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Marketing Budget Template

Tackling the Marketing Budgeting Process


Are you spending enough on marketing? According to a recent survey of ours, if you're like many of your colleagues, the answer is no. Our recent survey showed that 42% of marketing budgets fall below the 5% of revenue mark. In fact, only 38% of companies spend an adequate amount on marketing by global standards and only 36% of companies felt you spent enough to be successful by your own standards.
That's not a pretty picture of the marketing budget situation you must be facing. As we enter the year, we are faced with establishing and validating the money we plan to spend, and are often perplexed with how to approach it. Some of you are simply handed a budget from management. Others are given a percentage of past or projected revenue, while others still are told to submit a plan for budget approval. In reality, there is only one place to startthe Strategic Marketing Plan. Once you understand the goals and strategy around your marketing efforts, you will be much better prepared to establish a budget. With that said, there are three approaches to the budgetary process that you should consider...and they are not mutually exclusive. Top Down

With the top down approach, you start with a budgetary number that "comes down" from finance or upper management. You have $X to spend and you take this number and allocate the funds into months. To do so, take a look at your company's seasonality (are there months that require higher marketing activity than others), sales quota distribution, and sales cycles. We recommend you ask your management team for a commitment to a percentage of revenue for your "top down" budgetary number. This keeps marketing more aligned with the revenue goals and prevents the dollar figure from being some arbitrary number that can be increased or decreased at whim. Instead, it should only be adjusted when revenue expectations are also increased or decreased. As a guideline, our survey shows that most companies spend between 3-5% of revenue on marketing, with marketing driven companies spending between 10-15%. If you are launching a new product, or are expecting to launch into a new market or territory, expect to spend approximately 20% of revenue to fund that program.
The general guideline for using the percentage of revenue approach is 8-10% of revenue should be spent on marketing, with approximately 5% of that going to labor (either for a department, or outsourcing to a marketing firm). What percentage you use is determined by a number of factors, how mature is your market (how much education do you have to do), how well known is your company in your industry (are you a new or established business, how much brand awareness do you have to do), and how fast do you intend to grow, just to name a few. Once you've received a commitment from management on your percentage of revenue each month, calculate the "allowed" monthly budget for marketing.

Bottom Up
Once you've established your top down numbers, set it aside and review the budget with a bottom up approach. That is, look at the specific activities you are planning to launch, the frequency you're planning to launch them, and then calculate the costs for each item in the month it is scheduled. You will want to segment this into several key categories for ease of reporting and tracking (i.e. Staffing, Brand Materials, Collateral, Web Site, Promotions, and PR) and add each activity under the segment it applies to. Once you've calculated the "true" costs of your proposed programs, compare with the top down numbers. Then let the negotiations begin.

Projected ROI
In every budget negotiation, talks always come back to one thingWhat's the Return? Though it is often very difficult to calculate in terms of conversion to sales, there are techniques you can use to validate your marketing plan before you implement it and these same techniques can also be used to measure it during and after execution. To calculate a marketing plan's expected ROI, you need to compile the same key assumptions in a Return on Investment Calculator (try our ROI Calculator, which you can download at www.gotomarketstrategies.com/roicalculator.htm). From there you should be able to ESTIMATE how many leads your program should generate (given messaging, right mix of vehicles, appropriate target market, solid product offering, etc.), how many customers you should convert, and therefore your projected return on investment.

The budgetary process is something we "creative" marketing folks sometimes dread, and as a result do not spend enough time thinking about it. But with a solid strategic marketing plan, the above budgetary approaches, and the following Marketing Budget Template, you will have the resources and direction your company needs to build your marketing budget.

104064511.xls.ms_office

Template provided by: | www.gotomarketstrategies.com | inforequest@gtms-inc.com (c) 2008 Go-To-Market Strategies. All rights reserved.

Marketing Budget: % of REVENUE

Year: 200x

Instructions: Type your forecasted revenue for each month into the Revenue cell. Your proposed budget will be calculated based on the percentage entered in the Marketing Budget % cell. You can adjust the percentage up or down, depending on the agressiveness of your business goals. For example, if you're looking for moderate growth in the coming year and are an established business you can adjust down to 8%, however if you are expecting agressive growth and/or are a brand new business, you will want to adjust up to 15%.

Jan

Feb

Mar

April

May

June

Revenue

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Total Budget Proposed

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

ANNUAL REVENUE:

$1,050,000

ANNUAL BUDGET:

$ 105,000.00

July

Aug

Sept

Oct

Nov

Dec

% of REVENUE:

10%

Revenue

$70,000

$80,000

$90,000

$100,000

$200,000

$300,000

Total Budget Proposed

7,000.00

8,000.00

9,000.00

$ 10,000.00

$ 20,000.00

$ 30,000.00

104064511.xls.ms_office

Template provided by: | www.gotomarketstrategies.com | inforequest@gtms-inc.com (c) 2007 Go-To-Market Strategies. All rights reserved.

7/21/2012

Marketing Budget

Year: 200x

Instructions: Detail each activity by month. Customize the line item to align with your marketing plan! Review the Budgeting article prior for help with the budgeting process. For an estimate as to how much you "should" expect to spend, use the Budget Model sheet in this workbook to calculate and then reference it to this sheet to see how far off you are.
JAN STAFF OR SERVICES (I.E. CONSULTING) Salaries Benefits STAFF SUBTOTAL $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 FEB MAR APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL

JAN BRAND Letterhead Envelopes Business Cards Presentation Folders Other (click insert/row from menu) BRAND SUBTOTAL $0

FEB

MAR

APRIL

MAY

JUNE

JULY

AUG

SEPT

OCT

NOV

DEC

TOTAL

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

JAN MARKETING MATERIALS (COLLATERAL) Brochures/Datasheets White Papers Other (click insert/row from menu) MARKETING MATERIALS SUBTOTAL $0

FEB

MAR

APRIL

MAY

JUNE

JULY

AUG

SEPT

OCT

NOV

DEC

TOTAL

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

JAN WEBSITE Hosting Design/Development Other (click insert/row from menu) WEBSITE SUBTOTAL $0

FEB

MAR

APRIL

MAY

JUNE

JULY

AUG

SEPT

OCT

NOV

DEC

TOTAL

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

104064511.xls.ms_office

Template provided by: | www.gotomarketstrategies.com | inforequest@gtms-inc.com (c) 2007 Go-To-Market Strategies. All rights reserved.

CONFIDENTIAL

JAN PUBLIC RELATIONS Press Releases Media Relations Wire Fees Press Kits Other (click insert/row from menu) PUBLIC RELATIONS SUBTOTAL $0

FEB

MAR

APRIL

MAY

JUNE

JULY

AUG

SEPT

OCT

NOV

DEC

TOTAL

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

JAN PROMOTIONS Advertising Events Promo Items Direct Mail (print and email) Telemarketing Prospect Lists Other (click insert/row from menu) PROMOTIONS SUBTOTAL $0

FEB

MAR

APRIL

MAY

JUNE

JULY

AUG

SEPT

OCT

NOV

DEC

TOTAL

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

JAN TOTAL $0

FEB $0

MAR $0

APRIL $0

MAY $0

JUNE $0

JULY $0

AUG $0

SEPT $0

OCT $0

NOV $0

DEC $0

TOTAL

Annual Total

$0

104064511.xls.ms_office

Template provided by: | www.gotomarketstrategies.com | inforequest@gtms-inc.com (c) 2007 Go-To-Market Strategies. All rights reserved.

CONFIDENTIAL

Marketing Budget

Year: 2006

Instructions: Detail each activity by month. Customize the line item to align with your marketing plan! Review the Budgeting article prior for help with the budgeting process. For an estimate as to how much you "should" expect to spend, use the Budget Model sheet in this workbook to calculate and then reference it to this sheet to see how far off you are.
JAN STAFF OR SERVICES (I.E. CONSULTING) Salaries Benefits STAFF SUBTOTAL $7,500 $1,000 $8,500 $7,500 $1,000 $8,500 $7,500 $1,000 $8,500 $7,500 $1,000 $8,500 $7,500 $1,000 $8,500 $7,500 $1,000 $8,500 $7,500 $1,000 $8,500 $7,500 $1,000 $9,000 $1,400 $9,000 $1,400 $9,000 $1,400 $9,000 $1,400 $96,000 $13,600 $109,600 FEB MAR APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL

$8,500 $10,400 $10,400 $10,400 $10,400

JAN BRAND Letterhead Envelopes Business Cards Presentation Folders BRAND SUBTOTAL $475 $150 $400 $600 $1,625

FEB

MAR

APRIL

MAY

JUNE

JULY

AUG

SEPT

OCT

NOV

DEC

TOTAL

$475 $150 $400 $600 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,625

JAN MARKETING MATERIALS (COLLATERAL) Brochures/Datasheets Printing Content Development (Whitepapers/Brochures) $1,500 White Papers Collateral Design MARKETING MATERIALS SUBTOTAL $2,500 $4,000

FEB

MAR

APRIL

MAY

JUNE

JULY

AUG

SEPT

OCT

NOV

DEC

TOTAL

$837 $1,000 $50 $50 $1,000 $50 $1,000 $50 $1,000 $50 $1,000 $50

$837 $6,500 $300 $2,500

$887

$1,000

$50

$1,000

$50

$1,000

$50

$1,000

$50

$1,000

$50

$10,137

JAN WEBSITE Hosting $60

FEB

MAR

APRIL

MAY

JUNE

JULY

AUG

SEPT

OCT

NOV

DEC

TOTAL

$60

$60

$60

$60

$60

$60

$60

$60

$60

$60

$60

$720

104064511.xls.ms_office

Template provided by: | www.gotomarketstrategies.com | inforequest@gtms-inc.com (c) 2007 Go-To-Market Strategies. All rights reserved.

7/21/2012

Design/Development Enewsletter Distribution Search Engine Submission WEBSITE SUBTOTAL

$5,000 $299 $8 $5,060 $68 $8 $367 $8 $68 $8 $68 $299 $8 $367 $8 $68 $8 $68 $299 $8 $367 $8 $68 $8 $68 $299 $8 $367

$5,000 $1,196 $88 $7,004

JAN PUBLIC RELATIONS Press Releases Media Relations Wire Fees Press Kits PUBLIC RELATIONS SUBTOTAL $675 $1,175 $500

FEB

MAR

APRIL

MAY

JUNE

JULY

AUG

SEPT

OCT

NOV

DEC

TOTAL

$250 $500 $175

$250 $500 $175

$250 $500 $175 $675

$250 $500 $175

$250 $500 $175

$250

$1,500 $3,000

$175

$1,050 $1,350

$425

$500

$425

$500

$425

$1,175

$425

$500

$425

$500

$425

$6,900

JAN PROMOTIONS Advertising Events Promo Items Direct Mail (print and email) Webinar Telemarketing Prospect Lists Google Adwords PROMOTIONS SUBTOTAL $500 $500

FEB

MAR

APRIL

MAY

JUNE

JULY

AUG

SEPT

OCT

NOV

DEC

TOTAL

$3,000 $1,100

$1,737

$3,000

$1,737 $590

$4,650

$1,650

$1,737

$1,737

$1,737

$21,485 $1,690 $0

$144

$439

$258 $420

$144

$439

$258 $420

$144

$1,826 $840

$2,000

$2,000

$2,000

$2,000

$2,000

$10,000 $0

$300 $0 $4,400

$300 $4,181

$300 $3,739

$300 $4,885

$300 $5,370

$300 $4,094

$300 $2,476

$300 $4,295

$300 $2,457

$300 $2,444

$3,000 $38,841

JAN

FEB

MAR

APRIL ####

MAY ####

JUNE ####

JULY ####

AUG ####

SEPT ####

OCT ####

NOV ####

DEC ####

TOTAL

TOTAL $20,860 $9,880 ####

Annual Total

$174,107

104064511.xls.ms_office

Template provided by: | www.gotomarketstrategies.com | inforequest@gtms-inc.com (c) 2007 Go-To-Market Strategies. All rights reserved.

7/21/2012