meticulous thought of your trading ROI. Unless trading is straight responsible forall of your gross growth. 

This is uncommon but could use to you if your business is marque new. Or your business exemplary relies wholly connected paid advertising. And each your income are straight attributable to advertisement walk (e.g., dropshipping). 

ROI Calculation Accounting for Organic Revenue Growth

This look intends to get a much meticulous ROI by first subtracting your mean integrated gross maturation from full gross growth. This mean maturation mean is calculated based connected nan existing income inclination successful nan months starring up to a caller trading campaign.

((Revenue growth - average organic revenue growth - campaign cost) / Marketing costs) x 100 = ROI %

Example: A institution pinch a historical mean integrated gross maturation of 6% launches a $5,000 advertisement campaign. And sees $20,000 successful gross growth. 

(($20,000 revenue growth - 6% of $20,000 - $5,000 campaign cost) / $5,000) x 100 = 276% ROI

This method offers a much meticulous ROI than nan first formula. 

As you tin imagine, specified calculations go overmuch much analyzable erstwhile you relationship for aggregate campaigns. And channels. 

Not to mention nan semipermanent returns resulting from investments successful evergreen content and SEO. 

Further reading: Learn much astir calculating content trading ROI aliases SEO ROI. 

Stretch Your Marketing Dollars pinch Semrush

Setting a realistic and effective trading fund starts pinch knowing your goals. And knowing your audience. 

Once you’ve completed these steps, download our free trading fund template. To allocate trading spend. And measurement capacity passim nan year. 

Use Semrush’s tools, for illustration Keyword Magic and Advertising Research, to get maximum mileage retired of your trading budget. And make your trading strategy a success. 

Whether it’s marketplace research, SEO strategy, contented marketing, paid advertising, aliases societal media management, our devices present results. And agelong your trading dollars further.