Marketing is essential for drawing sales and new customers to your business. But understanding how much to spend, and which strategies to follow, can be challenging for business owners.

Owners understand the importance of marketing for increasing sales, but determining the budget can be complicated. According to YouGov research, marketing expenditure in the UK typically makes up 9.3% of total business income — though the number differs significantly between businesses.

What is a marketing budget?

A marketing budget is a lump sum of money set aside for your marketing strategies. It covers public relations, paid advertising, web design, social media, branding, leaflets and flyers. Budgeting makes it easier to track costs, and an adequate budget results in positive client reviews, increased brand awareness and stronger business development.

How to set clear marketing goals

Deciding what you want to accomplish makes it easy to set clear goals, which in turn helps you choose the most effective approach and how much to invest. Common marketing goals include:

• Increased brand loyalty
• Growth in online sales
• Increased brand recognition
• Drawing attention and enticing subscriptions
• Generating leads or inquiries
• Gathering personal information, such as email addresses
• Attracting customers to your physical location

Once you’ve set your goals, decide what measures you’ll take to achieve them. Goals let you track progress and see how many customers visit your store, online or in person. Setting them before you start benefits your business in the long run.

How much should you spend on marketing?

Your marketing budget represents a part of your income. B2B companies typically spend around 7–9% of revenue on marketing (per the Gartner CMO Spend Survey and the CMO Survey), and B2C product companies tend to be meaningfully higher — often 10% or more. There are six main steps to determine your budget:

1. Obtain a straightforward marketing budget template.
2. Enter the figures you’re sure of.
3. Add estimated figures for the ones you’re not.
4. Recheck and verify all the numbers, including the ones you’re confident about.
5. Once you understand your expenditure and returns, juggle your budget and returns accordingly.
6. Repeat constantly — running campaigns and noting outcomes builds a better grasp of your ROI over time.

Tips to assign your marketing budget

Once you’ve chosen the amount, decide how to allocate it. Review past campaigns to see what worked, and track your data to determine the return on investment from each method. Here’s how to divide it up:

Social media

Social media lets you advertise to a far larger audience than just your followers, and it’s the most effective form of online marketing today. Platforms like Facebook, Instagram, X, YouTube and LinkedIn let you target exactly who sees your adverts, boost your products and drive more sales. Influencers have taken this further, recommending products and services to their followers.

Email marketing

Email marketing is still a very powerful technique for cultivating new clients and producing high engagement. Businesses benefit most when they have quality content and a sizable subscriber base — email newsletters tend to deliver one of the highest ROIs of any digital channel.

Pay-per-click (PPC)

PPC is online advertising where a company pays each time a customer clicks its advert. Google Ads is one of the best options and helps attract genuine traffic.

Website redesign

Investing in your website is an excellent use of some of your budget. It can improve conversion rates, make your company appear more professional and maximise the effectiveness of your other marketing efforts.

Search engine optimisation

Ranking well in Google’s results is critical for traffic, sales and brand exposure. SEO increases organic traffic using target keywords, helps web crawlers understand your site, and improves the user search experience.

Traditional media

Traditional media — magazines, newspapers, radio, TV, billboards — is a great way to get exposure and build reputation at the same time. It was the top choice of businesses before social media, and can still increase brand awareness and drive new sales.