It’s almost impossible to build and execute a marketing strategy without having a consistent budget in place.
You need it to pay for your people, your tools, and any advertising efforts to promote your brand, product, or service.
And yet, that budget itself is a challenge in its own right.
One of the biggest challenges marketers face, in fact. Effective marketing leaders have to be able to secure, manage, and optimize their budgets on an almost daily basis, making it a consistent piece of their marketing campaign roadmap.
That sounds complicated, and it absolutely can be. Fortunately, as with so many other modern business functions, you can alleviate that complexity with the right tools in place.
So let’s talk about those tools. In this guide, we’ll help you build a marketing budget template specifically designed to feed into, and optimize, your marketing plan on an ongoing basis.
More specifically, we’ll walk you through 7 steps on your way to a comprehensive, customizable marketing budget:
- Set Your Annual Marketing Budget
- Connect Your Budget to Marketing Goals
- Decide on the Type of Budget Template You Need
- Define Your Marketing Expenses
- Define Your Expense Channels
- Choose Your Budgeting Template Software
- Create Your Marketing Budget Template
Let’s dig in!
1. Set Your Annual Marketing Budget
This step goes far beyond a budgeting template, of course. Still, it’s a vital part of the process. Your annual budget will be the piece that every line item you enter, every expense you record, will measure up against and add up to.
For the purposes of this post, think of it as the core KPI that allows your template to become a performance measure, not just a spreadsheet in Microsoft Excel or Google Sheets full of numbers.
There are some great guides on determining your marketing budget, which are worth a read to complete this step. You have a few options here:
- Use a percentage of your revenue. Most startups and small businesses, for instance, budget between 7% and 12% of their revenue for marketing.
- Use a fixed budget, which is an amount of money usually derived from a larger business budget where a portion of the leftover funds after costs becomes working marketing spend. Careful: this method is prone to both under and overspending.
- Use competitive benchmarking. Firms like Deloitte have some great market research on how spends differ by industry, audience, and business size.
- Use anticipated ROI. In this model, your marketing allocation is based on the anticipated revenue a given marketing tactic provides. It’s worth spending $5,000 on a LinkedIn campaign, for instance, if your metrics tell you that it will result in $10,000 new revenue.
Using one of these strategies (or a combination of them) helps you set your annual marketing budget. Now, you’re ready for the next step.
2. Connect Your Budget to Marketing Goals
Once your budget is in place, it pays to connect it to your marketing goals. Ideally, every cent you spend should be directly related to one of these goals.
It doesn’t matter if you’re looking to launch a product, or using a service to tweak your messaging. Each expense is for a reason, and connecting those expenses with their reasons will help tremendously once you build your template.
For instance, your tracking might end up finding you overspending on a line item like your new website. But what if that website was central to your product launch, and your initial results have it bringing in more revenue than expected?
Everything in budgeting has that type of nuance. If you can connect your fund allocations with your goals, you can leverage and take advantage of these nuances instead of missing vital insights.
3. Decide on the Type of Budget Template You Need
This is a simple, but deceptively important step. Budgeting can look very different, depending on the type of planning you’re looking to do. As a result, you might want to build any of the below templates to suit your needs:
- An annual template that allows you to plan your entire marketing budget for a given fiscal year.
- A product marketing budget focused solely on promoting your physical product from launch to maturity in a timeframe that may not be annual.
- A website budget that digs into the nuances of the various processes and funds required to build, maintain, and optimize your site.
- An event budget that breaks out the details for recruitment, marketing, or sales event.
Ultimately, they’re all following the same rules. But they do require some nuances in a setup that go beyond the scope of this guide. So, we’ll stick with the most common need: the annual, comprehensive plan that can include at least a version of all of the other budget categories.
3. Define Your Marketing Expense Categories
Next, define your marketing expenses on a broad level. These will become the sections into which your budget template is split. Don’t worry about the individual line items yet – we’ll get to those.
Marketing expense categories can include examples like the following:
- Personnel expenses for your marketing team
- Operational costs for your marketing department
- Public relation expenses
- SEO-related expenses
- Paid digital marketing campaigns
- Trade shows and other event-based expenses
The exact categories, of course, depend on your marketing mix. The idea here is that you know exactly what ‘buckets’ your budget will flow into before you start building your template (which will be organized according to those buckets).
4. Define Your Channels, from Content Marketing to Social Media
Closely related to the previous step, it’s time to dig into individual line items. Yes, this can get a little bit complex. That’s why it’s crucial to define some of these items before you begin to actively build your budget worksheet.
In this step, you define exactly what channels should fall into each of the categories established above. For instance, one category might be your content marketing strategy. In that case, individual line items could be:
- Content creation costs
- Tools needed to manage your content
- Any freelancers you need for your SEO or content marketing efforts.
Within a social media marketing category, on the other hand, individual items might include:
- Social media management tools
- Paid digital ad spend
- Potential line items for LinkedIn prospecting subscriptions
- And more.
Whereas you need to stay general in step 3, this is your opportunity to get granular. Every potential budget expense should correspond to a line item defined within this step.
5. Choose Your Budgeting Template Software
You have all the variables you’ll want to plug-in ready. Now, it’s time to actually get to the execution.
At first, that means choosing exactly what software you want to use to create your budget workbook. You’ve probably heard of the two most popular options:
- Microsoft Excel, a comprehensive data analysis tool that’s part of the Office 365 suite.
- Google Sheets, the search engine’s direct Excel competitor that’s free for personal use, but a bit more limited in functionality.
Both can work well and if you have trouble deciding, look for the guides comparing the features of each. Ultimately, they’re similar enough that we’ll treat them as identical for the purposes of this tutorial.
Of course, you also have some other alternatives. Did you know, for instance, that Welcome (a project management platform at heart) also has planning and budgeting capabilities? But we’ll stick with Microsoft and Google for the time being.
7. Create Your Marketing Budget Template
In this final step, you have two options: download a template to use, or create your own from scratch. HubSpot, for instance, offers a free worksheet template for download.
Using a pre-established template comes with some challenges, though. You cannot easily customize it to fit your specific needs, categories, and channels.
Instead, especially if you’re willing to put in the time, it makes sense to set up your budget from scratch. That includes following these simple steps:
- Create a new workbook in your preferred spreadsheet software.
- Set up your categories in Column A.
- Under each category, set up your individual line items to give each its own row.
- Set up a SUM function to add up all items within each category, along with a total at the top that sums up every row.
Next, it’s time to work on the columns. If you plan monthly, like most marketing teams do, this tends to be the best setup:
- Each month gets two columns: Budget and Actual. That way, you can compare your total spend to your planned spend, and always know when you need to reconcile.
- Set up your columns according to your fiscal year. If it lines up with the calendar year, Columns B and C should be January, February should be in Columns D and E., and so on.
- After every three months, set up a Quarter-End double-column to sum them up. That allows for broader benchmarking than the granular monthly view.
That’s it. From there, you can add a few optional fields, like a “total planned vs. total spent” field that helps you easily see whether or not your spending too much or too little. Other potential additions include an express link to your marketing goal or an “owner” for each category who has budget responsibility for that section.
Ready to Optimize Your Marketing Budget Plan?
Yes, it can get complicated. But planning your marketing budget thoroughly is absolutely crucial. With a simple template like the above, you can put a basic plan in place to make sure you’re spending right and on target.
Of course, you can also save yourself some headaches by working with a planning tool like Welcome. In our system, your budget intersects directly with the projects and efforts working their way through your marketing pipeline. You don’t need an external spreadsheet but can plan and track it all in the same tool that tracks your work.
Ready to give it a try? Get started with a free Welcome account today.