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Budgeting for content marketing can be a task. You’ve got limited resources and increasing pressure from leadership to show results. It’s enough to make any marketer’s head spin.
But what if I told you that you’re not alone? Many marketing leaders out there are dealing with the same fears and uncertainties when it comes to allocating a budget for content marketing.
Maybe you’re worried that you won’t have enough budget to execute a successful content marketing strategy, or perhaps you fear that you’re wasting your budget on ineffective tactics. And let’s not forget the struggles of accurately predicting ROI.
To help you navigate this challenge, we’ll lay down the nitty-gritty of creating a content marketing budget that’s practical, effective, and sufficient for your upcoming content marketing efforts.
Before starting the allocation process, consider what you need to account for. Here’s a list of factors you should consider while budgeting:
A common thread in our interviews was that most marketing leaders use historical financial data to forecast their budgets. It acts like a data-driven anchor for the budget allocation process.
Roy Harmon, Chief Marketing Officer at LeadPost, says they’re focused on growth, so he looks at bright spots from the past year and looks into new channels to test. This gives him enough room to keep up with current trends in the market while doubling down on what worked in the past year.
For instance, a Content Marketing Institute report found that in-person events have come back in 2023, with 49% of respondents investing in it this year. That means you need to plan for this channel, too—in addition to digital marketing channels.
So, review metrics like your revenue, profit and loss sheet, and expenses to understand how much was spent and the return on investment (ROI) for each campaign. Use this as a baseline to predict how much you need to invest.
Logically the larger the company, the more extensive its content needs and the bigger its budget. So, think about your company’s size, goals for the year, and the scope of work required to reach those goals. You can also split that cost by channel and project phases (creation, distribution, promotion).
As a rough benchmark, you can use BBSA Marketing’s breakdown. The company’s founder, Anna Stella, says, “It depends on the project. Research 20%, Writing & Editing: 40%, Assets and visuals: 30%, Tools and others: 10%.”
Here are a few industry benchmarks (% of revenue) according to Gartner and Deloitte:
Your strategy changes as you test different channels and content campaign types. So, create an annual budget and then split that budget into quarterly and monthly costs. Ensure you have enough cash flow to modify these amounts so the budgeting decisions move as the strategy does.
Also, allocate the budget for the entire period instead of spending it all at once. It gives you the flexibility to adjust your content marketing plan as needed—resulting in better returns over time.
If you’re in a highly competitive space like healthcare or finance, you might require a larger content budget than most companies to create marketing campaigns that help you stand out. It’s crucial as differentiation is key in a competitive market, and your initial investment is a massive factor in the results you achieve.
Evaluate what your competitors are doing and factor in some leeway to ensure you out-market them in terms of awareness and revenue.
As you keep creating content, unexpected costs will come up over time. As they’re random, there’s no way to plan for them unless you have experience doing this for several years. So, factor in a contingency budget for these expenses to avoid being caught off guard.
Jess Cook, Head of Content at LASSO, says, “It’s super smart to set aside some funds (10% or so) for things that pop up. If nothing like that arises, then you have some money to play around with for testing or a new tool.”
Typically, you can expect these when hiring new vendors, experimenting with new tools, changing strategy, conducting additional market research, legal fees, or natural disaster events.
Robert Surdel, Content Team Leader at Husky Hamster, says, “Do your vendor due diligence, by shopping around you can find great options out there. On top of that, asking difficult questions up front allows you to avoid any disappointments or missed expectations later.”
You also need internal and external resources to execute your content strategy. It can include the following:
Are you looking for a tool to manage your content and collaborate with different teams in your company? Check out Content Camel’s free trial.
The current state of investment in technology and marketing vendors
Source
Here’s an example breakdown from Padmaja Santhanam, General Manager of Growth at FirstPrinciples:
The marketing landscape has evolved multifold in the past few years. For instance, just last year, Open AI’s ChatGPT was launched, spearheading the AI revolution in the industry. It means your employees and contractors would need ongoing support to stay on top of these trends and improve their skills when needed. So, allocate a specific amount for learning and development—and make it available to each individual.
As you bring in more contractors and employees or even sign up for different tools, your legal team will be your best friend. That also means you must account for the expenses of maintaining software compliance, creating contract workflows, and ensuring tax compliance. It’s best to collaborate with your legal team and see which costs fall under the purview of your marketing budget.
The State of Marketing report found that 92% of companies expect their marketing budget to remain the same or increase in 2023. And the majority spend anywhere between $100,000 and $200,000 per year on content marketing. But this is more nuanced than it looks. It hugely depends on what their goals are, what their revenue is, and what they’re investing in.
A look into a marketer’s quarterly content marketing budget
For starters, think about the size and scale of your company. If you’re a relatively small team, think about your current bandwidth and plan what you need to outsource or achieve with the software. For instance, LASSO has a 4-person marketing team that keeps strategy in-house but outsources execution. This allows them to focus on high-level work and hire experienced vendors to execute the nitty-gritty of their strategy.
On the other hand, larger companies with bigger marketing teams keep strategy and a part of their execution in-house. In that case, they’d outsource top-of-the-funnel writing and keep the product-oriented bottom-of-the-funnel content in-house. So, think about who is going to do what and how.
Next, review the budget you have to work with. Charlie Southwell, Marketing Director at Let’s Talk Talent, recommends looking at the year’s sales goals and revenue targets. Based on that, he allocates 10% of that budget to marketing, assuming that the business will grow by 20% that year.
Then, atomize those costs into different categories and allocate them based on expected costs: writers, editors, tools for different categories, employee benefits & perks, and contingencies.
Additionally, Tom Bangay, Senior Director of Content and Community at Juro, recommends considering your hiring plan, ramp time for new joiners, which channels are working (and scaling) best, and any economic/macro headwinds.
Ideally, 20% of profits is a good rule of thumb for established companies—but if you’re a start-up, 5 to 10% of your revenue goal is a good starting point.
Another issue with content marketing is that you’re playing the long game. It’s hard to predict the ROI of these channels. Here, you can use an organic growth forecasting model to predict it to a high degree.
In the image below, the template predicts how organic traffic and leads grow month-on-month based on the position of the keywords they’re targeting. Even though it works on certain assumptions like improvement in conversion rate and baseline metrics (which can be adjusted), you get a rough idea of what to expect from your investment.
Omniscient Digital’s Organic Growth Forecasting template
After you’ve allocated your budget and have your operations in motion, remember to evaluate your key performance indicators (KPIs) regularly. Nobody wants to waste time creating more eBooks because it creates the illusion of generating marketing-qualified leads (MQLs). If you know a certain tactic isn’t working, change it up and keep up with what your current customers want.
To better grasp performance and returns, deploy a dedicated tool to monitor and evaluate content data specific to your channel. Use tools like Google Analytics (for website), Google Search Console (for organic search), Hootsuite (for social media), and Mailchimp (for email marketing) to monitor these metrics. Double down on what’s working and eliminate tactics that aren’t bringing the returns you need. To do this, evaluate KPIs quarterly to give them enough time to pick up and show results.
Adjust your strategy as needed to optimize your results. It might include changing your content type, adjusting your marketing channels, or refining your messaging to better resonate with your audience.
Southwell says that they invest significant time in distributing its content at Let’s Talk Talent. This approach has helped them generate 150 downloads each month, even though it was created over three years ago. On the flip side, they invest in specific Facebook groups their target audience hangs out in simply because the sponsorship cost is worth the awareness and leads it’s bringing in each month. Even though these tactics initially had minimal impact, the eventual build-up indicated the investment was worth it.
It’s easy to dismiss a channel because it doesn’t seem worth it, but you must give it time. So, consistently invest and market on a channel for a fixed period before adjusting your budget.
Are you looking for a template to help you budget for the upcoming year? Use our tried-and-tested Content Scaling Plan template!
Although budgeting as a first-time leader might seem like there’s no starting point, no matter which stage your company’s at, lean into the company’s overarching business goals. Whether it’s sales targets, revenue goals, or industry benchmarks, you can access a ton of data internally and externally. Lean into those data points and allocate your budget accordingly.
By taking into account your revenue stage, industry, and marketing goals, you can develop a content marketing budget that aligns with their specific needs. Ultimately, you’re playing the long game and need to account for that to set realistic expectations for your content marketing program.
If you’re looking for a content management tool to bridge the gap between sales and marketing teams, start a free trial of Content Camel today.
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Content Camel is a sales enablement tool used for sales content management. High-growth sales teams use our system to quickly find and share the right content for each specific sales situation and measure content use and effectiveness.