From adopting an agile strategy to creating a budget buffer, here are the 11 answers to the question, “What rules should you follow when creating a marketing budget for 2023?”
Adopt An Agile Strategy
There’s a certain dynamism to the customer needs, as they change and evolve over the course of literal weeks. Keeping up with those changes would require creating a strategic plan for expenses that could be best described as agile. Marketing teams need to be in sync with other branches, such as finance or sales so that goals can be met despite alterations to previously laid plans and courses of action that required both slight or larger changes. When the market is anything but stable, you want every penny to count.
Know Your Objective
Creating marketing budgets regardless of external market and environmental events demands one to know their ultimate objective. It will save you time and money, including unnecessary learning curves, down the road.
If you’re planning to adhere to marketing activities and campaigns that worked in the prior year, make sure to consider applying them again if they served beyond a situational need. If you’re targeting new audiences and market spaces, establish a firm budget for those spaces rather than creating a fluid and flexible budget that can result in overruns due to a marketing experiment yielding unknown results.
Make sure to break down the budget by line items and activity which makes it easier to assess whether some sub-activities need to be modified for the coming year instead of nixing the entire activity because it requires more financial finesse for justification. Knowing the company mission helps with refining the objective when tracing budget dollars to results.
Allocate Budget for Investing Towards Programmatic SEO
There have been numerous updates to Google’s algorithm over the years and websites have evolved in the way they generate content. One of the recent fast-growing techniques to attract large search traffic is to produce a large number of pages programmatically related to their business. This is done with dynamic elements instead of manually creating them.
The best example would be Zapier, they’ve created numerous landing pages for each app (Google Sheets, Notion, Gmail..) and blogs on the same allowing them to rank for many keyword combinations and long-tail keywords as well. They’re well above $100M ARR and more than 50% of their traffic comes from searches.
Marketing teams need to leverage programmatic SEO to draw traffic in bulk with no compromise on the quality of the content. This requires significant time and effort to brainstorm, plan the content, capture the audience, and has to be well planned out.
Monitor Your Competitor’s Results and Plan Accordingly
When creating a marketing budget, it is important to consider the goals and trends in your industry. While not all industries or companies have the same needs, it’s worth taking into account which trends have worked for other organizations in your field so you can better plan out how much money will go toward your advertising efforts!
Industries that experience higher levels of growth often use social media platforms such as IG, Tiktok, and LinkedIn for their campaigns while those with slower rates may only spend on AdWords each day just because they know what works best based on other organizations’ successes and experience with these types of strategies.
Consider both the short-term and long-term ROI of each marketing channel you plan to make campaigns for.
Focus on Data Not HIPPO (Highest Paid Person’s Opinion)
Marketing budgets are a crucial part of any marketing strategy. To make sure that the budget is effective, you need to look at customer insight and data to make decisions based on attribution tools to understand how your best spend your marketing dollars to achieve ROAS. That means at the end of the day you have to remove HIPPO “Highest Paid Person’s Opinion” and let the data decide where next year’s dollars go.
Brian Hawkins, Marketing Manager, GhostBed.com
Always Consider Changing Media Patterns
Most of the marketing in this day and age takes place on online platforms. And just like every other thing, online platforms change, grow, or even lose popularity. This is why you should always consider the changing patterns on the online platforms in your budget.
The best way you can do this is by measuring the past. What losses did you make during 2022 that were attributed to media changes and technology? Where did you go wrong in marketing on social media in 2022? This will help you incorporate a budget to cater to sudden shifts in online platforms.
Also, it will help you diversify into more than one online platform. It will help you realize which online platform benefited you the most, and which was a waste of time.
Focus On ROI and Ensure Flexibility
Marketing budgets can be tricky to create at any time but 2023 will see some challenging market conditions that we haven’t seen for many years. But there are a few rules of thumb that can help you stay on track.
First, accurate tracking is essential. You need to know how much you’re spending on marketing and what kind of return you’re getting on your investment. For most online-focused businesses this means making sure your analytics is in good shape. Without accurate tracking, it’s impossible to know if your marketing budget is effective.
Second, focus on metrics and ROI. What goals are you trying to achieve with your marketing budget? How will you measure success? By focusing on metrics and ROI, you can ensure your budget is directed toward activities that will produce results.
Finally, don’t be afraid to adjust your budget as needed. The landscape is constantly changing and your budget should reflect that. If you’re not seeing the results you want, don’t be afraid to make changes.
Revise Your Current Budget First
When creating a marketing budget for 2023, pay attention to the one you followed in 2022 or previous years. Take a look at the old goals, objectives, and methods of achieving them, and then evaluate the effectiveness of your efforts in these areas. Evaluate how the money was spent and whether you achieved your goals. Or do you have nothing to boast about? Both successes and failures provide knowledge and insight, indicating what you should target in the new year.
Consider such metrics as conversion rates, internet traffic data, bounce rates, or lead generation. Anything that reflects your business’s KPIs. Until you do this, you won’t be able to figure out your ROI, and you won’t know what’s working or what’s worth giving up. Instead, you will be shooting in the dark when deciding on a budget amount.
Your new budget should refer to the old one while improving what passed the test and abandoning what didn’t work.
Make Sure Your Budget is Realistic and Achievable
My one rule for creating a marketing budget for 2023 would be to make sure that your budget is realistic and achievable. Too often, businesses will set their budget too high or too low, which can lead to problems down the road.
Instead, try to think about what you really want to achieve and then map out a budget that will help you get there. It’s also important to be flexible with your budget so that you can adapt as needed throughout the year. By following these tips, you’ll be able to create a marketing budget that works for your business in 2023!
Base Your ROMI On CLV & Not On 2023 Revenue
When calculating your return on marketing investment (ROMI), do not base it on the revenue you get from that customer in 2023.
Let’s say in 2023, you have a customer acquisition cost (CAC) of $100. And in 2023, that new customer brings you $100 in revenue. At first, you might think this is a ROMI of $0. However, your customers (more than likely) buy from you more than once. Therefore, when they buy from you again in 2024, 2025, etc, the revenue that the customer brings you keeps growing while your CAC remains at $100.
Always Create a Buffer
Marketing budgets are typically the first to be cut. You always need to be mindful of that and almost expect it each year as your budget for your programming.
Most companies will not allow you to include a line item in your budget for excess money so I always like to pad my initiatives with an additional 5-10% as a way to ensure my programs will be executed regardless of cutbacks. This buffer will also allow you to keep some activities in your back pocket that you can execute if you do get to hold onto your entire budget.