How to make a marketing budget for 2024

I’ve had the opportunity to develop marketing budgets for various companies – from startups and corporations to legacy companies and high-growth ventures. Now, I want to guide you in creating a marketing budget. While I can’t cover every scenario, the principles I’ll share have proven effective across different business stages and types.

Here are the key questions we’ll address:

  • How can you create a marketing budget, or work with an existing one?
  • What should be the size of a marketing budget?
  • How should a marketing budget be broken down?

How to make a marketing budget?

Creating a marketing budget is often not the challenge, as it is usually provided to us. However, it’s more beneficial to influence budgeting decisions. Try to influence the budget early and offer your assistance and advice to leadership before the budget is finalized. Voicing complaints about the budget after it’s been set serves no purpose and can be perceived as annoying.

Remember, marketing budgets are not set in stone. They can fluctuate throughout the year. If you propose viable ideas that generate revenue, it’s the leadership’s responsibility to invest in them. I typically don’t view the initial budget as a hard limit. It’s merely a baseline, and if additional opportunities arise throughout the year, I present them as potential growth investments.

When there’s no pre-existing budget and reliance on analysis isn’t an option, aim to secure as much as possible and be ready to adjust it throughout the year, while managing stakeholder expectations.

How much should your marketing budget be?

Your task is to analyze past initiatives, identify key success factors, and ensure they are budgeted for the upcoming year. Additionally, you should allocate extra funds for unforeseen expenses and for exploring new ventures, which we will discuss later.

A common guideline for marketing budgets is to increase them if they are genuinely promoting business growth, rather than merely consuming resources on agencies producing undistributed content.

How to divide a marketing budget?

Determining your marketing budget largely depends on the status of your company, particularly in the current macroeconomic climate at the beginning of 2024:

  • Thrive mode: Your business is growing despite or because of the economic climate
  • Survive mode: Your business is stable, but profits are not expected to grow at this point
  • Retreat mode: You’re hoping the recession ends before your cash reserves deplete

Your company’s mode in 2024 could be very different from its mode in 2022. Understanding this mode can guide how you allocate your budget.

If you’re in Thrive mode, your budget distribution should be around 40/50/10:

  • 40% of the budget is allocated to proven strategies
  • 50% of the budget is used for new marketing tests
  • 10% of the budget is set aside for unexpected opportunities and surprises

If you’re in Survive mode, the budget split should be 70/10/20:

  • 70% of the budget is allocated to proven strategies
  • 10% of the budget is used for new marketing tests
  • 20% of the budget is set aside for unexpected surprises

If you’re in Retreat mode and if you have any budget, the split should be 100/0/0:

  • 100% is allocated to proven strategies
  • Hope there are no surprises

From a business perspective, it’s wise to be in a stable position before investing in new marketing ventures in the current climate. These principles primarily apply to companies and organizations where marketing generates new business revenue.

How to defend your budget throughout the year?

When budget cuts loom, your marketing budget is often the first to go. It’s akin to shutting off airplane engines mid-flight to save fuel – it may save money in the short term, but it sets the stage for future problems.

Staying a step ahead is a critical strategy for any marketer. Here are a few ways to do this:

  • Keep an eye on the company’s financial decisions and atmosphere. Suggest your own budget cuts that won’t significantly impact revenue generation.
  • Be present or influence those making the decisions. Show them you understand the financial implications.

When budget cuts happen, you can respond productively instead of just complaining:

  • Use data to articulate how the cuts will impact the company.
  • Negotiate to retain some of the budget. The easiest cuts to make are not always the best. Be firm, but graceful, in your negotiations.
  • Ask for reassurance that management might invest in excellent ideas if you present them.

As you can see, this involves a fair amount of diplomacy: build positive relationships with those controlling the budgets, be gracious when facing cuts, but don’t be a pushover.

Budgeting period in the modern-day

I often discuss the yearly budgeting cycle. As a lean or agile marketer, I oppose this approach, but we can’t ignore that many businesses still operate on a yearly budget. The key is to adapt and succeed, not tackle the issue directly. Yearly budgeting provides a useful starting point, but anticipate budget cuts and increases. The former often comes from external sources, while the latter is your responsibility to generate.

It’s beneficial to secure a significant amount of money for an extended period. This way, you’re not confined to a monthly limit that could prevent larger long-term investments. Overly agile budgeting can leave you constantly requesting funds, with much of your work focused on securing money.

10 takeaway principles

  1. Influence the marketing budget early and offer assistance to leadership.
  2. The initial budget is not a hard limit but a baseline.
  3. Allocate extra funds in your budget for unforeseen expenses and exploring new ventures.
  4. Increase the marketing budget if it promotes business growth.
  5. The division of your marketing budget depends on the current status of your company.
  6. Defend your budget throughout the year by staying a step ahead and influencing decision-makers.
  7. Use data to articulate how budget cuts will impact the company and negotiate to retain some of the budget.
  8. Build positive relationships with those controlling the budgets and be gracious when facing cuts.
  9. Adapt and succeed in the yearly budgeting cycle by anticipating budget cuts and increases.
  10. Secure a significant amount of money for an extended period to allow for larger long-term investments.

And remember, money in marketing is like fuel. Spend it wisely and generously where it yields the best results.

Read more:

Losing your marketing budget is on you – and so is getting it back >

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