How to properly present your 2024 marketing budget?

Why is it important to anticipate your marketing budget? How to structure and plan the coming year around ambitious but achievable goals?

November 22, 2023

What is the marketing budget and why should you calculate it?

Why is it important to anticipate your marketing budget? How to structure and plan the coming year around ambitious but achievable goals? How to estimate the budgetary envelope necessary to achieve these objectives and present it to your hierarchy? So many questions that you can ask yourself and that we will try to answer.

Marketing is central to business growth. It conditions the commercial performance of today and tomorrow, the retention of customers and the improvement of your brand image. A real lever for differentiating yourself from your competitors, well used, it will guarantee you a full order book for the coming months, or even the next years. So how do we do it, exactly?

What is the marketing budget?

From an accounting point of view, the marketing budget is the annual sum allocated to marketing investments. The marketing budget is generally drawn up and defended by the marketing director to the general management. It provides visibility on the cost structure necessary to promote the products or services offered. This includes all promotional expenses such as advertising, public relations, labor costs, office expenses, and other costs associated with marketing.

Why is calculating the marketing budget important?

Since the Covid-19 crisis, marketing budgets have been reduced (or even cut), while growth objectives have not changed. Thus, every euro invested counts and all future expenses must be quantified in order to be able, at the end of the exercise, to assess the return on investment and therefore the effectiveness of marketing actions.

Our advice for calculating your marketing budget

Summary of marketing spend over the last 12 rolling months

To know where you are going, you have to know where you are coming from. This expression has never been more relevant than when it comes to establishing your marketing budget. Before writing down your next investments on paper or Excel, start by taking stock of the expenses made over the current year and the results obtained. Ask yourself about the effectiveness of the actions taken during the previous fiscal year: number of leads generated, number of signatures, return on investment, number of followers on social platforms...

Here are some examples of expenses that cannot be missed in any marketing budget:

  • Website management fees
  • Web editor
  • SEO
  • Paid referencing
  • Communication
  • Event
  • Media buying

For each of these expenditure items, try to determine key success indicators (KPIs in English). They will allow you to defend your balance sheet, identify points of friction and help you calculate the future marketing budget.

Competitive and internal analysis to find areas for improvement

Analyzing the competition

Setting up a marketing budget also requires an analysis of all competitors in the business sector. The interest is to study their behavior on the market and the positioning of its products in relation to the competition. Are competitors active or rather discreet when it comes to marketing? Is the company market leader? Does it want to conquer new market shares? All these questions relating to the evaluation of the competition will give you a more precise idea of the strategy to adopt, the budget and the actions to be put in place to achieve an ROI quickly.

Take stock of the past year

To establish a relevant and scalable marketing budget, Taking stock of the previous year is absolutely necessary. This allows us not to start with a blank sheet of paper andadjust investments according to our results, rather than with a wet finger.

To take stock of the expenses over the year and the results obtained, it is best to ask yourself the following questions:

  • Of What was the previous budget?
  • What is who has been spent?
  • How many customerss were generated?
  • What marketing actions (or investments) have facilitated these signatures?
  • What tools are used by the team? Are they all useful?

2 techniques for calculating your marketing budget. (Attention, one is better than the other)

Calculation based on the percentage of turnover.

The method Old school by definition. It has the advantage of being fast and of quickly offering an estimate of future expenses.

It is common to hear that the golden rule in B2B is to allocate 20% of your turnover to marketing. For more details, here are the statistics revealed by several consulting firms:

  • Between 4.9% and 20.5% of turnover to be invested in marketing according to CMO Survey
  • Between 6.4% and 11.2% of turnover to be invested in marketing according to Gartner
  • Around 12% of turnover to be invested in marketing according to Deloitte
  • Between 6.1% and 9% to invest in marketing according to Forrester

However, in the age of digital marketing and advanced tracking systems, it is easier to monitor all of your actions and their ROI.

In addition, the very fact of building your budget on last year's turnover implies a risk of stagnation in your business, because you do not take into account the prospects for future developments.

We therefore recommend that you avoid this first method at all costs and that you prioritize the second.

Calculating an ROI marketing budget

The term ROI is used to refer to any strategy that favors the most direct return on investment possible from campaigns.

In order to engage in this approach, start by looking at business goals, market by market, segment by segment of your business. This will allow you to fully understand the challenges ahead and to prioritize your expenditure items.

Once the context is well assimilated, you can pull out your calculator, don't worry, no scientific calculations to come:

That is, an annual turnover target of 2 million euros

Average turnover per customer: 1850 euros

2 million/1850 = 1081 customers

Average number of leads qualified to reach a sale (according to your statistics and results for the past year): 5

Number of qualified leads required to reach the objective (again to be adjusted according to your performance): 5 x 1081 = 5405 qualified leads

Global marketing budget = cost of a contact x number of contacts to generate

60€ x 5405 leads = 324,300€

324,300€/2000000 = 0.16, or 16% of annual turnover.

How to present your marketing budget to convince your hierarchy to invest more in marketing?

No, marketing is not an expense. Not a cost center. It is an investment and a profit center.

Marketing plays a decisive role in the growth of your business, you are already aware of this otherwise you would not be reading this article. But what about your boss?

Your management may not see the value and impact of marketing on business growth.

Show them the other way around, Try to convince them. To get there, start by:

  • Clearly present your ideas to your management. Carefully present your presentation, your arguments, show examples of competitors in the sector
  • Integrate management and department Sales to the construction and monitoring of the marketing strategy
  • Prove the advantages and profitability of your actions on the performance of the company
  • Take stock of what exists and explain what you are missing, what needs to be optimized or made profitable
  • Build Reportings detailed and present them at regular intervals. This approach will allow you to reassure your boss and help him to plan for the ROI of your strategy.

The essential slides

When it comes to presenting your marketing budget, it is imperative that you offer maximum visibility to your manager. That's why detailing the audience to target, the positioning of your offer, or even visually demonstrating how you will spend every cent counts.

Slide persona

How do you market an offer if you don't know your ideal customer? That is what this slide persona is all about.

On this slide, present a robot portrait of a customer representative of a potential consumer group.

Generally, there are behavioral and demographic elements. Here are some key things to include in your persona:

  • First name, gender, age, marital status, place of residence,
  • Occupation and socio-professional category,
  • Lifestyle and interests,
  • Needs and expectations,
  • Objectives, challenges to be met, motivations,
  • Obstacles, Obstacles, and Frustrations.

Slide positioning

A classic business school presentation. This slide models the positioning of your product or services among the forces in the market. Often boring and visually loaded, try to make this slide digestible. His good understanding depends on it.

Slide from the strategic commercial presentation made for Lego.

Slide roadmap/retroplanning

Think of this slide as a schedule on which the action plan is rolled out until one Deadline specific in order to develop an action plan and intermediate steps.

Slide dedicated to numbers

As the name suggests, on this slide, we get to the heart of the matter, whether to talk about a provisional budget, to announce growth objectives or to analyze the KPIs. Social media as is the case in the example below, in short, this is the slide on which you will do Data visualization !

You will notice that you can easily present your marketing budget in a vertical format, either by changing the orientation of the slide on PowerPoint, or simply by using Word. The vertical format will be perfect for sharing your document by email and making it easier for your collaborators to read.

Finally, do not be afraid to be selective about the levers, objectives and actions to be taken, but also about the performance indicators to be integrated into your marketing budget. Especially if you have a limited budget. It is better to focus on 2 or 3 significant actions rather than on a large number of ideas that will be poorly executed and from which you will get few results.

Do not be afraid to be selective about the levers, objectives and actions to be taken, but also on the performance indicators to be integrated into your marketing budget. Especially if you have a limited budget. It is better to focus on 2 or 3 significant actions rather than on a large number of ideas that will be poorly executed and from which you will get few results.

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