“Someone is sitting in the shade today because a tree was planted a long time ago.” - Warren Buffett
A new year is only a few months away. Now is the time to start thinking about your 2024 marketing budget. This year, Gartner reported that average marketing budgets are about 9.1% of total company revenue. They also reported that 86% of marketers said they were being tasked with making significant changes to “how the marketing function works to achieve sustainable results.” For many companies, that means investing in growing their organization’s marketing capabilities and capacity through technology, headcount, and outside partnerships. Marketing technology made up 25.4% of the 2023 budget allocation, labor 24.6%, and agencies 23.3%.
If you've adopted this growth mindset, thoughtful planning is critical. You will be the most successful with a long-term, forward-looking view. Your budget must reflect and account for your company's strategic plan, especially if you need to invest in new technology or outside partners. Too many marketing leaders find their budgets eaten up by reactive and last-minute marketing support because they fail to plan ahead. Here are some strategies for better budget planning for 2024.
Review Past Performance
No decision should be made without data to back it up. Start the budgeting process by evaluating your marketing activities and performance this year. Review KPIs for each marketing campaign, both overall and through individual channels like digital advertising or paid influencers. Pay specific attention to ROI when reviewing your marketing channels. Compare this year's performance to previous years, looking for trends. For example, many companies are experiencing less engagement through paid social media ads this year due to changes in the platforms' algorithms and content rules. As a result, they're prioritizing other digital channels for future digital advertising. This analysis will help you decide how to distribute your budget across marketing channels in 2024.
Set Clear Objectives
Your budget objectives should address any new business strategies your team will be tasked to promote in 2024. These strategies may include new product launches, expanding into new markets, or a rebrand. You should also set marketing and sales goals like increasing brand awareness, generating leads, boosting online conversions, or generating event attendance. By setting these targets early, you will have the time to identify the resources you need, plan workloads, and set aside enough budget to accomplish each goal.
Research Industry Trends
In a growth mindset, it's important to understand what your competition is up to, both in business and marketing. If your competition is planning a rebrand or an expansion, you may want to mitigate the potential loss of consumer attention with your own brand awareness campaign. It's also smart to stay up to date on the latest marketing trends and innovations relevant to your industry. Research emerging technologies, customer behavior shifts, and new platforms or strategies that could enhance your marketing efforts. Set aside some of your budget to experiment and test new approaches. Testing can assist you in making future decisions about your marketing activities without risking a large chunk of your budget.
Identify Priority Channels
Using your performance data analysis, assess which marketing channels have been the best at reaching your target audience and the most effective in delivering results. Assess every channel, including your earned, owned, paid, and shared channels. Make sure to analyze each channel through the lens of your marketing and business objectives. It is unlikely that one marketing channel will successfully achieve ROI for every goal. For example, your events may produce great ROI for lead generation but few sales. But your email campaigns may have a different result. Plan a good mix of channels where you can integrate messaging yet produce separate results (sales, brand awareness, or lead acquisition). Divide your budget based on the importance and potential return of each channel.
Assess Seasonality and Campaigns
Make sure to keep the calendar in mind when planning your budget. Review past campaign and sales performance to identify periods of increased demand for marketing. Create a loose campaign calendar for events and important activities (like product launches) you know are coming up. Start planning to allocate resources now and pinpoint where your team may need help. Distribute your budget based on this calendar to maximize the impact of your marketing efforts.
Evaluate Internal Capabilities and Outsourcing Needs
Assess your team's skills and capacity to handle the expected marketing activities for the new year. Determine whether you can handle everything in-house or if you need to outsource certain aspects such as graphic design, content creation, or digital advertising. Factor in any projects you know you will need outside assistance, such as printing, photography, or video. Budget for both internal resources and external partners, if needed. Give yourself ample time to fill the gaps in your capabilities or resources for the new year.
Set Up Systems to Monitor and Measure Performance
While planning, establish a system to measure KPIs for each marketing campaign and channel. If you are not already doing so, plan to track and analyze the performance of your marketing activities regularly. This will help you make data-driven decisions, optimize your budget allocation, and reallocate resources as needed throughout the year.
Determine Your Budget Allocation
Once you've done your research and set up systems for tracking, assign a portion of your budget to each marketing campaign and channel based on their expected ROI, your business and marketing goals, and your marketing calendar. Remember to set aside dollars for testing, technology, staff, and outside partners. You can allocate based on a weighted percentage of your total budget or the expected ROI. Or you could assign a specific dollar amount. The more detailed you are about where and how the budget will be spent, the easier it will be to analyze your spending and results.
Stay Agile and Flexible with Regular Reviews and Adjustments
Even with this level of detail in your planning, it’s important to recognize that your marketing budget may need refinement as the year progresses. Schedule periodic reviews of your marketing budget to evaluate effectiveness and adjust as needed. Keep an eye on market conditions, competitor activities, emerging business goals, and changing consumer behavior. Create an intentional testing schedule for new channels and tactics to keep ahead of the curve. Ask for feedback on your marketing activities from customers and partners. Learn from successes, failures, and testing. Be willing to optimize your budget allocation to maximize results.
A Note About External Partners
Sometimes "doing more with less" means asking for help. If your team is already stretched thin and you expect 2024 to be even more challenging, you can make a compelling business case for bringing in an external partner like Phase 3. A marketing agency is a smart investment for several reasons, including:
- Expertise and efficiency to your team: The best marketing agencies provide professionals with specialized skills and experience in various marketing disciplines, both traditional and digital. They are experts at integrating marketing campaigns through multiple channels. They can help you identify the most cost-effective marketing channels, optimize campaigns, and implement efficient processes. By leveraging their knowledge and experience, you can streamline your marketing efforts and eliminate wasteful spending.
- Strategic planning: A marketing agency can assist you in developing comprehensive marketing strategies and allocating your budget effectively. They are masters at thinking ahead. They can analyze your business goals, market conditions, and target audience to determine the optimal mix of marketing channels and tactics. This strategic approach ensures that your budget is allocated to activities with the highest potential for ROI and avoids unnecessary expenses on less effective campaigns and channels.
- Negotiating power and vendor relationships: Marketing agencies often have established relationships with other marketing vendors, like advertising platforms, media outlets, and other suppliers. They can leverage these relationships and use their negotiation skills to secure better rates, discounts, or added value for your marketing activities. For an even better bang for your marketing buck, find an agency like Phase 3 that houses many of these services (print, video, media buying) under one roof.
- Measurement and optimization: You can rely on your marketing agency to use powerful analytics and measurement tools to track the performance of your marketing campaigns. They can identify areas for improvement and help you make data-driven decisions to optimize your activities and increase efficiency. In the long run, they may actually help you save budget by focusing your resources on high-performing strategies and eliminating or modifying underperforming ones.
Choosing a reputable and reliable marketing firm that aligns with your business goals and has a track record of delivering results is critical. A thorough evaluation of their competencies, experience, and references is necessary for you to make an informed decision. Think of it as an investment in your company’s future. The right marketing partner will help you optimize your marketing budget while driving the desired results.
Plan to succeed in 2024 with a thoughtful, strategic, and well-researched marketing budget. Your future self will thank you. If you need a powerful partner to meet your 2024 goals, Phase 3 is here to assist. Contact us today to set up a discovery call.