Most marketing guidelines heavily focus on methods that are supposed to be used in a campaign and a way in which these methods can be combined to make a more holistic and effective system. Still, without the money to fund it all, your plans can’t be executed, regardless of how good they are. This leads us to a particular issue that is on everyone’s mind these days – how much should you budget for marketing?

From the start, it’s clear that one-size-fits-all solutions won’t work, due to factors like industry, the size of the company and business model differ from one case to another. What you can rely on are the methods that you use to determine your marketing budget. This will help you make an appropriate estimate for your organization.

Here are some tips and tricks that might come in handy in this regard:

Measuring your ROI

The first thing you need to do when it comes to marketing budgeting is to measure your ROI. Why? Well, because this will help you measure your effectiveness. Every technique that you use has an industry average ROI, so, by calculating your own ROI, you can see if you’re above or below this average and where to make changes

As for ROI calculating techniques, the simplest and the most reliable way to make an estimate is to focus on the metric known as CPL (cost per lead). This is a crude estimate that is made by taking your total marketing budget and dividing it by the number of leads that you get from these marketing methods. What you get is the amount of money that you need to invest per single lead.

Your operational costs

The next thing you need to understand is that while it is insightful, ROI is not everything. You see, some campaigns are simply too expensive for a small organization, which means that regardless of the ROI, the cost of the initial investment is more than you can afford.

Now in order to see what you actually can afford, you need to start by calculating your operational costs. We’re talking about your monthly expenses in terms of utility bills, rent, supplies, web hosting, sales tax, professional fees and more. This is the deficit that you have to cover each month in order to be at the break-even point. Your monthly marketing spending needs to fit within the difference between your revenue and your operational costs. However, remember that not all of your marketing-related costs will be something that you pay for on a monthly basis.

Where will the money come from?

Probably the most important issue to remember is where the money will come from. If you’re supposed to cover these expenses from your profits alone, you might soon face a cash flow crisis. This is why the majority of entrepreneurs either look for new investors, partners or apply for a loan. The latter part is particularly popular, due to the fact that it’s clean, simple and allows you to keep complete control over your business.

Still, you have to see what kind of money you’ll have on your disposal or, in other words, just how big of a loan will you be able to get. For this, you need to hire someone to do comprehensive credit reporting for your brand. Not only will this give you an insight into the amount of money that you can expect but it can also help you figure out what kind of terms are you going to receive. Both of these are pivotal for the cost-effectiveness of your marketing campaign.


Perhaps the most important metric of them all is the question of what are your goals for the future. You may be content with your current brand recognition status but it is likely you want to improve this.

In other words, you need to have all of the most relevant metrics worked out before you even make this list. This means revenue goals, the number of specific purchases, the closing rate and the number of new opportunities, the number of sales qualified leads and the number of marketing qualified leads. Needless to say, these are not all metrics that are relevant to this process.

Once you know your goals, you can set some milestones along the way in order to track your progress. For this, it’s by far the best if you were to set SMART goals. Keep in mind that some methods give you a linear growth (in all of the above-listed fields), while others can achieve exponential growth. This is important so that you don’t set the same goal for the first and the fifth month of your marketing campaign.


After completing these calculations, you’ll know exactly how much money you need to invest in your marketing budget. The needs of your business, your financial capabilities, your aspirations for your business, and where you currently stand are all important factors. By doing this, you can make sure your business is ahead of the game and not over or underinvesting in your marketing budget.