Stop Guessing with Your Marketing Budget
Most businesses approach their marketing budget backwards. They pick a number that “feels right,” spread it across a few channels, and hope for the best. This approach wastes money and leaves growth on the table.
A strategic marketing budget starts with your revenue goals and works backward to determine how much you need to invest to hit those targets.
The Revenue-First Approach to Budgeting
Start with your annual revenue target. If you want to generate $2 million in revenue and your average customer lifetime value is $10,000, you need 200 customers. If your sales conversion rate is 25%, you need 800 qualified leads. Now you can calculate what it costs to generate 800 leads across different channels.
This math-based approach removes emotion from budgeting and ties every dollar to a business outcome.
Industry Benchmarks for Marketing Spend
As a general guideline, B2B companies typically invest 2-5% of revenue in marketing, while B2C companies invest 5-10%. Growth-stage companies often invest 15-20% or more to build market share.
These are starting points, not rules. Your optimal budget depends on your competitive landscape, growth goals, and profit margins.
Allocating Across Channels
Don’t spread your budget across every channel equally. Concentrate spend on the channels that deliver the best ROI for your specific business:
- SEO — Best for long-term, compounding returns. Invest 20-30% of your digital budget
- PPC (Google/Facebook Ads) — Best for immediate, measurable results. Invest 30-40%
- Content Marketing — Fuels SEO and builds authority. Invest 15-20%
- Social Media — Brand building and community. Invest 10-15%
- Email Marketing — Highest ROI of any channel. Invest 5-10%
The 70/20/10 Rule
A smart framework for budget allocation: spend 70% on proven channels and tactics that consistently deliver, 20% on emerging opportunities you’re testing, and 10% on experimental approaches that could become your next big winner.
Track ROI Religiously
Every dollar should be traceable to a result. Set up proper attribution tracking, use UTM parameters for campaigns, and review performance monthly. Kill what’s not working and reinvest in what is.
Need Help Building Your Marketing Budget?
Brandastic helps businesses across Southern California build data-driven marketing strategies that maximize ROI. Get a free marketing consultation and we’ll help you allocate your budget for maximum impact.
