It’s that time of year again. The weather begins to cool, the leaves change color, and you have to create a budget for an entire year of marketing. Whether your focus is high growth, percentage of sales, or competitive parity – creating an annual budget is one of the most complex parts of any marketing executive’s job. To help, we’ve compiled a list of items to consider as you work through your budgeting process.
Overlooked Marketing Budget Line Items
When thinking about your department’s financial needs, take a moment to consider the operational expenses you might have overlooked last year. These are line items that keep your marketing engine moving but can quickly add up.
- Website maintenance: Keep your CMS (content management system) core and any website plugins up-to-date to keep your site secure and running smoothly, with no bugs. While this is important for all businesses, it’s critical for e-commerce businesses with an online store. Every minute your site is down results in a revenue loss from a missed sales opportunity.
- Non-traditional and digital advertising: You can have a great looking website that convinces visitors to convert, but it doesn’t matter if people don’t visit it. Prioritize measures such as pay-per-click and social media advertising in your budget to drive visitors to your site. 72 percent of people click on Google ads when they’re looking to buy something online, and with U.S. social media ad spending expected to surpass $72 billion this year, your organic marketing tactics might be fruitless if you’re not willing to pay for visibility.
- Stock images and custom photography: Companies large and small use stock photos, and most stock photo sites are subscription-based. If you want your visual content to stick out, you’ll have to pay an additional cost for ‘premium’ images. Sometimes stock photos aren’t enough, especially when your product or products are showcase items or stock photography doesn’t work with your industry. Plan ahead for any custom photography you may need including products, solutions, locations or even key staff members.
- Miscellaneous: Expect the unexpected. Like every year, there will be impromptu requests, one-time projects, or changes to the company. To avoid blowing your budget, it’s important to have a “miscellaneous” category – or even just a line item under another category – for unforeseen expenses. Planning for unexpected circumstances in your budget now helps avoid scrambling to handle them when they pop up.
Review Last Year’s Budget
Make space in your budget for items specific to your company or strategy. You can narrow down these areas of interest by reviewing last year’s budget. Determine the ROI on each item to figure out where you should invest more dollars. It’s also important to think about your targeted areas of growth; make sure your budget reflects these so you can achieve that growth this coming year.
Hiring Employees or an Agency
One of the most impactful considerations on your budget is whether to hire full-time employees or a marketing agency to reach your goals for next year. While both a full-time employee and an agency will have to be onboarded and learn your brand and product, here are a few additional considerations for each:
Marketing teams: Employee vs. Agency
- Ingrained in your internal language, which could be beneficial, but also detrimental
- Likely specialized in a certain area of expertise
- Dedicated solely to your company
- Paid the same no matter how much is produced
- Difficult to scale if more specialties or time than the employee has is needed
- Benefits add to the cost of a full-time employee and expertise comes at a high cost
- Adds a valuable outside perspective along with industry knowledge
- Usually has multiple skill sets under one umbrella
- An agency has many clients they need to focus on
- Only pay for the time they’re working for you
- Scalable to add more responsibilities to agency workload
- High-value for the annual cost with their expansive expertise
Consider Opportunity Costs
Finally, as you plan your year, remember to factor in opportunity costs and trade-offs. You can save money by skipping an industry conference or trade show – but, you might lose in the long term by missing out on valuable contacts that could lead to sales. Another major trade-off is using a marketing automation tool like HubSpot versus manually conducting, tracking, and reporting marketing efforts. While an automation platform may seem like a significant monetary investment, the alternative of having a staff member manually perform those tasks can cost more time and money.
Get the most out of your marketing budget. Contact us and the AAC team can help answer any questions you may have.