The run-up to Christmas and New Year is renowned for many reasons: mince pies, fairy lights and television adverts that have budgets rivalling Hollywood blockbusters. However, in the wonderful world of marketing, the end of the year is also synonymous with one other activity: allocating the following year’s budget.
As well as being daunting, this process is one of both precision and conjecture – having to guess at the most effective methods without having a firm grasp of the trends of the coming twelve months.
We look at this for our own projects and to understand (and answer) our clients questions. This is how we think about this.
1. Identifying your marketing budget
The Small Business Association recommends that start-ups and SB’s should set aside roughly 3-5% of gross revenue for marketing, whereas more established companies should allocate 2-3%. Of course, the higher your turnover and profit, the more you can, and should, spend on marketing. Organisations with a revenue of over $5 million are advised to dedicate around 7-8% to it. These amounts are intended to cover all marketing costs, including staff, agency fees, advertising costs and outside suppliers.
2. Setting your marketing budget
Before doing anything else, the initial step in developing a marketing budget is identifying where your business is, and this should be conducted in the most ruthless, dispassionate, Claude-from-The-Apprentice way possible. This assessment should also take into account where you stand personally, as well as a marketing unit.
If, during your assessment, you come across individuals or systems that have become unaligned with your core goals, they need to go. The aim of this exercise is to ensure you can adapt, modernise, and move forward with your customers in mind.
3. Budget for People
Finding and recruiting talented marketing professionals is one of the most important steps in allocating your budget, particularly in sectors like demand marketing, where trends and technology are changing rapidly.
The best people to bring on board are those with new skills, new ideas and untapped knowledge that you don’t already have access to within your company. Their fresh insight is key to being able to ride the ever-changing tides of effective marketing, but, and this is important, will be useless to you unless you respect the expertise they bring.
This can be in-house either FTEs or contract roles or outsourcing to an agency.
4. Budget for Digital
Marketing specialist Guy Kawasaki famously said “If you have more money than brains, you should focus on outbound marketing. If you have more brains than money, you should focus on inbound marketing”. This is a very useful proverb to live by, but whichever description you decide your company fits, chances are that the vast majority of the marketing you engage in in 2017 will be digital.
The CMO council has estimated that more than a third of CMOs will allocated 75% of their marketing budget to digital endeavours in the next five years. As well as this, it is also estimated that around 60% of a marketer’s time is devoted to digital activities. Basically, whichever way you slice it, digital marketing should be at the very top of your agenda when it comes to budget allocation.
5. Budget for Content Marketing
Largely a branch of digital marketing, content marketing has become increasingly prominent in the last five years, and ignoring its influence is a perilous game to play. It is a common counter that brands don’t have the budget to spend on content marketing, but allocating your budget is the perfect opportunity to ensure that it does include content marketing for 2017. It is estimated that right now, customers spend 50% of their time engaging with custom content, and that content marketing generates three times as many leads as traditional, outbound marketing. It really isn’t going anywhere but up.
Brands often also find that they are put off content marketing due to the difficulty of measuring its ROIs, and subsequent losing of faith in its effectiveness. When executed properly, measuring the results of a content marketing campaign can reveal much more than you’d expect, most of which is extremely worthwhile.
6. Budget for Social Media and Social Media Marketing
As huge as social media is right now, it’s only predicted to get huge-er in the coming years – predicted to grow to 24% of marketing budgets, up from its current 10%. There’s just no escaping the fact that social media is the main source, for an overwhelming amount of consumers, of news, inspiration and information. Getting your brand seen on the right channels and by the right social audience is nothing short of invaluable.
Within the social sphere, video content is expected to dominate 2017 – it is predicted that over 74% of all internet traffic next year will be in the form of video. Harnessing this as a large part of your social media marketing strategy is a very smart move indeed.
And for a few extra pounds, you may wish to amplify your organic reach with some clever demographic, geo or people based targeting.
7. Budget for connecting with your Audience
Let’s get one thing straight – brands no longer decide what their audiences want to be told.
The age of pushing out strategic marketing campaigns to your customers are over – 2017 should be the year you focus on following your customers’ buyer journey, and develop a marketing plan that taps into it.
Here’s a little hint: buyers are online. And not just online buying. They are online following the news, online socialising, online shopping, online blogging and, most importantly, being exposed to and interacting with influencers.
8. Budget for Influencer marketing
Influencers, namely recognised, online personalities with active, large and engaged followings are possibly the most valuable, but somehow still underestimated marketing tool that should be involved in your budget for 2017. Working with the right one, a company can reach the kind of honed, and engaged potential customers that it never could before, and, what’s more, actually get them to buy into its brand more wholeheartedly than ever before. This is because influencers have what most marketing campaigns would kill for: the undivided attention of their audiences.
2017 is a new year – will you be trying new marketing initiatives?
So when working on your marketing budget this year, why not make 2017 is the time to think outside the box, and refine your strategy for the better? Think video, think content, think influencer marketing.
Talk to us if you need some help!