Managing your marketing budget effectively is crucial for growth, especially for Australian small and medium enterprises. It’s not just about spending money; it’s about investing it wisely to generate a return. Many businesses, particularly those new to dedicated marketing spend, struggle with knowing where to start and how to measure success. We see this time and time again.

The biggest mistake we observe is treating marketing as a cost centre rather than a profit centre. A well-planned budget, focused on return on investment (ROI), will deliver measurable results. Here’s how to approach it.

• Start with your goals: Before allocating a single dollar, define what you want to achieve. Are you aiming for increased brand awareness, more leads, or higher sales? Specific, measurable, achievable, relevant, and time-bound (SMART) goals are essential.
• Allocate based on customer value: Identify your most profitable customer segments. Where do these customers spend their time online and offline? Focus your budget on channels that reach them effectively. Don’t spread yourself too thin trying to be everywhere at once.
• Prioritise data-driven channels: Digital marketing offers excellent tracking capabilities. Google Analytics, social media insights, and campaign-specific tracking links allow us to analyse performance and optimise spend. Channels like search engine marketing (SEM) and social media advertising provide clear ROI data.
• Test and iterate: Don’t be afraid to experiment with different channels and tactics. A/B testing of ad copy, landing pages, and email subject lines can significantly improve results. Regularly review performance data and adjust your budget accordingly.

A common rule of thumb is to allocate between 5-15% of projected revenue to marketing, but this varies greatly by industry and growth stage. For a new business, a higher percentage is often necessary to build brand awareness. As you mature, you can refine your budget based on historical performance and projected growth. Remember, consistently analysing your marketing spend and its impact on revenue is the key to maximising your ROI.

To get started, we recommend conducting a thorough marketing audit to understand your current performance and identify areas for improvement. This will provide a solid foundation for building a budget that delivers real results for your business.