Annual Planning: How to Spend the Budget You Get

Dec 13, 2016

By Laura Borgstede

In our last blog, Annual Planning: What Should Your Total Budget Be, Based on Revenue?, we provided counsel on how to come up with your Annual Plan’s marketing budget. Now we will tell you the fun part – how to spend It!

In the chart below, we take a look at the marketing mix percentages we recommend for B2B technology companies, and present an example of how an organization bringing in a revenue of $10 million would distribute the marketing budget.

Marketing budget chart.pngFor your business, you would simply adjust this chart with the revenue target for your company and multiply it by the percentage of revenue you would like to spend on marketing.

The marketing mix in the chart above must be personalized to help your company best meet your business goals. You may choose to forego traditional and digital advertising for content marketing and lead generation activities, for example. Or you may find that when planning to make a big announcement at an event, a higher investment in PR support is in order.

It's not a perfect science, but it gives you a starting point, with room to make adjustments based on your unique business needs. It doesn’t matter if your annual revenue is $100,000 or $1 billion, you are still able to apply this formula to figure out how much to attribute to marketing.

According to Hubspot, 28% of marketers say securing enough budget is their number one marketing challenge. Once your organization begins to the annual planning process, you may go in and ask for $1M for marketing, but you may find that there’s push back, and you only end up with $800,000, or even $500,000. In this case, you simply plug your new number into the chart above, as opposed to starting all over again trying to divide up a smaller pie than you originally expected. This serves as a more efficient way to determine how much of your revenue should be set aside for marketing, as well as how to divide that budget amongst the different marketing functions.

Of course, you may at that point decide that one of your program elements needs to be chopped completely to make sure you’re not cannibalizing the rest of your programs by not giving them the support and resources they need. It’s all about balancing what you have to spend across the programs you can’t live without. Happy budgeting!
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Topics: annual planning, marketing budget