With the holiday season is just a few short weeks away, the new year is just around the corner. If you haven’t started to set your marketing budgeting for 2014, it’s time to get busy. By planning your marketing budget for 2014 now, you have the best chance of meeting your marketing goals without costly mistakes.
Whatever stage you’ve reached in your budgeting process – whether you’re just getting started or your budget is complete – ask yourself 4 questions to make sure your planning is airtight.
1. How much budget should you allocate to marketing?
When you set your marketing budget for 2014, its size will depend on a number of variables. It’s important to decide on your marketing goals for the year and determine whether you need to allocate more to make more. Are you launching any new products or services? Does your website need a new responsive design? How much more content will you generate, compared to last year? These and similar questions will highlight where additional spend may be required.
A smart approach is to look carefully at what your business has spent in the previous year and how much of that spend translated into revenue. With the use of good marketing tools, it’s possible to see exactly where money was well spent. Using that information, you can project how much more you can generate in 2014, using a similar or revised budget focused in different areas.
If it’s your first time setting a budget, start with 5% of your annual turnover. If that’s not comfortable, work it down until it is.
If you’ve never had a budget, don’t put off creating one. It might seem obvious, but you’d be surprised how many organisations fail to allocate a budget, preferring instead to approve spend with each new activity. But the dangers here are numerous. For a start, the business has no control over how much it spends across the year and, without careful planning, is more likely to throw money into activities that fail to generate any return.
2. How will you allocate marketing budget against activities or customer segments?
Once you’ve set your marketing budget for 2014, it’s time to decide what to spend it on. It goes without saying that a decade-old strategy won’t work today. In fact, even in the last 12 months, the market has changed so much that you’ll need to make a few changes if your strategy is going to help you grow your business.
By assessing last year’s successes and failures, you can identify areas in which you need to increase your spend. Can these increases be balanced out by cutting spend in other areas? Take a look at the tactics you’ve used in the past. Are they still working? Perhaps your target market has changed and you need to examine new channels. Do you have the resource and the skills in house to deploy your marketing effectively? And what are your competitors up to? There’s a good chance that if several businesses similar to yours are generating huge Twitter followings or blogging wildly, then those are the options you need to consider.
Regardless, most businesses will be wise to consider the following areas when deciding on how to spend their marketing budgets:
- Inbound marketing: Be found, attract then convert. Content marketing is a must. Buying behaviours have changed and prospects are influenced by their online research before they buy. It’s essential to develop great content that draws prospects to you. Make sure you understand the principles and allocate budget for content creation, social media, lead nurturing and analytics.
- Content creation: As defined beautifully in this Forbes article about content marketing trends, your content marketing strategy is essential for developing the thoughtfully-placed information that contributes to inbound marketing techniques. Do you have someone who can generate great content such as videos, e-books, blogs, whitepapers or email marketing?
- Blogger outreach: Business-related blogging has topped the priority list as a marketing tactic. A credible blogger with a large, targeted audience is a great way to share your message.
- Social media: According to a study reported by Marketing Land, 54% of B2B marketers surveyed say they have generated leads from social media. For the first time this year we saw Christmas adverts launched on social media before they were launched on TV. Don’t underestimate the power of social media. Embrace it and use it effectively to build brand awareness, generate leads and build relationships with customers.
- Customer insight: To ensure your business focuses on the needs of your customers, a proportion of your marketing spend needs to be allocated to developing actionable customer insight.
- Mobile marketing: According to this Mashable report, analysts believe that by 2015, mobile web will be bigger than desktop internet use. It’s time to ensure your website is responsive and adapts to any browser so that your customers can access, read and buy from it on any device.
- Proposition development: Clear value propositions will make your offerings stand out from those of your competitors. If they don’t, you’ve got some work to do. Don’t rely on your sales force to convey your message. Help them convey it effectively. Today, many buying decisions are made online, based on research. If your propositions are not clear, your sales team may never get to have that all-important discussion.
3. Where does spend need to be reallocated?
It’s time to let go of some old habits that simply no longer work. If your organisation has run a banner across an online publication for the last five years, or sent brochures to businesses along the high street for several years, or attended a particular annual trade show, these tactics may already be factored into your budget. But the fact is, if they haven’t brought in revenue recently, they’re unlikely to make you a fortune now.
Consider the following areas when planning your marketing budget. Is your money better spent elsewhere?
- Print advertising: There is always a need for print, but buy your print advertising wisely. This outbound marketing technique can be an expensive means of generating very little revenue, if it is not targeted and creative. Your success will depend on elements such as design, targeted readership and the timing of your ad’s placement. Make sure they work in your favour.
- Direct mail: It’s a costly tactic, and although there may be a time when this is a great approach, don’t carry out the activity simply because it’s what you’ve always done. If you do, your money will pour into people’s recycling bins. Be more creative – and target more effectively.
- On-page SEO: You still need SEO, but make sure you’re paying for something you actually need. The rules are constantly changing and, with the latest Google Hummingbird update, SEO experts are scratching their heads figuring out how best to apply their skills. They need to adapt and you need to ensure you’re not spending money on SEO tactics that no longer deliver results.
- CDs: Are you really still producing these? A few new tactics have made CDs rather dated.
4. Have you set up effective reporting for budgeted versus actual costs?
Once you’ve set your marketing budget for 2014, it’s important to monitor it on a monthly basis to see clearly where you’re under or over budget. Budget reporting is one of many marketing controls whereby your marketing spend can be allocated against relevant nominal codes (used to group accounting information together) in your accounts, giving you a clear picture of your monthly outgoings.
Nominal codes can be set up to represent the different categories of marketing spend – by customer segments or by product. However you choose to approach your reporting, work with your finance team to ensure it’s possible to generate the reports you need. This way, you can get clear data that will help you to measure you return on investment more accurately. It’s a great way to ensure your business can make regular adjustment decisions that will help you maximise profit and limit any poorly-performing marketing tactics.
Budgeting isn’t often a marketer’s favourite task, and as a result, it can be left too late. For help or inspiration with setting up your marketing budget, get in touch. We’re here to help. Contact us on 01206 646 006.
