How to Allocate a B2B Marketing Budget

You have an idea for a winning marketing campaign, researched what to do next, identified the right vendors to work with, and are ready to dig in. But if you’re only working from a half-formed B2B marketing budget, you probably won’t see the impact and results you’re looking for. They may be sporadic at best and not offer a sustainable marketing solution for your business. 

Instead of trying to navigate your spending in the dark, you need a solid allocation to maximize your ROI. It’s a crucial tool to empower marketing leaders and realize success in your business. Not sure how to get started or where to allocate your dollars? Here’s what we learned about B2B marketing budget allocation by being more than a vendor and really partnering with our clients on their campaigns and strategies.

How to Allocate Your B2B Marketing Budget

As you allocate your marketing budget, it’s essential to follow a proven framework that builds upon each previous step. We’ve found that following the below process helps maximize impact and strengthen ROI. 

• Identifying your budget
• Aligning marketing spending to your goals
• Choosing your tactics
• Determining how you’ll measure success

As you can see, each step naturally follows and strengthens the one before it. Let’s take a more comprehensive look at how this process breaks down in your own business.

Step 1: Identify Your Budget 

Before you get started on your marketing strategy, you need to figure out your numbers and how much you have to work with. A lot of time, it’s up to the CMO to make a case to the CEO and CFO for a marketing budget. Once you know what your grand total number is, ask the following questions to help you determine how much should be dedicated to digital vs other kinds of marketing. 

• Which goals are the most important to maximize with your resources? What KPIs are you trying to increase this quarter or year?
• Do you have any past data or expectations to inform this decision? 
• Where does your audience primarily spend their time? Where do conversations typically come from? 

Once you’ve gone through and answered these questions, you should be able to start forming an idea of the major buckets where your budget can be spent. 

Delotite’s CMO Survey shows that roughly 11.7% of total company-wide budgets are spent on marketing. But it’s important for you and your team to consider if that type of figure is realistic for your business. Do you need more to make an impact? Can you operate on less? Determine how much of your overall budget you can comfortably spend on your marketing goals without compromising your company-wide goals. From there, you can craft a more nuanced budget by looking at the following.  

Expected marketing costs 

Figuring out your marketing costs isn’t always straightforward, especially when trying to scale a campaign or try something new. Think through what some of your barriers to entry are and past performance costs. 

For example, it’s challenging to know your cost projections if you want to launch a B2B marketing campaign on LinkedIn but have no real presence there or experience running ads. It’s also vital to consider any assets needed, whether you’ll need a graphic designer, retain an agency, and any management fees to run your campaigns.

 As you gather data, you may also see a need to pivot your strategy. Sometimes the pivots are about abandoning a plan that isn’t gaining traction in favor of a fresh approach. In other situations, the campaign is working well and yielding conversions. You may decide to pivot and focus on what’s working and need to allocate more funds to a specific area of your campaign.

Another aspect of cost to consider is logistical costs of marketing, like marketing technology and agency spend. According to Gartner’s 2019-2020 CMO Spend Survey, nearly half of all marketing dollars are spent on marketing technology and outside agencies, and, on average, 26% of company marketing budgets are allocated to marketing technology. 

If you don’t plan to outsource anything to an agency, you’ll still need to evaluate what tools and technology you’ll need to execute your campaigns and run them seamlessly. They shouldn’t tank your marketing budget, and should instead enhance the resources you need to run a seamless campaign.

Industry averages

There’s no need to reinvent the wheel when determining your marketing budget. Industry averages reveal valuable insights into what to expect from your spend. Just make sure your research is industry-specific, as average marketing spend can vary widely even among B2B verticals. However, they should be used as just one data point, and not given too much weight. They’re useful, but not gospel.

Step 2: Align Marketing Spend to Your Goals

Your marketing budget also needs to align with the overall goals of your business and your campaign strategy. Putting all your budget into getting the most amount of impressions possible will only be so helpful if your marketing goal is “Request a Demo.” Alternatively, focusing your full budget on driving demos may stunt demand generation and your demo-generation strategy may not be scalable.

This step is also industry-specific: a SaaS company’s overall goal is to increase total users. But what if their marketing department’s goals are about free trial signups? Your marketing budget should be tailored to that goal of increasing free trials, not necessarily the harder-to-effect goal of increasing total users. 

Step 3: Choose Your Tactics

Taking action on your marketing campaign is the bulk of your marketing strategy. Before you launch into spending your budget, it’s essential to understand which levers to pull and when. Once you know which to pull and how they all work together, you can identify how much you’ll need to allocate to move your campaign forward. 

Depending on your business, certain channels or tactics will be more expensive than others, even if they’re more effective. Doing some digging to determine that ahead of time will save you unexpected overspending down the line. 

If you’re not sure where to start, look back to past campaign performances. What worked? Where do you need to improve the campaign across which levers? Weaker levers may need more resources, but those strong ones could be amplified with more spending power.

Here are a few ideas for marketing spread to help shape your own budget: 

• Search, LinkedIn (Lead Gen)
• Paid social (demand gen)
• Display, YouTube (awareness)
• SEO
• Content marketing (blogs, resources, premium assets)

When you’re creating a marketing funnel, especially for the first time and need some guidance, you can focus on boiling down to the basics of awareness, consideration, and decision in the buyer’s journey. 

Even if your company and industry are unique, these three remain consistent and relate to the kind of messages you want your buyers to see. Once you’ve built your own funnel, you can work out the goals and marketing budget accordingly.

Step 4: Determine How You’ll Measure Success 

A marketing campaign needs KPIs and goalposts to measure success and to know if your B2B marketing budget allocation was set up the right way. It’s better not to wait to evaluate your campaign once it’s wrapped up and done. Instead, determine how you’ll measure the success of your allocation from the very beginning. How will you know when you need to flex your marketing spend, try something new, or amplify your efforts? 

Some foundational KPIs to keep in mind are:

• Cost per Lead/MQL/SQL
• Number of leads/MQL/SQL
• Total Spend 
• Conversion Rates between funnel stages
• Return on Ad Spend
• Pipeline velocity

Once you’ve determined where your KPIs and smaller wins are, you can periodically reevaluate your campaign and marketing spend to make adjustments as needed. Maybe you overinvested in a certain channel. Reallocate that to where you are seeing the most success. Budgets are best when they’re fluid and able to adapt to the real-time results of your marketing efforts and where the best ROI is. 

Get Your B2B Marketing Budget Allocation Right

Allocating your B2B marketing budget is an essential part of your success, and empowers your marketing leaders to propel your strategy forward. Ready to take your B2B marketing campaign to new levels? Get in touch with us today.