Managing the marketing budget is an essential part of marketing management. After all, marketers must carefully watch over the budget they have been allocated. Are they spending less? Then they haven’t gotten everything out of the budget. Are they spending more? Then they’ve managed their budget poorly. But how do you manage a marketing budget? In this article, I describe the three essential components of a marketing budget and give concrete examples of how to manage marketing budgets well.
A lot of marketers go retroactive with their marketing budget. At a certain point in the year, they make the sum of all expenditures, which is then their marketing budget. However, this is only one element of a marketing budget. Other marketers do plan their allocated costs, but in doing so manage only part of the marketing budget. Therefore, a professional marketing budget consists of 3 components:
Every marketer should therefore take into account these 3 components in the marketing budget. More precisely: at any moment of the year, you should have a status of the realized costs and of the budgetary margin that you still have (budget minus expected costs).
Below is a simple practical example of a marketing budget. The total budget (annual budget or marketing budget) is €20,000. That is further divided into €10,000 budget for advertising and €9,865 for general expenses.
Next step is to assign costs to each budget. For the general expenses, you can see in the example that we can allocate €8,102 at the beginning of the year. So we are definitely going to incur those costs. For advertising, this was little (only €250). This may indicate that the marketing team was not yet sure if they were going to make these budgets. So within the marketing budget of €20,000, €8,352 has already been allocated. We therefore have €11,513 free to spend on unallocated costs.
As soon as the invoices arrive, add them to the budget items and you can follow up nicely whether you have already received all invoices and if they correspond to the allocated budget. A well-designed Excel file can get you started, based on the example above. An alternative is to use a marketing planner such as Husky. This not only looks professional, it is also easier within a marketing team to manage a marketing budget within a tool specifically designed for this purpose.
In this example, you also notice that in Husky you can budget over the years. That way, you can quickly look back at budgets and invoices for past projects or campaigns. Another great advantage of a digital marketing budgeting tool is the ability to filter budget data and do targeted exports for management reporting.
No. If you only want to track real expenses, this is obviously fine too. Then you just leave the assigned budget blank when creating an expense. Nevertheless, I advocate using it as much as possible. Otherwise you get a distorted picture of your still available marketing budget.
We often get asked by marketers how they should deal with revenue from suppliers, for example. For example, there are wholesalers or retail marketing teams that "get" marketing budgets from brands or suppliers. These are then, of course, an integral part of your marketing budget. You can then start to think of them as a kind of negative cost. In other words, they are added to the budget.
Do you want to take a more professional approach to managing your marketing budget? Then don't hesitate to test Husky for free and simulate your marketing budget in a digital tool.