6 Tips For Managing Your Advertising Budget
In the modern business world, it’s no doubt that most marketers have no experience in finance management. This is true because most of them are trained and experienced in developing marketing strategies to promote a business and not manage money. That’s the reason you’re likely to see marketers spending a lot of bucks just to win the heart of one customer. Even if a marketer has experience in budget allocation, most companies, especially startups and small businesses, lack enough marketing budget.
But the good news is that there are several strategies you can employ to ensure you get the most benefits out of your little marketing budget. You can also work with some of the best-rated advertising companies Manchester, if you’re in the area, or advertising professionals in your locality. Outsourcing your marketing functions from such companies will ensure you maximize your little budget so that you can realize high returns on your investment.
In this article, you’ll learn some simple yet effective tips that can help you manage your advertising budget. But before that, you need to understand what the marketing budget is. Read on to get enlightened.
Marketing Budget Defined
A marketing budget is an advertising or a promotional plan that sets out how much funds are allocated to the marketing department and how marketers intend to spend these funds. In other words, it’s an estimation of the amount of money that a business requires to promote its products or services.
A marketing budget includes all the promotional expenses like the cost of employing marketers, advertising costs, office expenses, website maintenance fees, and other market-related costs. A marketing budget helps managers make more informed calculations and decisions.
How Can You Manage Your Advertising Budget?
Set Realistic Marketing Budgets
One of the essential aspects of managing an advertising budget is to set a realistic budget. Depending on the performance of your business in terms of profits and losses, ensure your marketing budget is affordable.
Apart from setting an affordable budget, ensure that it’s sustainable throughout your marketing campaign period. For instance, if you plan to run your marketing campaigns for three months, ensure your budget can sustain you throughout this period.
Create An Effective Marketing Strategy
Most businesses get it wrong by trying out every type of marketing strategy without considering which techniques best suit their businesses. For that reason, they end up spending a lot of money only to realize none or little results. You can avoid that by creating an advertising strategy that can help meet your business needs.
Also, developing a well-thought marketing strategy allows you to invest only in platforms or avenues with the most significant impact. There are many advertising strategies you can use to market your business to help realize positive results. Some of these strategies include blogs, social media ads, digital content, paid ads, etc. Though all these strategies can positively impact your business, you need to find out which strategy works best with minimal resources and then invest in that strategy.
Re-Use Your Ads
There’s no harm in re-using your ads in the business, especially when running out of budget. Even if you’ve already achieved your objective through those ads, you can always consider re-using them.
While it’s a fact that most ads can become outdated within a short period, they can be re-used to target a new audience, where your ads will be treated as if they are new. However, to get the most benefit out of your old ads, you need to adjust them to fit the current market.
Determine Your Total Marketing Budget
Another tip that can help you to manage your advertising budget is to determine how much you’re willing and able to spend on your marketing functions. While most business owners think they shouldn’t spend money on marketing their businesses until they start making profits, that’s a wrong approach because most customers might not be aware of the existence of those businesses. This makes it hard for such firms to make any sales.
So, rather than asking yourself whether you should use money or not in promoting your new business, the question should be how much money you should use. There are many ways you can consider to determine your total marketing budget. For instance, if you’re a startup trying to penetrate the market, it’s recommended to spend less than 15% of your total capital on marketing.
On the other hand, if you’re already an established business, you can consider spending about 20% of your revenue. Spending 20% won’t hurt your business because you’ve already established a customer base. This means that you’re using some marketing strategies to engage your customers or to find new customers. But most importantly, when determining your budget, ensure that it’s affordable and sustainable.
Monitor Your Marketing Budget
All business expenses must be monitored, and the marketing budget isn’t an exemption. Keeping track of your marketing budget involves reviewing the allocated amount regularly to check your spending and make sure you’re not going beyond your budget.
So, when tracking your budget, ensure you’re not going over your daily, weekly, or even your monthly limits. You can monitor your budget using a simple excel worksheet, which should include your total budget, the money left, and the remaining number of days to the end of your marketing campaign. You can maximize finance software programs developed specifically for this task as well.
Know Other Hidden Costs
Finally, if you want to manage your advertising expense effectively, you need to understand that there are other hidden costs that can affect your marketing budget. So, it would be beneficial to establish all other expenses related to your products or services.
Some of these costs include operating expenses and other costs of running your business, such as water and electricity bills. Considering all these expenses when developing a marketing budget helps set a baseline for your return on investment. For instance, if your business spends USD$20 to produce product X, which will later be sold for USD$60, such information will be helpful when drafting your marketing budget. These details give you an idea of how much you should spend on your marketing efforts and still make some profits.
Marketing is one of the most important aspects of a business that shouldn’t be ignored. However, advertising without a budget might put your business at risk. This is because if you don’t set a limit, you can spend more money than you can get in terms of returns. So, to increase your return on investment, you need to keep your marketing budget at the minimum level, which can be achieved by following the above tips.