A marketing communication budget provides a formal process for planning, tracking and measuring the impact of your expenditures on marketing communications activities such as advertising, direct marketing, online or events. The budget sets out the funding required to meet your communications objectives and provides a method of managing the expenditure over a budget year.
The marketing communication budget is part of the wider marketing planning process. Your marketing strategy establishes how you will achieve your marketing objectives. Marketing communications strategy describes the techniques you will use to deliver key messages to the target audience. The objective of the marketing communication budget is to achieve the communication goals as cost effectively as possible and demonstrate a successful return on investment. Some organizations separate above-the-line expenditures on advertising from below-the-line activities such as product information, social media or direct marketing.
The budget covers the direct and indirect costs of communications programs. A budget for product information, for example, would include costs of copy writing, design, printing and distribution. A budget for an event such as an exhibition would cover rent of exhibition space, booth design and production, client entertainment costs, event publicity and miscellaneous staff costs. Careful planning ensures that there are no surprises when the final bill arrives.
The budget also sets out the timescales for expenditure over the year. Most organizations plan their expenditures on a quarterly basis to smooth spending; however major events like a new product launch can mean heavier expenditures in one quarter. Although a budget should cover the forecast costs for all planned activities over a year, it should also include a contingency fund to cover costs for new business opportunities.
Putting together a budget can highlight opportunities to reduce marketing communications costs. Integrated marketing communications uses consistent messages and visual images through all communications programs. By working with a single communications agency, organizations can also reduce their administrative costs, releasing funds for other communications programs.
Budgets enable you to track planned expenditure against actual costs. To manage the budget effectively, make sure your suppliers invoice you promptly and advise you of any possible cost increases. To meet quarterly budget targets, you may have to request invoices against work in progress for longer-term projects. As the end of the budget year approaches, you should ensure that all invoices for that year’s work are submitted and approved, even if the work is not completed. Communication priorities could change in the next budget year and you may not have funds to complete critical projects.
Use the budget to measure how well the program achieved communications objectives. Use metrics to measure factors such as changes in brand perception, number of sales leads, responses to direct marketing programs or increase in the number of website visitors. Those metrics help compare the effectiveness of different communication programs or levels of expenditure.