A well-planned marketing budget is essential for efficiently allocating resources to the most effective digital marketing channels and maximizing the impact of your campaigns.
But where should you begin when it comes to managing and tracking your budgets?
Businesses typically allocate between 2% and 5% of their revenue to marketing efforts in order to promote their products and services. While it may not seem like a significant amount, it’s crucial to use your working capital wisely. Regardless of the size of your marketing spend, you want to ensure that every penny contributes to raising brand awareness and promoting your offerings successfully.
When it comes to marketing spend, you and your executive team undoubtedly want to see tangible results and a clear return on investment (ROI) from your marketing efforts.
To take control of your marketing budget, consider the following steps:
1. Determine the most effective marketing channels: Whether it’s video, social media, blogging, events, or above-the-line advertising, evaluate which channels are likely to deliver optimal results. Conduct research, engage with your customers, and focus on the channels where your target audience is most likely to interact with your brand.
2. Understand your marketing spend across different channels: Each channel in your marketing strategy should demonstrate its value. However, determining how much to invest in each channel can be challenging. Seek insights from other marketers in your industry, examine industry benchmarks, and estimate a reasonable allocation for each channel. By totaling the costs for each channel, you can calculate your overall marketing spend. Ensure that this figure aligns with the planned percentage of your revenue designated for marketing.
3. Calculate projected revenue and profit: While you can’t predict exact outcomes, establish revenue targets for each channel and set clear goals for financial and non-financial ROI. Consider factors such as the number of customers each channel is expected to attract, its impact on cash flow, and the desired effect on your revenue and profits.
4. Track marketing spend in your cloud accounting: Modern cloud accounting platforms simplify the recording and tracking of marketing costs. Monitor your marketing spend by channel, product, or cost code to obtain a detailed breakdown of your expenditures. This data enables performance tracking over time, granting you complete control over your marketing budget.
5. Manage data and make informed decisions: By combining data and reporting from your cloud accounting and marketing software, you gain valuable insights for informed decision-making. Analyze where you allocate the most marketing budget, identify channels with the highest conversion rates, and track the progress of your spending. This information empowers you to improve ROI and enhance your overall digital presence.
Discuss Tracking Your Marketing Spending with Us
If you want to delve deeper into tracking your marketing spending and evaluating the ROI it generates, schedule a consultation with us. We can assist you in setting up new cost codes in your accounting software, refining your marketing budgets per channel, and customizing your dashboard and management information. With comprehensive financial and non-financial data at your fingertips, you’ll be equipped to make informed decisions and optimize your marketing strategies.
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