The end of the year is an important time for marketers to create new goals and put better digital marketing strategies into motion. With this comes determining how to allocate your B2B marketing budget, which is one of the most challenging pieces of all. Unfortunately, things like budget constraints, uncertainty over what will deliver the best results, and time can hold us back from figuring out how to leverage these dollars. When we want it all, how can we determine a suitable B2B digital marketing budget allocation that gives us the return we want?
We’ve defined some of the most crucial steps to get you on your way toward preparing your B2B digital marketing distribution that will make your CFO happy while ensuring you have the time and resources to make it all happen.
What percentage of revenue should you allocate to marketing?
This can be all across the board. On average, B2B marketers spend about 6-7% of their total revenue on marketing and about 11% of the company budget. This also varies among industries, for example, mining and construction typically put only 2% of their budget towards digital marketing, while manufacturers are closer to 30%, according to Deloitte.
Knowing what these numbers look like in your company is an important first step in understanding what’s reasonable and what resources you have available. Then, you can determine how you want to allocate it.
Define Your Goals
Having big-picture goals defined early in your planning process is important so that you can later hammer out the details of your B2B digital marketing budget allocation. So, what are some of your goals for 2024? Here are a few questions to consider:
- Are there emerging or growing competitors?
- What are the biggest opportunities in your industry?
- Are their new products/services to highlight?
- How effective is your website at converting leads?
- What channels were most effective at bringing leads last year?
- What’s new/emerging in your industry?
- What is your monthly target for qualified leads?
- How many new inquiries per month are needed to meet your leads goal?
- How many repeat leads do you need to reach your returning customer goal?
- What is your estimated timeline for achieving specific goals?
From there, determine what user touchpoints are needed to achieve these goals by taking a look at the traditional B2B buyers funnel and which tactics and channels work best. For example, if you’re looking to do more prospecting, consider creating valuable content to help users start to solve their problems while positioning yourself as a subject matter authority. On the flip side, maybe you are trying to convert customers into repeat customers. In this case, more personalized touchpoints, like email marketing, will be effective.
You should begin this process by creating what your funnel looks like now and start writing down which tactics you’ve used and which part of the funnel they fall under. Doing this exercise can help you discover that you might be investing more in one area than another.
Each of these stages is important and should not be neglected, regardless of how much digital marketing budget you have. Retention and referrals are just as important as awareness and new leads coming in. You can scale down accordingly to make sure you have a plan that reaches each touchpoint.
Allocating your Marketing Investment to Align with the Funnel
Just as the funnel pieces move from larger to smaller, so will your investment. This means that the most expensive part of marketing is awareness building, and the most cost-effective is towards the bottom where small changes can have a very high impact.
Your breakdown might look something like this:
- Brand Awareness: Paid Ads (Google, LinkedIn) and SEO – 40% of the budget
- Trust Building: Content Creation/SEO – 30%
- Engage: Email marketing, website UX enhancements, organic social – 15%
- Retention/Loyalty: New product promo, survey, exclusive offers – 15%
That said, creating your strategy starting from the bottom and working up can be very effective. Small changes like updating your forms, improved CTAs, and more personalized touchpoints (i.e. email) can push that prospect into the MQL category. Those are your quick, easy, and low-cost solutions. From there, you should work your way up the funnel, identifying what kinds of tools/resources are needed to build trust, and then into the awareness stage where you can promote those resources to a prospective audience.
Don’t Forget About Reporting
Last but not least, don’t forget about investing in reporting! How else will you know what channels are most effective? At Top Floor, each of our clients receives a comprehensive Data Studio report that is completely customized to your goals and marketing channels. This kind of visibility, which updates monthly with fresh data, gives a comprehensive understanding of where our efforts are succeeding, and where we may be falling short. If you’re not working with an agency, make sure you are taking advantage of tools like GA4.
Ready to Build Your Strategy and Budget?
We have plenty of resources on how to build an effective strategy, which is an important first step in budgeting. For example, you can learn more about what channels work best at which part of the funnel here.
We’d love the opportunity to help you find the right B2B digital marketing solution for you that fits your budget. Let’s talk!