Setting a Realistic Marketing Budget
- by Elaine Tibbatts
- •
- 28 Mar, 2025
- •
A Smart Approach for Business Growth
Creating a realistic marketing budget is essential for businesses looking to maximise impact without overspending. Whether you're a startup or an established brand, knowing how much to invest, where to allocate funds, and how to track ROI ensures your marketing efforts deliver real results.
Why a Well-Planned Marketing Budget Matters
A well-structured budget helps you:
- Avoid overspending while ensuring you invest enough for results
- Focus on high-impact strategies that drive engagement and conversions
- Track ROI effectively and adjust based on performance
Steps to Setting a Realistic Marketing Budget
1. Define Your Marketing Goals
Before you decide on a budget, identify what you want to achieve:
- Increase brand awareness
- Generate leads & new customers
- Boost website traffic & conversions
- Improve customer retention
Aligning your budget with clear goals ensures every pound is spent strategically.
2. Review Your Past Performance (If Applicable)
If you've run marketing campaigns before, analyse:
- Which strategies brought the highest ROI?
- Where did you overspend with little return?
- What channels (social media, SEO, email, PPC) were most effective?
Use this data to refine your budget and focus on what works.
3. Determine Your Overall Marketing Spend
A general rule of thumb:
- Small businesses typically allocate 5-10% of revenue to marketing.
- Growth-focused businesses may invest 10-20% for more aggressive expansion.
Your budget should reflect your business stage, industry, and goals.
4. Allocate Funds to the Right Channels
Distribute your budget across different marketing efforts:
- Digital Marketing: SEO, social media ads, PPC, content marketing
- Traditional Marketing: Print, direct mail, events, sponsorships
- Marketing Tools & Software: CRM systems, email automation, analytics
- Outsourcing vs. In-House: Do you need external support for expertise?
Prioritise the channels that align with your audience and goals.
5. Plan for Flexibility & Unexpected Costs
Marketing trends shift, set aside 10-15% of your budget for:
- Boosting high-performing campaigns
- Testing new strategies (e.g., influencer marketing)
- Addressing sudden industry changes
Being adaptable helps maximise opportunities without financial strain.
6. Track, Measure & Adjust Your Budget
Regularly review your spending and performance:
- Monitor key metrics (conversion rates, website traffic, ROI)
- Compare actual spending vs. budgeted amounts
- Reallocate funds to top-performing campaigns
A budget isn’t set in stone, adjusting based on data ensures ongoing success.
Need Help Creating a Realistic Marketing Budget?
Our FREE 90-Minute Marketing Planning Consultation will help you structure a budget that drives real results without wasting resources.
