8 Simple Steps for Creating a 2022 Small Business Marketing Budget
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A small business marketing budget is an investment of both time and money that, when done correctly, can exponentially grow your customer database. As with any investment, there’s a measure of risk. So how do you know if you’re making the best possible use of your advertising spend? We explain below how to create a small business marketing budget for 2022 in 8 simple steps.
1. Define Budget Needs
The first thing to do is define your goals and priorities. The point of developing a budget is to spend wisely and keep track of your marketing dollars. Remember, your marketing budget needs to fit within your overall business budget and should never be so high that it impacts your business’s ability to function.
Identify and prioritize both short-term and long-term business and marketing goals. If you already have marketing campaigns in the pipeline, be specific when budgeting for the goals of those campaigns. For instance, if a particular campaign’s goal is to generate leads, it will have different spending requirements than a campaign advertising a limited-time special offer.
Be sure your marketing plan accounts for the entire buyer’s journey. Think about what goes on behind the scenes of a successful marketing campaign. Market and competitor research will cost money, as will hiring a contractor to set up and evaluate your different channels (e.g., website, social media). If you fail to take these factors into consideration during the planning process, you might spend more than you should in the long run.
2. Determine Your Target Audience
Knowing your audience is critical to your marketing budget and goes hand in hand with defining your priorities. It will help you gauge how many people you’re trying to reach and the frequency necessary to generate the desired result. By segmenting your audience, you will be able to glean which types of campaigns are the most effective for which audience groups.
Direct mail coupons work well for businesses (like restaurants) that want to attract customers who live within a specific radius from their store or in the same zip code. Valpak’s neighborhood-targeted postcards are an affordable alternative to traditional postcards and mail to the same households as The Blue Envelope®. If you need to target a specific audience, solo postcards enable you to get your message out to your ideal audience with pinpoint accuracy. For instance, with Valpak, you have more than 300 criteria to select from, including age, income, home ownership, families with children and more. If your new to solo direct mail, . Mobile display advertising is like a digital postcard where your digital ads target mobile devices based on location, interest and intent.
3. Identify Marketing Channels
In one regard, this is an aspect of identifying your target audience. After all, you don’t want to waste marketing dollars on a channel your customers aren’t using. However, different channels will have different costs and not all channels will need to be used in the same way for every campaign. For example, a portion of your website spend might go toward mobile responsiveness, which your business should continue to do no matter what campaign is running.
Researching the channels you plan on using can also help you avoid surprise costs and overreaching your capabilities. Include or exclude channels based on your market research and plan to A/B test instead of blindly advertising on a channel and hoping it brings success. You should investigate all channels—digital, social, print— rather than making assumptions and choosing at random.
4. Plan Annually
Advertising success requires a long-term view, so plan your marketing strategy for the coming year, not month. While there will always be unexpected events you’ll want to capitalize on, identifying key holidays, seasons or other events that affect your business and advertising costs is important.
Take TV advertising in 2020. Competing for time slots was exacerbated by more people at home. Several events saw an increase in ad spend, including primetime sporting events and network programming. Political coverage also drove up prices, while events like the debates drew viewers from their normal viewing habits. Sometimes buying in advance can lower your advertising costs, but this isn’t possible if you don’t plan for future opportunities.
5. Research Opportunities
Go out of your way to explore what’s set to happen over the next year and how it impacts the marketing channels you plan on using. Co-op marketing programs are a great place to start if your business sells goods. In a nutshell, co-op advertising is when a manufacturer will pay a portion of a business’s advertising costs if they promote a certain product/product line. In some cases, they will provide images or graphics to use in the ad. Keep in mind that not all co-op opportunities last the entire year and the manufacturer may have some restrictions on which channel can be used.
Dismiss the fear of missing out (FOMO) by pinpointing opportunities you can afford to take advantage of. If you jump on something last minute, it could be out of your budget or much more expensive than if you planned for it. Or, you could miss the boat entirely.
6. Advertise Based on Potential ROI
All advertising should consider potential ROI. That means taking a big-picture look at your marketing goals. What are your advertising opportunities? Which channels do you want to use to reach different audience segments? What are the costs associated with each? Compare your intentions with past campaigns and the ROI those offered so you can select the best options.
There’s no one-size-fits-all path, nor is there a guarantee of marketing success. You also can’t afford to do everything. The data you’ll collect throughout each step will help you realize which tactics are most likely to be most successful.
7. Assess Total Spend
Many small businesses set their marketing budget according to what is left over after expenses are paid. Sometimes, on a month basis. While creating a budget can be time consuming (and, at times, frustrating), it’s crucial for staying on track throughout the year. So how much should you allocate toward marketing?
As a general rule, you should spend between 6 and 20% of your total annual budget on marketing, depending on how long your business has been in the market and your annual revenue. The marketing dollars you spend are often limited by other budgetary concerns. Look at how much your business has already been spending on marketing and compare that number to past results to help set total spend.
8. Set Monthly Spend
Align your total advertising spend with your marketing calendar. The amount you budget to spend monthly might fluctuate based on your needs at the time, or the needs of the calendar. Events, sales, special promotions and calendar holidays all affect your monthly budgets.
These steps are best practices to help you create a small business marketing budget that sets your business up for success. By aligning your marketing strategy and goals with your bottom line, you’ll execute each marketing campaign with confidence.
Start Building Your Small Business Marketing Budget Today
- Review your budget-building process. Compare it to the steps outlined above to determine if there are steps you’ve ignored or haven’t given appropriate attention.
- Ensure your budget realistically accounts for ROI so your revenue is improved by your marketing and your budget reflects growth.
- Take a close look at the channels you’re using. Is your audience using them? Are you trying to take on more channels than your business can support?
- Do you have processes in place to gauge whether your marketing is working? You should be able to adjust your marketing to your planned budget, if necessary, to avoid wasting money.
- Do you have a process in place for handling unexpected costs? For example, will you have the flex room to capitalize on real-world events that happen unexpectedly?
This is simply the starting point for a solid marketing budget. Continue expanding your knowledge base and find more tools to refine the way you spend your budget. Your local Valpak marketing consultant is on hand to help you with your 2022 marketing plan and budget, so give them a call today.