How To Plan Your Marketing Budget for 2025

Are you ready to tame your marketing spending? Well, buckle up, as it’s going to be a wild, fast-paced ride…through goal setting and spreadsheets.

You might be feeling a little extra pressure this year. After all, there’s a lot of financial uncertainty ahead of the economic forecast for 2023.

Juggling long-term and short-term growth and marketing goals are hard enough when it’s not an exact science. But now, a second recession in three years? It seems too much of a challenge.

Don’t give into the temptation of slashing budgets left, right and centre. You might cause more harm than good. Concentrating on containing costs can sabotage long-term performance and profitability if that’s all you focus on.

Maintaining a healthy budget AND setting your company up for growth this year is possible, and we can help you achieve it.

By following these steps, you can get on track to planning your marketing budget and, as a result, your strategy too.

1. Why Calculating Your Marketing Budget Is So Important

Successful marketing isn’t just about thinking like you’re in a chess game. And by that, we mean strategically.

Sure, thinking strategically is important, but planning and then adhering to a strict marketing budget can inform what your marketing strategy looks like.

But which aspects of your company should a marketing budget include?

Don’t be fooled, it isn’t just your in-house or outsourced marketing budget that needs a rethink. A marketing budget will include all your marketing expenditures and investments.

Here are some channels you could focus on for your digital marketing budget:

If you want to scale your business successfully — you’ll need an airtight marketing strategy based on your budget.

Like most things in life, this requires a delicate balance:

❌ Overspend on your marketing, and you’d be eating up too much of your revenue. Scaling your business becomes an uphill battle.

❌ Underspend and your business will struggle to scale up, as there won’t be enough new customers and revenue.

You’ll need to become the zen master of your own marketing costs.

In terms of growth, achieving an adequate balance means you’ll acquire new customers without eating up all your revenue.

So, you know now that having a market budget is key for growth, but why else might you need one? Well, there’s actually a lot you can get from a marketing budget.

Just take a look below.

The marketing landscape today is complicated and constantly changing. Tech advances in artificial intelligence and Google Analytics mean marketers constantly have to play catch-up.

Working out your marketing budget now will help you factor in the costs of funding new software and training.

2. How to Start Calculating Your Marketing Budget

In order to perfect your marketing budget, you’ll need to figure out which marketing tactics are serving you well and showing results. Everyone’s different, and so’s every business.

Factors which will influence calculating a marketing budget will depend on your business turnover, how aggressive your goals are and the competitive nature of your industry.

Defining Your Goals

When new clients partner with us at Thinkplus, we make sure we define what their organic growth goals are. Most companies have quite similar goals revolving around growth. After all, the only way is up!

Here are some common goals you might have (and some ideas on how to achieve them):

🎯 Your Goal: Increasing website conversion rate and maintaining conversions.

✅ Our Suggested Action: Our recommendation would be to give your website a thorough audit. You need to ensure you’re laser-focused on your target audience to fulfil your marketing goals.

Unsure where to start? Ask yourself these questions about your site in its current form:

Is each step of the customer journey clear? — Visitors to your site need to easily find all the information they need quickly and easily.
Are there lots of different calls to action (CTAs) on your site? — The more CTAs you have, the more likely it is your visitors will convert (up to a point). CTAs also help push people down the sales funnel, encouraging them to “act” and lock in that purchase.
What makes you stand out from your competitors? — Visitors should easily be able to understand what your unique selling point (USP) is and what problems your product/service solves for them.
And what about content… does it speak to your audience in the right tone?

The content on your site might also require improvement. Engaging copy written by a talented writer will increase your conversion rate if it speaks directly to the reader’s problems. Adding social proof (testimonials, reviews) will encourage users to trust your site, in turn increasing or maintaining conversion rates.

As an agency, we can help you with your website audit — you can even get a website review from us for absolutely zero cost. Nada. It’s free!

🎯 Your Goal: Improving SEO (search engine optimisation) rankings for your site.

✅ Our Suggested Action: We would conduct keyword research to find out which terms and phrases related to your offering have a high monthly search volume but not too much competition. Our SEO experts work alongside our content writers to create optimised content which will rank well in Google.

🎯 Your Goal: To grow your mailing list and get more email subscriptions.

✅ Our Suggested Action: Our recommendation would be to include lots of well-written calls-to-action on your site, which should ask users to subscribe to your mailing list.

In this day and age, people are slightly more hesitant about giving their email addresses away for nothing. Using something called a ‘lead magnet’ can help push an interested customer to subscribe to you. In exchange for a piece of valuable content, like an e-book or guide, the user provides you with their email address.

Financial incentives can work too, like offering 10% off for email subscribers.

🎯 Your Goal: Increasing exposure through the amount of new traffic and customers to your site.

✅ Our Suggested Action: If you chose us as your digital marketing agency, we would propose crafting a PR article. By generating newsworthy content that’s relevant to your offering, we can pitch this to trusted and popular sites to post. As a result, your company gains wider exposure in your industry and new traffic.

🎯 Your Goal: Customer retention. Making sure valued customers don’t look elsewhere.

✅ Our Suggested Action: Keep your present customers happy by offering them discounts and special offers on recurring subscriptions. Aligning your automated email campaigns to focus partly on customer retention can help. It’s all about maintaining a good relationship with the regulars, so marketing in their community spaces like Facebook will help you solidify that trust.

Understanding your goals helps you prioritise how you’re going to achieve them.

You may ask yourself, but how do I know what kind of marketing I need to focus on to achieve these goals?

This is why knowing who your customers are and your target audience is so essential. Invest time in researching your market to find out which channels your audience is interacting most with.

Let’s take a look at a marketing budget example:

You’re a sports nutrition brand who is expanding it’s product range by introducing a new energy drink alternative.
Your target audience is likely to be millennials and Gen Z’ers who watch a lot of content on TikTok, Instagram and YouTube.
You know that in order to maximise your success, you’ll have to use social media platforms to advertise this product.
That’s where most of your responsive audience is.

When you’re defining your goals, you need to be SMART.

Not just literally.

A SMART goal is an acronym which will help you produce a framework to define what your goals are. Using these parameters will enable you to drive greater impact with your objectives:

Specific — What’s a specific step you need to take to get closer to your organic goals this year?

For example, “I want to increase my email conversions this year.”

Measurable — Quantify your goals so it’s easier to track progress and completion.

For example, “I want to improve my email conversions by 10% compared to last year.”

Attainable — Is your goal realistic and something your team are able to achieve this year?

For example, “I want 3% of my email conversions to come from a certain new product.”

Relevant — Why are you setting this goal?

For example, “I want to improve my email conversions in order to make more sales on my site.”

Time-Bound — Keep on track to measure the success of your goal within a designated timeframe.

For example, “By December 2023, my email conversions will have improved by 10%.”

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Calculating Your Marketing Budget

I know what you’re thinking — but how can I physically calculate a marketing budget?

There’s no magic formula. But, there is a good method of working it out. Look at your estimated revenue for 2023 (based on past years) and decide on a percentage of that revenue you want to spend on your marketing.

We recommend that at least 10% of your gross turnover should be set aside for a campaign to be successful.

Take your chosen percentage and break it down further. You’ll need to split this percentage and allocate it to each channel according to your priorities for spending. Remember, your marketing budget doesn’t have to be fixed. Plan your budget around seasonal fluctuations in business and busy sales periods, spending a little less in quieter times.

History has a funny habit of repeating itself (unfortunately). Historical data can be pivotal in helping you plan your marketing budget this year. Look at last year’s marketing budget in the economic context to help inform you. You can even go back further in time, comparing previous budgets and economic environments to work out a benchmark figure for this year.

Communication

“The single biggest problem in communication is the illusion that it has taken place.” — George Bernard Shaw.

Lack of communication is a bit of a big deal. Lots of companies (we’re naming no names) have got into the bad habit of teams working independently from each other.

If the marketing team is disconnected from the sales team’s goals, how does the marketing team plan a budget?

The marketing team needs to know what each channel’s goals are for the year in order to allocate funding.

Although communication across all channels is essential, an alignment between sales and marketing is crucial when optimising your marketing budget. Sales and marketing can review together who the target audience is, create unified goals and collaborate on content.

In budgeting season, you’ll also need to work closely with your finance team.

Pay close attention to their economic forecasting and the financial state of your company — your business may depend on it!

Understanding the Customer Journey

In marketing, the simple analogy of a funnel can help you understand the customer journey.

When we use the term ‘customer journey’, we’re referring to the series of interactions your customers have with your brand, online and off. This starts the moment a customer notices your brand, becomes interested in your brand and begins to want your product.

A marketing funnel is an easy way of visualising a customer’s path — from awareness to action. You can read more about it here or look at the diagram below.

In order to visualise the AIDA model better, we’ll look at an example.

ATTENTION: You’ve released a revolutionary affordable acne product that will zap spots overnight with the efficiency of a dog catching fallen food off the dinner table. You put out an Instagram ad showing how quickly people can see results.
INTEREST: A spot-troubled student views your ad on Instagram and wants to know more. They’re still at uni, so they don’t earn much money. They want to know how much it costs and if it’s the best option for their sensitive skin.
DESIRE: The student reads multiple positive reviews and notices a 10% discount code is viable on their first order. Your product is already affordable, but this is an extra incentive.
ATTENTION: Now, the student is convinced and has decided to purchase your product.

Marketing funnels can track a range of customer interactions, showing every moment you connect with your customer throughout their purchasing journey. Conversely, this can also show you where you might be losing customers.

Taking time to invest in this research will highlight the following:

☑️ Which channels bring the most valuable to spend your budget on
☑️ Which platforms reach your target audience
☑️ What messages resonate with your target audience
☑️ The type of content your customers engage most with
☑️ The kind of problems your customers have and what solution you can offer which will convert them.

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Analysing and Optimising Data

After you’ve researched your market and the customer journey, it’s time to get the magnifying glass out.

You need to look closer at which channels to prioritise.

For example:

If half of your audience is going to be found via Google search, then you’ll know that SEO and content marketing require the majority of your budget.
If the majority of your audience is going to be found on Instagram or TikTok, you’ll know social media needs as much as your budget as possible.
High bounce rates and low conversions on emails might show it’s time to reduce your email marketing budget.

The Customer’s Digital Experience

In 2023, you need to put the customer’s digital experience at the top of your marketing budget list.

Year-on-year, people are consistently spending more and more money online — which means digital marketing has never been more important. Part of being a successful marketer is to adapt to consumer trends as much as possible.

In 2020, 96% of consumers increased their online video consumption. In 2022, over half of consumers surveyed said they want more video content from brands they like.

Post-pandemic, the shift towards online shopping is set to continue. Video shopping (seeing products in videos online) is set to continue as an eCommerce trend, with TikTok predicted to have 834.3 million users worldwide in 2023.

For context, that’s more than double the population of the United States. If you haven’t already, it’s a wise move to set aside some of your budget for video advertising.

Still doubtful about the power of online marketing?

Love ‘em or hate ‘em, take a look at the huge financial and marketing success of these two online influencers.

Rethink, Recycle and Repurpose

Before you start stressing about what you need, consider what you already have. Conducting a resources audit and inventory can highlight areas to invest in or areas to cut your costs. It’s a good idea to calculate and break down all your expenditures before you take a closer look.

Let these questions stew a little in your marketing brain:

Do you have the right talent on the right teams?
Are your teams organised in the right way?
Do your teams have all the best tools and software to support your marketing strategy and goals?
Do you have a marketing team to work with?
Do you need to outsource the expertise of a digital marketing agency?
Oh, and while you’re here… when was the last time you did a content audit?

Your website is probably the most important component of your marketing strategy. You already own all of these assets, so it’s worth investing time in improving content efficacy. Go back to high or low-performing pages and blogs and use search engine optimisation software (SEO) to look at refreshing this content with new keywords.

By updating your content, you’re providing your customers with more up-to-date information and potentially moving your content up the search engine results page (SERPs).

It’s all about maximising value from your marketing budget.

Where Else Can I Cut Costs?

Another way to cut your costs is to revaluate and deprioritise marketing channels which aren’t performing well.

By using tools like Google Analytics, you can see which content is performing best, traffic to your site, sales and conversions and more. Keep the channels that work. Cut your budget for channels which are underperforming, or get rid of them completely.

Hiring a Digital Marketing Agency

In a lot of cases, hiring a digital marketing agency can work out as more cost-effective than having your own in-house marketing team. The initial costs might put you off, but they will pay dividends long-term.

Hiring your own marketers means you’ll have to pay them, pay for software they’ll need and, in some cases — train them. All of this costs a bomb.

Many digital marketing agencies have years of experience under their belt and are specialists within their field. Hot on maximising value and brainstorming fresh, new ideas, a digital marketing agency like ours can save you time and money. For starters, you won’t have to pay for expensive digital marketing software — we’ve got it all.

If you’ve discovered that certain channels aren’t performing well enough, an expert agency like Thinkplus can help you deliver a positive ROI (return on investment) and a powerful marketing strategy.

3. Finalising Your Marketing Budget

With a constant onslaught of new ideas and technology, it might be tempting to try something new with your marketing. Why not experiment?

Well, ahead of the current economic climate, it might be an idea not to put all your eggs in one basket. Especially if that basket doesn’t exist yet and no one knows if it can hold eggs or not.

You can optimise your budget and test new ideas by using the 70-20-10 rule.

70% of your budget goes towards proven and tested strategies you’ve found from past data (demonstrated ROI)
20% of your budget goes towards new strategies aimed at growth
10% of your budget is allocated to experimental strategies.

Applying this rule means the bulk of your marketing budget is spent on channels that drive positive ROI but leaves some pennies for strategic experimentation. Your budget needs a degree of flexibility, shifting between long-term and short-term goals.

We’ve given you a lot of ideas by now, but if there are two things you should take away from how to plan your marketing budget, it’s being flexible but persistent.

Although you need to adapt as the market shifts, you absolutely must, MUST keep spending money on your marketing.

Why?

When an economic curveball like the potential recession hits, this can be a time of unparalleled opportunity. Some of your competitors won’t adapt, and some will cut their marketing budgets. Don’t risk sacrificing your market share to your competitors.

Look at data weekly to constantly evaluate your performance and make the changes you require. Adaptability is key. You can’t change the weather, but you can certainly dress for it.

If you want to know more about marketing in a recession and how to nail your mindset and strategy, watch the video below.