How Much Should You Spend on Marketing in 2023?
When deciding how much to spend on marketing, it’s important to look at the target revenue for your business. The higher your revenue targets, the more diverse your marketing mix should be. A start-up with a limited budget should carefully choose where to spend its budget and build a strategy around three to four cohesive campaigns. Meanwhile, established companies should deliberately add channels and diversify their reach to create an enhanced customer experience. When determining the right marketing mix, scenario planning is an effective way to hedge your bets during turbulent times.
If you’re thinking about expanding your marketing budget in the coming years, consider performance marketing. This channel has the potential to build brand authority and introduce a new pool of high-quality leads. However, it should not be the only part of your marketing strategy. If you want to maximize its impact, you should also consider other strategies, such as bottom-funnel tactics and funnel stretchers.
Diversification of your marketing mix
As a business owner, it’s important to consider a wide range of options for diversification. Some strategies include horizontal diversification that leverages existing competencies, while others focus on expanding operations into a new market. Diversification can also mean partnering with domestic and global producers to increase your reach. On the other hand, it can also mean increased costs as you expand into areas that you are not yet familiar with.
Diversification also means working within a budget. By utilizing different sources of supply, you can create competition that benefits your customers and reduces your expenses. By providing more options, you can offer more competitive pricing and better quality products. In addition, you can build relationships with multiple suppliers, which can lead to innovation.
Budgeting for marketing
As the start of each new year draws near, marketing teams look ahead to the upcoming year’s budget. To get the most bang for the buck, marketers should focus on creating a balance between what works well year after year and what is competitively beneficial. By defining a “must have” and “nice to have” list, organizations can plan their budget accordingly. However, unpredictable economic factors can cause unforeseen wrinkles in even the most carefully laid plans.
One of the key trends to consider when budgeting for marketing in 2023 is omnichannel marketing. This type of marketing integrates multiple channels and mediums to create a positive brand experience for consumers. In addition to advertising, marketers should also pay special attention to their tone and voice, messaging, and content. This means that budgeting for all these elements is crucial.
Marketing budgets can vary from five to twenty-five percent of revenue, depending on the size of the company, its stage of growth, and the impact that marketing has on sales. A general rule of thumb is that companies with high growth targets should budget between 15 and 30 percent of their projected revenue.
To create a successful marketing budget, it’s essential to understand what your company goals are. The best way to do this is to understand your buyer’s journey, which involves the steps that an audience takes from a prospect to a paying customer. Knowing this information will help you create a targeted strategy and establish goals that work for your brand.
Another factor to consider is the ROI of marketing. Historically, marketers spend seven to ten percent of their revenue on marketing. Today, this percentage is closer to six percent, according to a Gartner CMO survey. If you do not allocate your marketing budget as a percentage of your overall budget, your competitors will.