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How Do You Allocate Your Marketing Budget

Most marketing managers get excited about advertising campaigns, social media strategies, or technical SEO, but they’re less thrilled when budgeting season comes around.


Sure, it isn’t glamorous, but budgeting is at the heart of your marketing. And it comes down to one thing: planning to spend your money on the ideal marketing channels.


This article is a mini guide for allocating your marketing budget. It will help you find the right starting point and guide your budget allocation journey.


Keep reading for a short and sweet guide, or download our free ebook that dives deeper into the topic.

How to allocate your marketing budget

Before allocating your marketing funds, you must know your overall marketing budget. You determine your marketing budget according to your goals and how much you’re willing to invest.


According to a Gartner survey, companies spent around 9.5% of their total revenue in 2022. While you may shrug at this figure – given that every company is different – it’s a good benchmark you can use to plan your marketing budget.


For example, a startup looking for fast growth may employ a more aggressive approach. It’s common for startups to invest 15-20% of their revenue in their marketing.


Your marketing budget depends on what you’re trying to accomplish, how much you have to spend, and your sentiment on market trends. Still, your marketing budget will likely fall between 8-12% of your overall revenue.

Marketing budget allocation in 6 steps

You’re ready to allocate your budget once you’ve decided how much you plan to spend on your marketing. Essentially, you can break down your allocation process into 6 easy to execute steps.

1. Your Marketing Goals

Before you set out to do anything, you must have clear goals. Budgeting is no different. You must define and clearly articulate what you’re trying to achieve.


You’ll want to write down SMART goals and tape them to your computer screen. They will serve as your true north throughout your marketing budget process. It’s the most critical step on this list because it should guide every budgeting decision you make.


SSpecific: choose only a few goals and explain them clearly and concisely

MMeasurable: your goals should be measurable and preferably trackable

AAchievable: look at where you are now and imagine what is achievable

RRealistic: your goals must be relevant to your company, and its overall success

TTimely: goals are just goals if you don’t set a time limit on them



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2. Your long-term goals

What does success look like to you? Where do you want to be by the end of the quarter? Where should you be by the end of the year


Asking yourself these questions will help you decide which marketing channels will help you accomplish your goals. Keeping long-term goals top-of-mind is an excellent way to guide your budgeting process and help you make the proper allocation decisions.


You should also reevaluate your buyer’s journey and sales funnel and determine where you need to improve most to obtain your desired results.

For example, if you want to increase your website conversion rate, you may need outside help to optimize your sales copy and customer touchpoints.

3. Your marketing tactics

Before you allocate your marketing budget, you must use the right tactic. One simple budgeting tactic that works for most budgeting scenarios is the 80-20 rule.

The rule tells us to:

4. Your potential ROI

Knowing your future ROI is challenging, even when using the most advanced scenario planning methods. Still, you can look back on your company’s past performance and get a good idea of how much you’ll make if things remain the same. While it won’t be exact, it should give you a good estimation.


From there, you can add your future costs. They should be linked to your goals and what you want to improve. Here are some things to consider:


  • Will you hire new talent?
  • Will you add to your marketing stack?
  • Will you spend more on PPC ads?
  • Will you spend more on content creation?
  • Will you attend events?

5. Your marketing spending: allocated

After gathering all the above, you’re ready to divide your marketing budget. Remember to make your SMART goals the deciding factor that guides your allocation process.


Here are some of the channels you’ll have to consider:


  • SEO
  • Web design
  • PPC ads
  • Email marketing
  • Advertising campaigns
  • Content writing
  • Social media marketing
  • Copywriting
  • Networking events


Marketing is an ever-evolving thing that includes many variables and moving parts. Similarly, budgeting is not a constant. It’s a time-consuming experiment that requires patience and a good deal of foresight.

6. Stay on track

You’ve allocated your budget, so now what?


You have to track your spending. It’s the only way to see if your budget allocation was effective.


Track the right key performance indicators (KPIs) to stay on top of your budget in real-time.


Here are 7 marketing budget KPIs you should track:


  • Sales growth
  • Customer Acquisition Cost (CAC)
  • Customer Lifetime Value (CLV)
  • Return On Ads Spend (ROAS)
  • Return On Marketing Investment (ROMI)
  • Lead Conversion Rate
  • Conversion Rate by Marketing Channels

Optimizing your marketing budget with MARMIND

Building a marketing budget is challenging when you don’t have the right tools. MARMIND is the only MRM that combines planning, budgeting, and tracking in one intuitive platform. From workflows and spending limits to tracking KPIs and AI-driven resource allocation, Marmind makes budgeting easier and streamlines your entire marketing effort.


But don’t take our word for it. Marmind made the highly exclusive 2022 Forrester WAVE report.

Last Thoughts

Unfortunately, there isn’t a perfect formula for allocating your marketing budget. But the steps above are excellent for finding a formula that works for your company.


It’s your job to key in on that sweet spot that will optimize and grow your marketing effort.


Peter Fechter

Peter Fechter

Peter is Digital Marketing Manager at MARMIND and mainly responsible for website and lead management. When he's not busy creating content, he is developing new strategic approaches for campaign planning.

In this video, we show you the 5 main features of MARMIND’s budget & cost module – and how it can be used in the best way for your marketing purposes: