I recently listened to an instructive episode by Neil Patel and Eric Siu about how to set a marketing budget, and they gave pretty good insight on how it should go.
Neil began by saying he doesn’t “believe in a marketing budget”, meaning if you’re invested in something you give as much as you can if it’s working, and if it’s not working then tone down your expenses. Eric chimes in saying it doesn’t make sense to limit yourself and “The one that spends the most, is the one that wins”. Which is great if you have the funds to be so liberal with it, but if you’re a business just getting into the hectic world of marketing then a good place to start is 15% – 20% of your gross.
The key here is to spend it in the right areas, try some tactics like the ones mentioned in my other post based on Neil’s webinar. Once you have a ball rolling, analyse your marketing campaigns for areas of rapid growth and put your budget into those. Don’t stop financing a campaign that’s giving you a positive ROI, and don’t continue financing campaigns that aren’t giving you the results you want. It makes sense to have some kind of budget cap to assure your team you’re not blowing all the company funds on marketing, but when you have the opportunity to let your marketing budget be flexible, then that’s definitely the best way to go.