It's Going to Cost What?!

It’s going to cost WHAT?!!!

There’s a good chance that as an owner of your small business, you're not exactly sure about the standards and thinking that go into a winning marketing budget.

This isn’t your expertise, but you aren't a fan of burning cash and time, so you're open to learning a better way to approach this for the year ahead.

Tell me if this sounds like you, or someone you know:

• You’ve spent way too much on a brand guide that is currently collecting digital dust.
• There’s a monthly retainer going to the “agency”, and you’re questioning what you’re paying them for or if it makes more sense to bring marketing in-house.
• You’ve blown your credit card up, numerous times, with Facebook/Instagram ads, driving low to no leads. That was fun.
• You’re spending or have spent a ton on creative; videography, photography, design assets, etc., that look nice but aren’t being run through a proper brand storytelling or advertising framework. You're thinking, what am I supposed to do with all of this?

So let’s save you from that, shall we?

Folks, your marketing budget is not a mish-mash account, where you spend when you feel sales need to increase, or you’re feeling creatively frisky, your budget needs to be set against the following pillars, with clear amounts of expenditure targets/thresholds:

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What you pay the humans in your company to lead marketing.

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What you pay humans outside of your company to execute marketing support, per discipline. Agencies, freelancers, consultants, etc.

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A Capital expenditure, that is amortized, over the growth and tenure of the business.

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The costs associated with bringing your brand to life, online and offline; branding, website, content creation, landing pages, etc.

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The monies spent to hook and win attention for your brand and product/service offerings, online and offline.

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The dollars spent to engage your audience, online and offline, with your brand, people, product/service offering, culture, etc.

This is why it can be a difficult conversation when a firm like ours asks you, what have you budgeting for this project or marketing this year.

Clients rarely have zero idea or budget allocated—but more often than not, the budget isn’t realistic against the expectations or objectives of the project itself.

So here are the standards you need to be looking at—and it’s quite simple:

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You want to be allocating upwards of 15-20% of gross revenue into marketing. This is to cover all spending, from humans to projects. If you fall into this category, there is work to be done across brand, advertising, and marketing strategy. What you don’t want to have to happen, and we see this a lot, is to underinvest in the assets that should be amortized, e.g.: Brand Development, and overspend in Advertising, when aren’t equipped or ready.

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You want to be allocated 8-10% of gross revenue into marketing. If you fall into this category, your business has found its niche, your brand resonates, you’ve got a lead or team overseeing marketing, you’ve developed a marketing strategy unique to your business model, and you’ve found the most effective ways to advertise.

Get tight on this as you map out marketing for the year ahead.

If you have questions on this, let me know and I’ll do my best to provide more insight to support you.

-Ryan