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

What Is a Marketing Budget?

A selling fund outlines the expenses a concern plans to allocate toward selling successful a circumstantial clip frame. Budgets are typically established connected an yearly oregon quarterly basis. 

The expenses elaborate successful a selling fund whitethorn see the following: 

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

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

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

Download our escaped selling fund template

How to Determine Your Marketing Budget

Common approaches include:

• Spending a fixed percent of your gross oregon wide fund connected marketing
• Basing your selling fund connected manufacture benchmarks
• Allowing your concern goals to find your selling expenditure 

Let’s see each method. 

Marketing Budget arsenic a Percentage of Revenue oregon Overall Budget

In this method, you allocate a acceptable percent of your full gross oregon wide fund to selling expenses. 

In 2023, the mean selling 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 selling fund volition beryllium influenced by assorted factors. Like your company’s maturation stage. And industry. 

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

This Statista graph shows assorted industries’ mean selling expenses arsenic a percent of wide budget: 

Image Source: Statista

Marketing Budget Informed by Industry Benchmarks

In this method, you probe what different businesses successful your manufacture oregon niche walk connected marketing. This accusation informs your selling fund allocation. 

Every manufacture has selling norms. And benchmarks. Some industries dedicate a larger information of their wide fund to selling than others. Similarly, the organisation of selling budgets crossed assorted channels volition alteration from manufacture to industry. 

The information successful the array beneath shows the mean selling 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 effectual businesses akin to yours find idiosyncratic selling channels

Where tin you find this information? 

• Find caller manufacture averages successful selling oregon manufacture probe reports. For instance, The CMO Survey regularly conducts surveys of main selling officers. And publishes the results for free. 
• Sites similar Statista people benchmarking data. But often necessitate a rank to entree it.
• Industry associations, LinkedIn groups, forums, and manufacture newsletters are bully places to larn astir selling 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 with the concern outcomes you privation to execute done marketing. And enactment backwards from there.

For example: 

You acceptable a extremity to get 100 caller customers utilizing a circumstantial channel. To cipher however overmuch you request to fund for selling to scope this goal, you archetypal request to cognize however overmuch it costs to get 1 caller customer. 

Then, multiply that fig by the fig of caller customers (100). And adhd fixed selling costs. Like payroll and software. 

If your lawsuit acquisition outgo is $250 per customer, and your fixed selling costs magnitude to $13,000, the equation would look similar this:

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

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

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

This is lone a guideline. To found your selling budget, see your concern numbers and goals.

Marketing Budget Examples

Sometimes, the fastest mode to larn is by example. 

Sample Marketing Budget for a Small Business 

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

Sample Startup Marketing Budget 

• Company name: SmartSavings App
• Industry: Financial exertion (Fintech)
• Offering: Mobile exertion for idiosyncratic concern 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 fiscal habits
• Marketing goals: Increase app downloads, idiosyncratic engagement, and marque designation done targeted integer advertising, influencer partnerships, and app store optimization

Sample B2B Marketing Budget

• Company name: DataInsight Analytics
• Industry: B2B bundle arsenic a work (SaaS)
• Offering: Business quality 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 assorted industries seeking to leverage information for strategical insights.
• Marketing goals: Strengthen marque authorization done thought enactment content, nurture leads with targeted email campaigns and webinars, and grow scope done strategical partnerships with manufacture influencers and consulting firms

Common Marketing Costs

Marketing costs notation to each the expenses progressive successful promoting a brand, product(s), oregon service(s), specified arsenic the following: 

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

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

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

Paid Advertising

Paid advertising costs see the expenses associated with advertising.

Paid media accounted for 25.6% of selling 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 carnal displays
• Search motor ads 
• Display ads 
• Retargeting campaigns 
• Affiliate selling commissions 
• Social media marketing

Paid advertizing costs are not conscionable placement fees. Factor successful the costs of creating content, managing the 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 marque up 23.3%, according to the Gartner CMO survey. 

Image Source: Gartner

Marketing endowment costs see payroll. And benefits similar raises and bonuses for selling staff. And recruitment costs progressive successful hiring caller employees. 

Marketing endowment 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 selling hires travel with further costs. Like recruiting, onboarding, and training. And instrumentality and bundle licenses oregon “seats.”

Freelancers and Agencies

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

Currently, 20.2% of selling tasks are outsourced. This fig is expected to summation by 5% wrong the 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 with imperishable staff
• You tin prosecute on-demand experts who would different bid precocious salaries
• Hiring an bureau is often much businesslike than doing the enactment successful house
• If you deficiency the skills, resources, oregon instrumentality to execute a task successful house, outsourcing tin span these gaps
• Paying hourly oregon per-project gives you greater fund flexibility 

Cons:

• Experienced freelancers and vendors with specialized skills are expensive
• Finding talented, reliable freelancers tin beryllium hard and time-consuming
• Outsourcing tin impact a batch of feedback and back-and-forth to get connected the aforesaid page
• Agencies and freelancers necessitate progressive absorption 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 bundle covers a wide scope of tools. To plan, create, manage, and way selling campaigns. 

To sanction a few:

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

Before you put successful immoderate selling software, larn astir each tool's features. And work reviews and lawsuit testimonials.

Content Creation

Content instauration costs overlap considerably with talent, outsourcing, and adjacent bundle costs. And contented instauration is often the astir costly part. 

Aside from the outgo of hiring nonrecreational creatives, contented costs see each the materials, tools, equipment, software, resources, and different incidental expenses progressive successful creating selling collateral. 

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

• $112,000 was the mean yearly wage for a full-time U.S.-based contented marketer successful 2023. 
• 69% of marketers allocate much than 10% of their selling 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 the 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 concern successful societal media, integer video, and influencer selling makes sense. Considering the popularity of video-based societal channels similar TikTok, YouTube, and Instagram Reels. 

You mightiness not displacement your fund to caller channels close away. But it tin assistance steer your selling strategy successful the agelong term. And assistance you take wherever to commencement experimenting.

Download our escaped selling fund template 

How to Develop a Marketing Budget

1. Define Your Marketing Goals

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

From there, it’s overmuch easier to cipher the costs involved. And estimation your instrumentality connected concern (ROI). So you tin allocate funds wherever they’ll person the astir impact.

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

• Specific: Be wide and precise astir what you privation to achieve.
• Measurable: Set metrics and criteria to way advancement and measure performance. Like the fig of email signups oregon conversion rate.
• Actionable: Set goals that are realistic. And achievable. With the disposable resources and time. 
• Relevant: Set goals that align with broader concern objectives. Like expanding income and improving marque awareness.
• Time-bound: Establish wide clip frames and deadlines. And docket milestones to measurement progress.

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

Here’s however to crook that into a SMART goal: 

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

SMART goals assistance you fund due to the fact that you cognize precisely what you privation to achieve. And when. They support you focused. And guarantee you're not conscionable going done the motions. But making existent progress.

2. Understand Your Audience 

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

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

A purchaser persona is simply a hypothetical lawsuit illustration that represents a conception of your audience. Buyer personas bespeak your people customers’ behavior, motivations, preferences, and problems. And however your concern solves them. 

To make 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 merchantability a merchandise erstwhile you cognize precisely who you’re talking to. And which of their needs your connection addresses. 

Once you person utile insights, make three-to-five personas. If you effort to formed the nett excessively wide, your messaging volition not beryllium circumstantial capable to beryllium relatable. 

Next, adhd demographic and psychographic data. 

Include the following: 

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

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

Select a idiosyncratic who looks similar 1 of your (potential) customers. Click “More Photos” beneath the images if nary of the archetypal 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 acceptable your peculiar concern requirements
• User persona template: Specifically for detailing the characteristics of existent oregon imaginable users of your merchandise oregon service

Click connected the template you’d similar to use. 

Fill retired the template with details describing your hypothetical customer. 

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

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

Remember, the much circumstantial your lawsuit personas, the easier it is to link with your audience. And assistance guarantee you usage your selling fund effectively. 

3. Determine Monthly Expenses

It’s a bully thought to recognize however overmuch you walk conscionable to run the business. Before you determine however overmuch wealth to allocate to aboriginal selling projects.

Review your historical monthly selling 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 physique successful a buffer for unexpected costs. Or opportunities. 

4. Research the Competition 

Taking inspiration from your competitors’ selling efforts tin assistance usher your ain selling strategy. And budget. 

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

Use the pursuing tools to analyse your competitors’ selling tactics. And expenditures.

• Traffic Analytics: See however 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 presumption details astir your competitors' ranking keywords, website traffic, postulation cost, and more. 

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

5. Audit Past Marketing Performance

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

Here are immoderate selling metrics to explore:

• Revenue/sales growth: Increase successful income successful a circumstantial clip frame
• Number of impressions oregon views: How galore users viewed your contented oregon ad
• Click-through rate: How galore users clicked connected your contented oregon ad
• Conversion rate: What percent of users completed a desired action. Like submitting a form, subscribing to your newsletter, downloading a file, oregon completing a purchase.
• Return connected investment: Revenue maturation minus advertizing costs
• Cost per conversion: Average outgo of a completed enactment (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 selling data, the much penetration you’ll summation into precisely wherefore a circumstantial maneuver worked. This, successful turn, makes it easier to make palmy campaigns successful the future.

Further reading: Top 50 Marketing KPIs for Businesses and Agencies

6. Use a Marketing Budget Template 

Start with a fund template that provides guidelines by dividing your imaginable selling expenses into categories. 

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

Free Marketing Budget Template 

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

Get our escaped selling fund template here.

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

Get arsenic granular arsenic you privation erstwhile readying your budget. 

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

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

Our template besides features abstracted tabs you tin usage for idiosyncratic channels, categories, oregon campaigns. For example, you mightiness usage the template to make a “master budget” for video advertizing arsenic a channel. 

And usage further tabs to make accumulation and promotion budgets. For each idiosyncratic video.

7. Allocate Your Marketing Spend

A communal mode to administer selling walk is by pursuing the 70-20-10 rule. 

This means allocating:

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

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

The last 10% mightiness beryllium allocated to thing similar ordering customized institution swag (merchandise).

8. Choose Your Marketing Channels Wisely 

Prioritizing the close channels is simply a cardinal portion of your selling budget. When we accidental “channel,” we mean every mean that tin beryllium utilized to make an assemblage touchpoint. Not conscionable antithetic 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 selling fund should you allocate to each channel? 

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

Some factors to see include

• Your concern model: Some channels are much effectual for immoderate concern models than others. For example, the champion transmission for a edifice apt wouldn’t enactment for a B2B bundle company.
• Your people audience: Different channels entreaty to antithetic demographics. For teenagers, you mightiness prioritize TikTok. Whereas accepted advertizing media whitethorn beryllium much effectual if you’re targeting older consumers
• Your selling strategy: Depending connected your selling goals and past data, prioritize 2 oregon 3 proven channels. And allocate a smaller magnitude to trying retired a caller channel. 
• Your selling 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 the size of your budget,certain selling channels whitethorn simply beryllium excessively expensive. For instance, broadcast ads whitethorn beryllium excessively costly for your existent budget. Or the CPC whitethorn beryllium excessively precocious to prolong a paid ads campaign. 

9. Measure Performance and Calculate ROI

To find retired whether your selling is successful, way performance. And cipher the ROI. 

Knowing which channels, tactics, and campaigns connection the 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 with a wide cost-per-click makes it casual to comparison run costs to full income revenue. 

On the different hand, it tin beryllium a situation to cipher selling ROI erstwhile you can’t ever property income oregon conversions to an idiosyncratic campaign. Or touchpoint. 

However, determination are a mates of formulas you tin use. To get an estimation of your selling ROI. 

Simple Marketing ROI Calculation 

This look assumes that each gross maturation is the effect of selling 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 close thought of your selling ROI. Unless selling is straight liable forall of your gross growth. 

This is uncommon but could use to you if your concern is marque new. Or your concern 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 aims to get a much close ROI by archetypal subtracting your mean integrated gross maturation from full gross growth. This mean maturation mean is calculated based connected the existing income inclination successful the months starring up to a caller selling campaign.

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

Example: A institution with 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 close ROI than the archetypal formula. 

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

Not to notation the semipermanent returns resulting from investments successful evergreen content and SEO. 

Further reading: Learn much astir calculating content selling ROI oregon SEO ROI. 

Stretch Your Marketing Dollars with Semrush

Setting a realistic and effectual selling fund starts with knowing your goals. And knowing your audience. 

Once you’ve completed these steps, download our escaped selling fund template. To allocate selling spend. And measurement show passim the year. 

Use Semrush’s tools, similar Keyword Magic and Advertising Research, to get maximum mileage retired of your selling budget. And marque your selling strategy a success. 

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