5 Tips to Plan and Manage Your Marketing Budget for 2023

Staff WritersMarketing AutomationMarTech Insights

By Mahika Bibiyan Last updated Jan 13, 2023

Creating the marketing budget for 2023 can be a challenging task for profusely ideated marketers. Wondering why? Imagine this. You are sipping coffee with your marketing team on a mundane Monday morning, waiting for the right idea to hit like caffeine. Your brainstorming session usually lasts a few minutes before settling on an idea your team deems fit for the infamous ‘client approval’.

As your team shoots ideas left and right while decoding the brief, one suddenly stands out. The idea hits the bullseye in terms of the concept, but one major issue surrounds the room. And finally, a pragmatic marketer pops the question, “Sounds great, but do we have the marketing budget for this?”

As the question gets tossed around in the brains of marketing masterminds, reality strikes hard because, at the end of the day, the game isn’t just about thinking strategically. It’s about sticking to the marketing budget already set either for the quarter of the year and ensuring the most cost-effective one that will promise the return on investment your brand really needs, making the marketing budget for 2023 a crucial aspect of your marketing plan.

How To Create a Marketing Budget For Your Company?

The marketing landscape of today has become tricky to tackle because of its dynamic nature. Creating a marketing budget for 2023 with an economic recession lingering on marketers’ heads may be tough to pursue.

According to Deloitte’s Annual CMO Survey, annual budgets are likely to ramp up by 3.9% as compared to last year owing to more emphasis on the marketing plan. In a HubSpot Survey of 1,000 marketers regarding the marketing budget, around 48% of them reported that their budget would experience an increase for the year 2023.

In order to calculate the marketing budget percentage for your company, you can add internal (teams, departments, and contractors existing within the company) and external expenses (outside investments including events, and training costs) to be divided by the revenue of the total marketing investment the company indulges in. Therefore, the formula for marketing budget percentage as guided by Fajen Consulting can be derived as:

Internal + External Expenses / Total Revenue = Marketing Budget Percentage for a specific period of time (ideally quarterly or annually, depending on the business objectives)

An adequate marketing budget assists in setting benchmarks for the amount of money that can be allocated to all marketing-related projects and activities. It enables companies to justify the budget according to mainly the two-fold requirement:

Firstly, allocate resources as per the requirement for priority or regular projects for various brands. These resources could be to design and produce campaign properties, publish on desired platforms, and also to boost its reach.
Secondly, to allocate funds for software developments essential to carry out campaigns of specific brands and also for projects to come.

5 Tips To Create a Marketing Budget for 2023

In the year 2022, the average marketing budget was estimated at around 10% of a company’s revenue while a common rule of thumb recommends B2B and B2C companies to spend a minimum of 2-5%, although it may vary from company to company.

Our marketing head at Martech360 recommends the best time to formulate and lay down a marketing budget is during Q4 of the ongoing business year for either quarterly marketing budget plans or annually; predominantly depending on the business model and marketing strategy of your business.

Even though the marketing budget for this year should have ideally begun in the year 2022 itself, don’t worry, we got you! You can still make amends to your overall budget before the beginning of the financial year 2023 and save yourself from the upcoming quarters.

Here are the top 5 things we recommend that every business should consider before planning the marketing budget for 2023:

Calculate all costs at all costs

Over the years, the attention span of every user has dipped down to near about 10 seconds. Hence, it is vital to optimizing the SEO budget while setting objectives and key results strategy to focus on better strategic alignment.

Calculate all your costs and keep a track of your expenses to avoid overspending or underutilization of funds. For long-term growth, shift your focus to organic media marketing by using SEO optimization to help your content rank higher.

While managing multiple marketing projects at once, it can become a struggle even for marketing masters to juggle them. Hiring a reputed marketing agency can assist in eliminating challenges to reach marketing goals quickly and with increased efficiency.

Don’t cut down costs, allocate resources

Instead of cutting down your costs, allocate resources to platforms performing well for your brand. There are various marketing costs that require investments in marketing software tools, freelancers to implement marketing strategies, advertising efforts, and resources necessary for content creation to be published on marketing channels for maximum conversions on your website.

Observe the needs of your customers and cater to their requirements as the market evolves. Every company’s costs vary so it’s important to understand the right focus of your brand based on its strengths and weaknesses. Allocate resources to platforms performing well for your brand to help gain a chunk of market share quickly.

Prioritize conversions on your website and redesign if need be

By optimizing the content on your website, try and shift your focus to generating traffic onto your assets and improving your brand visibility. But the picture doesn’t end there. It’s also important to transform your website into being conversion-focused.

If your website is still unable to generate successful leads, redesign your website to cater to the needs of your audience. If required, hire a marketing agency or a reputed website developer to figure out how to efficiently optimize your website. It’s your biggest asset; maintain it well!

Align your sales team with your marketing team and strategize accordingly

With the competitive landscape getting increasingly aggressive with their marketing strategies, it’s important to ensure that your sales team is on board with your plans and has the vision to succeed with feasibility.

Both the sales and marketing teams can review and update buyer personas, keep regular checks on work status and create unified goals for the year 2023. By achieving the goals set by the sales team, the marketing team’s goals will automatically be accomplished as well.

Optimize your budget by monitoring the market and scaling results

Don’t put all your eggs in one basket. Instead, try to optimize your budget according to your business goals. Keep only 10-12% of your budget on experiential marketing while the maximum budget should be focused on existing strategies to help your brand grow.

Keep adapting to the dynamic business environment by checking up on trends. Monitor the market and scale your results accordingly. Be flexible for short-term and long-term goals that can be adjusted if the need arises. Identify the metrics, KPIs, and the ROI against them with an agile approach to your marketing plans.

2023 Marketing Budget Essentials for Small Businesses

As the economy recovers in the year 2023 post the pandemic, more startups have begun entering the market, making small-size businesses compete with one another. On the other hand, the success of startups and small businesses has rapidly dropped due to smaller budgets and limited financial resources in hand.

Nonetheless, the 2023 marketing budget for small businesses can still be tailor-made efficiently with respect to the nature of the business, its objectives, and the estimated revenue of the business. It’s important for small-sized businesses to develop an airtight marketing strategy. Here are some tips for the same:

It’s essential to conduct an in-depth analysis of the industry, followed by setting clear and “SMART” marketing goals which are directly measurable and specific.
Potential costs that may occur require slight adjustments in the allocation of the marketing budget for 2023.
It is important to consider all costs associated with the marketing plan including website development, social media marketing, traditional media, newsletters, etc.
Since small businesses do not have the excess financial resources or capacity to develop their strategies, it’s vital to keep a track of costs and adjust the budget according to the need.

Marketing Budget: A Friend Or A Foe?

In spite of factors that lie outside the control of companies, forming a marketing budget is integral for a business to survive. The marketing budget is, therefore, deemed as a friend for businesses to manage the funds efficiently. Especially in the year 2023, digital customer experience has become one of the most celebrated aspects in marketing owing to rapid digitalization taking place in the world.

So, the next time you sit alongside your marketing buddies, gently remind yourself and your teammates to focus on asking important questions in relation to the viability of executing them. If an idea requires more budget than the stipulated amount allocated, do modify it for a later time when the company has the funds to swing it into action. Until then, stick to your strengths and adjust your budgets to achieve the desired results.