Defining your marketing plan cost or budget is essential. Every company should take the time to think about it as a part of their marketing strategy. But creating a marketing plan cost depends on many elements and it is difficult to define it precisely.

In this article, we give you all our tips for building your marketing budget and managing your investments.

Table of contents

Determine your marketing objective and budget

Establishing a company’s marketing budget is necessary for any project. Any agency you work with will need to know just how much money you have available. To do this, it is important to define your business goals and the objective you want to achieve. Make sure to develop an in depth business strategy before getting started.

Knowing your objective will help you define the amount of money and marketing budget you need to invest to achieve it.

Internal company analysis

Depending on your company’s positioning and marketing strategy, set objectives and evaluate what you need to achieve them. Monitor the marketing investments that have already been made. What has been the return on these investments and what are you missing to reach your goals?

For example, you may have invested in creating a website, but lack the content to generate traffic.

In this case, it will be necessary to invest in an SEO strategy and content production to make your website effective.

Therefore, take stock of your company’s current situation and make an estimate of the investments you need to make to achieve your new goals. This will give you an idea of the marketing budget you will need to spend.

Your competitors: a wealth of information for your marketing budget

Take the time to study your competitors in a competitive analysis. What are they doing? What is their digital strategy and on which channels are they present? Estimating your competitors’ marketing investments will give you an idea of the marketing budget to invest on your side.

You don’t need to be a digital marketing expert: search for your competitors and look at their website, their social networks, their Adwords ads, etc. Taking a look at someone else’s business plan might give you more information than a marketing consultant.

In summary, here are the questions to ask yourself:

  • What is my business missing to achieve its goals?
  • What are my competitors doing?
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Define your marketing project, its scope, and cost form

There are three elements that have a direct influence on the marketing plan cost of a project.

The type of project

Your budget will differ depending on the type of project you have to carry out:

  • Creating a mobile application involves an average budget of €40,000.
  • Launching an email marketing campaign can be done with a budget of €1,000.

The differences in marketing budget are therefore inherent to the type of project.

The scope of the project

Secondly, the budget will vary according to the scope of the project. Making a WordPress website for €3,000 is possible. But if you want a custom design and payment system, the cost will increase significantly.

So don’t be surprised to hear website budgets of €100,000. This applies to all types of projects! The wider the scope, the higher the budget.

The form of project cost

Finally, the marketing budget varies according to the cost structure of a project. The most striking is in the traditional media sector.

Before you start creating an advertisement, you will need to buy media space to run it. A TV ad can cost €40,000 for the media buy alone, not including the creative process. So there are two budgets to consider!

If you use a specialist agency, you should know that they will usually include media buying in their offer.

In summary, here are the questions to ask yourself:

  • What type of project meets my needs?
  • What is the scope of this type of project?
  • What is the cost form of my project?

The importance of a long-term marketing strategy and budget

Strategic marketing is thinking about your marketing budget in the long term. Some one-shot projects can be interesting but a marketing project is most effective in the long term. The idea is to see your marketing actions as a long-term investment.

Remember also that many projects will require follow-up. For example, for a website, monitoring will be required for maintenance, bugs, content updates, etc.

In summary, here are the questions to ask yourself:

  • Has my marketing project been thought through in the long term as a business plan?
  • Have I taken into account the additional and unforeseen costs that a project involves?

Analyse the financial situation of your company

This step should be carried out in coordination with all the departments of your company and not just within the marketing team. The marketing project depends on the means at your disposal and the potential return on the project in question.

Assessing your financial capacity for your marketing budget

Assessing the financial health of your company is essential for creating a strategic marketing budget. Analyse your turnover and available cash. If you do not have enough money, consider simplifying your project to make it more affordable. There is a trade-off between the quality of the project and the resources available.

Not sure how much to allocate to your marketing budget? Follow this quick and easy formula:

  • For a start up business (less than 5 years), the marketing budget can be up to 20% of its turnover.
  • For a business that has been active for more than 5 years and already has a market share, allocate up to 12% of its turnover.

This formula is not an exact science. It depends on your profile but it is a good starting point if you have no idea how much to allocate to your marketing budget. Just remember that the overall objective is to keep the company running smoothly all whilst working on business growth.

Projecting return on investment

Now that you have defined your project according to your financial resources, try to make a return on investment projection. Determine how your marketing project will affect your business, for example in terms of conversion.

Establishing an ROI will allow you to optimise your investment and manage your marketing budget. Also establish KPIs that are relevant to your objectives to monitor your marketing investments.

In summary, here are the questions to ask yourself:

  • What is the financial health of my business? What is the cash flow?
  • How will the project affect my business? Can we establish an ROI and KPIs?
  • What do my financial staff think?

Execution: should I do the project(s) myself?

The marketing budget will vary depending on whether you decide to carry out the project yourself or entrust it to marketing consultants or an agency.

Carrying out the project in-house requires the necessary resources to do so. On the other hand, entrusting the project to an agency has the advantage of greater flexibility and of benefiting from all the resources necessary for the success of your project. It is increasingly easy to find an agency that suits your needs and means.

If you want to entrust marketing plans to an agency, take the time to understand its remuneration system. This will make it easier for you to define an adequate marketing budget. As a reminder, most marketing consultants price between €50 and €150 per hour.

It is also possible to entrust part of your project to an agency, where its expertise is really essential, and to carry out the rest in-house.

In summary, here are the questions to ask yourself:

  • Do I want to do the project myself, entrust it to an agency, or seek advice from a freelancer?
  • If I use an agency, do I understand how it works?

Checklist for creating a marketing budget

In summary, here are all the steps you need to take to create a marketing budget:

  • Define your objectives.
  • Then define the type of project, its scope, and its cost structure.
  • Consider your project in the long term.
  • Analyse your company’s financial situation to find out how much money you have available.
  • Decide who will carry out the project: in-house or with an agency?

All these elements should help you to have a clearer idea of the marketing budget to allocate to your project.  If you are thinking of creating a marketing budget specifically in digital marketing, you may want to look more specifically at a digital marketing guide.

Let’s take an example of a marketing budget

Identifying the need

Let’s imagine a company with an annual turnover of €150,000. It has a website to increase its brand awareness and develop its business.

However, the number of potential customers and new customers is not increasing. Instead, they’re attracting the wrong audience. If its competitors are active on social networks and their websites are well referenced, the project type is obvious: investment in social media and SEO.

Identifying the scope of the project

Now that the 2 projects are defined, what would be the ideal scope? In which languages should the website be accessible, on which social networks should the company be present, and how often should it publish content?

All these elements must be taken into account when defining the scope of the project, and therefore the marketing budget needed to carry it out.

Long-term strategy

The project is part of a strategy to increase the visibility and sustainability of the company.

Financial means and ROI according to the project

We then analyse the financial health of the company and the potential impact of the marketing project. Let’s say that an annual budget of €30,000 can be allocated to the marketing budget. This marketing investment would result in a potential increase in turnover of €40,000, which would represent an ROI of 33% ((40,000-30,000)/30,000).

Choice of contractor

The company decides to call on an agency with expertise in social media and SEO, as it does not have the time or skills to handle these projects internally.

Marketing budget: Conclusion

In conclusion, different factors will influence your marketing budget. Your needs, the type, and scope of the project, your financial means, and whether or not you choose to use an agency. With the different practices explained above, we hope that you will be able to define your marketing budget more easily.