Marketing budgets have fallen in recent years, but expectations continue to rise.
Today’s marketers need to do more with less which means more optimized campaigns, enhanced customer service and customer experience, and improved all-round performance.
That’s no easy task when there’s less money to go around. So as a marketer, there’s never been a better time to carefully plan your marketing budget!
You need to consider what channels will deliver on marketing and company key performance indicators (KPIs), what campaigns will help raise brand awareness, drive traffic or generate leads, and find ways to boost organic efforts to help bolster paid efforts.
Bear in mind that you can use artificial intelligence (AI) to help plan your budget in areas such as forecasting, competitor and market insights, audience targeting, and scenario testing.
In this blog, we will look at the marketing budget landscape and provide key steps to plan and implement a budget that can help realize your goals.
- How have marketing budgets changed?
- 8 Steps to Plan Your Digital Marketing Budget
- Evaluate past performance
- Set clear goals
- Allocate budget based on success
- Break down your requirements
- Plan your content creation
- Choose your platforms
- Monitor your results
- Look to the future
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How have marketing budgets changed?
Gartner’s CMO survey revealed that marketing budgets dropped from 9.1% to 7.7% of overall company revenue in 2024, a decrease of 15%.
This decline is in contrast to 2020 when overseas data marketing budgets were 11% of revenue with a significant dip to 6.4% in the height of the Covid-19 pandemic in 2021. This figure rose to over 9% in 2022 and 2023 but saw a notable decrease in 2024 to 7.7%.
The reason? While paid media investments grew to 27.9% of the budget in 2024, spending fell across martech, labor and agencies, and technology investments reached the lowest level for a decade.
In fact, 20% of senior marketers rate delivering a greater ROI on their marketing budget as the number one issue they face, according to our CMOs report ‘Challenges, Budgets, Digital Transformation, & Skills’.
Another development that may have an influence on budgets is AI. With many marketing platforms now powered by AI and AI tools becoming more usable and widely adopted, many marketing leaders believe the technology may help in times of less.
“To optimize budgets in the age of AI, marketers must adopt a precision mindset. They need to invest in AI tools that automate repetitive tasks, use predictive analytics to forecast campaign performance, and allocate resources based on real-time data insights,” advises Mischa McInerney, CMO at the Digital Marketing Institute. “Effective planning means testing, learning, and iterating quickly—prioritizing channels and strategies that show proven ROI while reducing spend on underperforming areas.”
8 Steps to Plan Your Digital Marketing Budget
The key to using your budget wisely is to have a plan, one that works towards meeting your department and business goals.
This means that you need to take time to reflect on marketing performance and analyze data to see what channels delivered so that you can allocate your budgets towards areas that will help drive revenue but also realize any other key goals such as raising brand awareness or boosting conversion rates.
Let’s look at eight key steps that will help you develop a robust and realistic marketing budget.
1) Evaluate past performance
The best way to understand how to use your budget a complete guide to boiler installation, maintenance, and cover plans is to evaluate past performance. This includes looking at channels, attribution (how marketing tactics contributed to sales, conversions, or other goals), paid media, and marketing campaigns.
This requires you to review key efficiency metrics that tell you which investments are driving sustainable growth in the long and short term.
Here’s a detailed table from Emily Kramer that looks at the key efficiency metrics such as lifetime value (LTV) and customer acquisition cost (CAC) and how to calculate them.
Knowing what worked and what
Back up these metrics with data to drill down cell phone number to look at the offline and online digital channels that performed. Use it to figure out where you’ve experienced success and why. To see which efforts didn’t work and why.
didn’t, and, most importantly, why there was success or failure are vital pieces of the digital marketing puzzle that you’ll need if you want to move forward.