If your approach to marketing budgets is to take a lump sum of money and divide by 12 months, we need to talk. Not all months are created equal!
First-time budgeters can find creating a marketing budget to be a huge challenge. How do you know what is the appropriate amount to spend and when to spend it? The place to begin often lies in recent history.
Take a look at what was spent last year as a starting point. Do you see any pattern in marketing expenses? Can you group like expenses into consistent categories?
Here are some expenses I typically consider. Are any of these familiar to you?
- Events and conferences
- Deadline-driven expenses
- Industry calendar
- Opportunity expenses
Events and conferences
Do you exhibit at trade shows? Do you present at conferences or attend to network with others? Guess what? These events are predictable. They typically happen the same time each year. April, May, and early June as well as September and October are busy trade show months. Why? To avoid holidays and summer vacations that are typically busy tourist times.
With this in mind, you know that these months will naturally have higher expenses than other months. As you gain experience with planning and budgeting, you’ll recognize cost-saving opportunities like early bird deadlines, advanced space reservations, and hotel booking through the event.
Some marketing activities involve a consistent, predictable monthly investment and are paid on the subscription model. One such example is deploying press releases to the newswire. You can pay for a single press release at a time or purchase an annual subscription. Annual subscriptions offer a less expensive, per-release price and will often include other services bundled in the price, such as social media outreach.
Subscriptions allow you to spread the cost across the entire year at a low monthly payment. It is worth shopping around for these services each time they are up for renewal. You have lots of choices – new technology as well as new services at lower prices make it worth your while to shop.
You can forecast other expenses based on the deadlines for when they are due. Award programs are an example of this type of expense. If your company nominates new products, programs, or teams for industry awards, you can forecast the expense and timing of the expense. Costs might include writing the nomination, the submission fees, the award banquet fee and associated travel, and the award or trophy.
Certain industries schedule events and celebrations every year. Their trade publications provide editorial calendars that describe the planned content for each issue of their print or eMagazine. For example, National Nurses Week is celebrated in May. If you target the nursing industry, you’ll want to budget funds around activities for this month. Specific content requests go out for case studies, white papers, and advertising. Be ready by creating go-to-market content that is relevant, specific, on-message and timed for these events.
Creating a budget allows you to measure your actual expenses against forecast each month. You can keep on top of expenses and make adjustments should you need to.
I recommend leaving a small percentage of your budget for experimentation. Your planned expenses should account for at least 98% of your budget. If an unexpected opportunity with great potential return on investment arises, you can review your expenses to-date and projected expenses to take advantage of the opportunity.
So What Is the Right Formula?
As you can see, some months your marketing expenses will be higher than other months. Take a look at the total budget you have to work with and assign priorities to the activities. This is a top-down approach. Also, build your information for each month’s activities from the bottom up.
Approaching your budget from the both the top down and bottom up will help you arrive at a solid estimate of expenses that are aligned with your overall marketing goals.