Marketing is undoubtedly important, it is the basis for the success of any business. Without good marketing, no one will know about your business or product and therefore no one will buy it. Given this importance, companies tend to create and plan a marketing budget in which they allocate a stand-alone amount for marketing and promotion of their products and services.

When it comes to spending money, you don't just take money out of your wallet easily, there are calculations that need to be done to make sure you don't waste some calculations needless creating a successful marketing budget requires some arrangements and calculations that must be taken into account first. And in the following lines, we provide you with a comprehensive guide to everything you need to know about the marketing budget.

Why should you invest in marketing for your project?

We mentioned at the beginning that marketing is essential to the success of any business. There are important factors that give it the importance it deserves, and help you achieve your business goals, such as:

Build awareness

Marketing helps you build brand awareness for your company. It provides ways and means to make it easier for the product to reach the target audience, by informing people about your product and telling them why they should acquire it, what purpose it serves specifically, and how they can benefit from it. It also contributes to building the reputation and image of the company and creating credibility that makes customers feel safe and makes them continue to invest and spend their money on the company's products.

Increase Sales

With a well-thought-out marketing plan tailored to your business, you will notice a significant increase in sales. This is self-evident, as that marketing plan acts as a link between the product and the customers who need it, by targeting that category of customers using various marketing tools and strategies.

Continuous communication with clients

The role of marketing is not only to attract customers to you but also to maintain their loyalty to the brand and the continuity of being customers of it. This is done by building a close relationship with them and staying in constant contact by alerting them to new offers and deals, and informing them of news of their favorite brand and its new products using e-mail marketing , for example.

Achieving growth and expansion

Marketing is the first way to achieve growth and help expand business activities. Marketing efforts are constantly working to expand the customer base by reaching more active customers. This, in turn, gives an opportunity for business to expand and flourish in new areas.

  • Design and development of a brand website
  • Social media marketing campaigns
  • Email marketing campaigns
  • Creating marketing content to publish on the website and social media platforms
  • Publications, TV ads, newspapers, and magazines

Operational costs, which include the costs of tools and software used in implementing marketing plans, wages of employees carrying out marketing work, and anything you spend that contributes to marketing work are also included within the marketing budget.

The importance of the marketing budget

Any business needs to have a special marketing budget to ensure its success. The marketing budget can be thought of as a map of the company's funds, specifying where, how, and how much it is spent. To preserve the company's financial resources, and benefit from them without wasting. The importance of the marketing budget does not stop there only, but the other the them theme of many other points such as:

1. Track expenses and invest money properly

A marketing budget gives you a detailed statement of how much money you have for your project, what has been used, what has been used, and what you have left. This helps you keep track of the company's expenses and see if there is an area that you overspend on or an area that needs to spend more. Finally, be able to make the required adjustments to rebalance the budget. Thus, you protect your business from failure, as a result of bankruptcy or lack of sufficient financial liquidity to manage it.

A marketing budget also helps you make the right decision about your next investment move, such as prioritizing one thing over another, or even holding off an investment until there is enough liquidity. This gives you a clear vision of what you can achieve, and you can determine your next marketing destination.

2. Determine business goals

Working without defining the marketing budget involves a great risk factor, as it is like a circus player who walks on a rope at a high altitude, without relying on safety equipment to protect him, and he does not know whether he will be able to reach the other side safely or not.

Have you ever seen a driver succeed in reaching his destination without following signs or a map? Of course not, you also take risks and don't know whether or not your business will succeed without a map. And in the business world, your map is the marketing budget. Having a tight marketing budget helps you set realistic, actionable goals that will propel your business to success. Depending on your budget and regardless of its size, you can plan potential marketing efforts, and enforce projections for the results of those efforts.

4. Long-term planning

When it comes to money, planning before making any decision or taking any step is a must, as any mistake may cost you your work. The same applies to the marketing budget. Pre-planning your budget gives you a broader perspective on long-term goals, and avoids severe stumbling in times of crisis. You can also take advantage of the marketing budget to plan for long-term goals, as long as you have the appropriate preparations and equipment, rather than focusing only on short-term goals.

Steps to prepare a marketing budget

Strong knowledge of math and the ability to use spreadsheets is not enough to create the marketing budget for your business. It needs to study the target market and customers and know exactly where you will spend that money and why. Here are some steps to help you prepare the marketing budget that suits your business, whatever its type or size:

1. Define your business goals

If you ask any expert about the most important step to creating a successful marketing budget, he will tell you that defining the goals of your business is the basis for the success of your budget, as any marketing budget begins with the ultimate goal of the company. What are the goals of your company? It is simply that you need to know what you want to achieve so that you can set a budget that allows you to achieve those goals that must be specific and clear so that you can make the right investment in the right place.

For example, increasing sales, in general, is not a specific goal, but if you seek to increase sales by 15% within 6 months, for example, this is an accurate and measurable goal. If you know the amount of sales increase and the timetable for achieving that increase, then you have a tangible basis on which to set the marketing budget.

2. Study your market

When you set up your own business, you need to conduct a study of the market you enter, analyze competitors to know your position in the market, establish a strong presence, and stand out among your competitors from the first day you officially start your company.

This study helps you to know what your business needs, understand the weaknesses and strengths of competitors, and analyze their marketing performance and the strength of their presence on the Internet. To be able to determine the best strategies for their competition, or to benefit from their experiences and get ideas that inspire you to create marketing strategies and plans for your project.

3. Study your buyer's journey well

The buyer’s journey means the steps, stages, or path that a potential customer takes, from the moment he heard or learned about your product, through the interest he shows towards this product to get to know him more, then he makes a purchase and becomes an active and effective customer. The typical buyer journey consists of 4 stages:

  • Awareness: At this stage, the audience realizes that they are facing a problem, and they are looking for solutions.
  • Reflection: the audience thinks about possible solutions and explores the available options.
  • Decision: After deep thought and review of all available options, the public begins to narrow the range of those options, exclude the least appropriate, and keep the product that offers the best solutions.
  • Action: After deciding on the best product, it is time to take action and make the purchase.

Studying the buyer’s journey helps you understand your audience, how and what they think, and how they interact with the marketing plan for the product and any opinions they share, which enables you to identify the stage at which the audience deviates from their path before they become your customers and intensify your marketing efforts for this stage in particular.

Let's say you have a business and you notice a large number of your audience reach the thinking stage, but only a few of them proceed to the decision stage. It is normal for companies and businesses to go through a period of decline in the number of customers, but you notice that this decrease is greater than expected and affects your sales numbers negatively.

Therefore, you will find that you need to allocate more money to create a marketing plan that serves as the missing link or bridge that helps the audience reach the next stage. In these cases, video marketing strategies and social media ads help push the audience toward the decision stage. Here are a set of questions that help you identify the buyer's journey:

  • How does the public usually know about your product?
  • What does the public need to know before making a purchase decision?
  • How many visits does your site receive per month?
  • How many potential customers can your marketing campaigns attract? And how many of them become permanent customers?
  • How much does it cost you to attract potential customers?

4. Calculate the external costs of your business

Before allocating a budget for promotion, you need to determine the external costs, which are any other costs incurred by the company outside of marketing activities and work, so that you know how much you can allocate. Here are some external costs to consider:

  • Operating costs:  the costs of the process of producing a product, from manufacturing to packaging, shipping, and delivery.
  • Employees’ salaries: administrative costs such as water and electricity bills, rent, taxes, and others.
  • Office resource costs: such as computers, desks, and other tools that employees use while performing their work.

5. Learn about different marketing strategies

It will be convenient to know the strategies that you seek to use for your business. If you are going to spend money on something, you should at least understand how it will benefit you in return. Understanding marketing strategies enables you to choose and define strategies that are appropriate for your situation and goals. Strategies can be divided into several types as follows:

  • Search Engine Optimization (SEO): It is the process of boosting your site's ranking on the search results pages. This strategy works to increase the number of visits to the site, by improving the visibility of the site in the search results and making it a leader to get more visitors.
  • Pay Per Click (PPC) Ads: This is a form of online advertising. They appear at the top of search results pages and on other website pages. It aims to reach more potential customers.
  • Social Media Marketing: It helps you reach your target audience using paid advertising and marketing content on those platforms.
  • Email marketing: A good way to keep in touch with customers, is by sending offers and new products.
  • Content Marketing: Enables you to attract more potential customers, by sharing valuable information that interests them. Content can be read like posts and articles, audio like podcasts, or visual like videos.

6. Know the prices and costs of the strategies

Before creating the marketing budget for your business, you first need to know the costs of the marketing strategies that you will need to apply so that you can know the scope and extent of the money that you will allocate for the budget so that it is not less than what you need or much more.

And with many options that you can use when creating and managing your marketing campaigns, you must determine who will entrust this task to, whether they are employees of your marketing department, a company specialized in providing marketing services or an independent worker, each of them has a different cost as follows:

  • Marketing team: It is the most expensive option. In this case, the costs will include employee salaries and office resources, in addition to the costs of the tools that the team uses to create the campaign.
  • Marketing services company: Most large companies use the services of specialized marketing companies to take over marketing tasks, or employ them permanently and pay them every month for their services.
  • Freelance Mini-Services: Hiring the services of freelancers is a good option if you are just beginning your business and cannot afford to hire a private marketing team, or a marketing services company.

7. Calculate the Return on Investment (ROI)

Return on investment means the ratio between net profits and the cost of investments that have been made to achieve those profits. Thus, the best way to test the success of the marketing budget and see if your investment decisions are correct or not is to calculate the value of your business return on investment.

Of course, there is no point in calculating the value after the marketing effort is over, without comparing it to a goal you are already pursuing. If you have a return on investment of 20%, you cannot decide whether this number is profitable or not, because you do not have a goal, in the beginning, to compare that result against. Therefore, it is necessary to define this value at the beginning and measure the final result after implementing your marketing plan.

How to calculate return on investment

The value of the return on investment can be deduced by a simple step, which is dividing the net profit by the investment costs, then multiplying the result by 100. To calculate the net profits, we subtract the total investment costs from the total income generated from the investment. The higher its value, the better an indication of the success of the investment.

For example; Let's say you invest $500 in a marketing strategy, which returns you $900 in profit. The calculation of the value of return on investment will be as follows:

0.8 = 500/(900−500)

By multiplying the result by 100, we get 80%, which is the rate of return on investment.

The method of deriving the return on investment may seem easy and simple, but some factors affect its value and must be taken into account when calculating that value, such as inflation, the economy, and the political situation.

How to calculate the marketing budget

There is a general rule recognized in the business world about determining the marketing budget for companies. It is advised that B2B companies invest at least 2% to 5% of revenues in marketing, while B2C companies are advised to invest at a higher rate ranging from 5% to 10% of total revenues, as these companies need to reach different segments of customers. Compared to B2B companies.

It should be noted that this is the average investment percentage for most companies, while startups in particular will need to allocate a larger percentage, ranging from 7% to 11%. If you are seeking to achieve several goals at once, you will, of course, need to raise those numbers in proportion to the costs of marketing efforts that are in the interest of those goals.


Finally, we remind you that your marketing budget includes everything your company needs to spend on brand and product promotional activities. And that budget should be in line with your business goals and work towards them. We hope that our previous lines have succeeded in answering all the questions that are in your mind and have provided you with everything you need to know.