How to plan your marketing budget for 2024?

With all the recent political and economic events in the world, the approaching 2024 may seem like a difficult, or even scary year for some tech companies. Economic downfall and the pre-recession state indeed may slow down your growth, which makes a strategic, but flexible approach to marketing more important than ever. Today we want to look at best practices that will help your tech business grow more efficiently in 2024 with strategic marketing budget planning! 

Why should you plan your marketing budget? 

Marketing budget is an important tool that can help you analyze your current performance and understand the directions in which you should move forward. Without one, it is easy to lose sight of where your financial resources are going and not have enough funds once a worthy opportunity for investment comes up.

Developing a marketing budget plan will also help you:

• Analyze your current marketing spend and switch to data-driven decision making
• Allocate funds to the right best performing channels
• Clearly understand what activities, services and partnerships you can afford
• Plan and predict the growth of your business 
• Compare your progress year-on-year and even quarter-to-quarter to tweak strategy in the process 
• Calculate your Marketing Return on Investment (MROI)
• Increase chances of reaching your goals. 

How much should you spend on marketing in 2024?

When thinking about budget planning for a new year, it is easy to push marketing to the last levels of importance, as other operational costs may seem more important. However, in our recent research we found out that 59% of respondents see marketing as their main growth tool, while only 5.9% consider marketing as spending. You should keep in mind that while you can always choose a reliable partner to help you craft a strategy and provide a team of experts, allocating financial resources to stimulate growth and attract new leads should be a priority of founders and senior executives.

Therefore, we suggest thinking of your marketing budget as a percentage of your revenue that you want to invest in your company’s growth.  A general benchmark is to aim for 7-8% of your total (gross) revenue to be spent on marketing. 

Budgeting in crisis: best practices 

Before diving into best practices, we want to stress that 2024 will be a year of crisis, and your budget planning should reflect this challenge. Your current customers will critically review and cut spending on products and services they do not see clear value from, and your potential leads will be more critical of the offerings as their spending capacity falls. Therefore, you should prove your value even harder than before. Here is how: 

• Focus on building brand that people trust 

So, people are more conservative with their decision-making in a crisis. To be able to make the cut, you should focus on generating trust in your brand, really creating those trust triggers. This can be done through user cases, positive reviews, third-media publication and PR – the activities you should definitely invest a portion of your marketing budget. When choosing where to allocate their limited resources, consumers will prefer those who prove in advance that they can be trusted. 

• Plan for closely aligning sales and marketing 

As the decision making process is longer in crisis, it is crucial for your business survival to speed and nurture leads as they go through the marketing funnel. This can only be done by closely aligning sales and marketing departments, both activity and budget-vise. Sales team has to tune in at the very beginning of the funnel and help smoozly transfer prospects right to the deal closure. For that, you should give the client more than they expect and create an amazing customer experience from the very beginning of your collaboration. This can be done through creation of highly relevant custom content, which is an area you should prioritize in your budgeting. 

• Plan budget by quarter, not by year

Сrisis is obviously a time of unpredictability, so you should forget about year-long marketing and budget planning. The maximum horisent of your planning should be a quarter. This way you give yourself room for flexibility and testing to recession-proof yourself. Focus on analyzing quarterly return on marketing investment and adjust your budget accordingly. 

• Align marketing budget planning with your company’s goals 

Start with specific measurable goals for 2024. This will help you estimate the types of expenses you will incur. These goals should help to align your sales, marketing and service teams and prioritize budgeting categories. 

Be specific with your goals. Every marketing department aims to “boost revenue” and “increase sales,” for example, and these goals don’t give you much direction. How will you boost revenue? What strategies will you use to increase sales?

Here are some example of specific, measurable goals:

• Get 7 MQLs and 3 SQL per month.
• Increase organic website traffic x2 monthly 
• Grow founder’s social media by 5%
• Increase the number of free trial users with Paid-Per-Click (PPC) ads

Once you have a small list of 3-5 goals, prioritize them. You may need to sacrifice one goal so you can afford to reach another, so know in advance which goals are “musts” and which are “nice to haves.”

• Evaluate how your marketing spending performed in 2023

Make sure to analyze the progress in achieving your marketing & business goals in 2023 and determine which marketing activities performed best and worst to help you achieve these goals. 

Activities to analyze may include: 

• Content & inbound marketing 
• Video marketing 
• SEO & Linkbuilding 
• Display advertising 
• Paid social media
• Paid search promotion
• Email marketing & email automation
• ABM
• Cold outreach
• SMM
• PR
• Influencer marketing 
• Podcasts
• Streaming TV
• UX & Customer experience improvement

• ​​Estimate your monthly marketing operational costs

To start allocating your budget, you need to estimate your monthly marketing operational costs. These costs are all the basic things you need to pay for to keep the marketing department running. These expenses include the cost of marketing tools, website hosting services, marketing team member salaries, and paid WordPress themes.

• Don’t forget to sort out your data

Having clean, sorted-out data is key to make your budgeting planning data driven, and increase ROI!

• Allocate you budget to best performing channels from last year 

A great idea would be to invest into channels that you already have tested and saw the results from. 

For each option you choose, brainstorm the potential costs you might incur. For example, for influencer marketing, you will need funds to compensate your influencers and free products for them to showcase. Or, for video marketing, you’ll need video equipment, actors, video editing software, and a filming studio.

It might help to estimate your costs over a month and extrapolate them out to 12 months. You don’t always need an exact figure either — just estimate the cost of each channel and add 5-10% to account for any extra expenses you might incur.

• Prepare to measure ROI

Measuring return on your marketing investment quarter-by-quarter should be your #1metric to flexibly approach marketing planning and allocate budget to increase ROI even more. This way, recession will prove to be a period of opportunity and exploration for you!

How to start your planning now!

Flexibility, creating and testing A LOT of marketing hypotheses is a way to not only plan budget efficiently, but to also ensure the successful performance of your marketing in 2024. Unfortunately, it is more difficult to implement  such scope of flexibility with an in-house marketing team, as you would need a lot of people, resources and expertise for constant testing. Partnering with reliable companies that both have expertise and people resources to experiment and test, giving you the most flexibility should be a topic to consider while allocating your marketing budget for 2024. 

If you want even more practical insights and are interested to see how other tech companies plan their budget, please participate in our research by filling out this super short questionnaire. We will use this information to create a case study that we will share with you, alongside with your personalized budgeting plan. Click here to take part now!