Annual budget discussions… Most business owners and project leads dread this every year. And if you have several departments, it can feel like the financial hunger games – all of a sudden finance is everyone’s best friend and ally as you hope to knock someone else out of budget consideration.
Rather than staring at a spreadsheet guessing what you should do and allowing the dread to take over, ask yourself the ultimate question: How much should we actually spend on marketing next year – and where should every dollar go to actually drive growth?
If this question feels overwhelming, you’re not alone. Between shifting algorithms, emerging AI tools, and the pressure to be everywhere at once, it’s easy to feel like you're throwing money into a black hole.
At SongBird, we don’t believe in cookie-cutter formulas or spending money just to make noise. We believe in marketing with intention, clarity, and measurable impact.
Here is our practical, no-fluff guide to building a marketing budget that works as hard as you do.
1: Start with reality: Set your benchmarks
Before slicing up the pie, you need to determine the total size of the pie – and don’t lie to yourself about how much you actually have to spend... While every industry varies, standard benchmarks can provide a healthy baseline:
Maintenance mode (5% – 7% of gross revenue): If your primary goal is steady retention and slow, organic brand awareness.
Growth mode (8% – 12% of gross revenue): The sweet spot for established small-to-midsize businesses looking to expand market share, introduce new offerings, or outpace local competitors.
Aggressive scale / Early Stage (15% – 25%+ of projected revenue): Typical for startups, newly launched brands, or businesses entering heavily saturated markets that require rapid brand equity.
Pro Tip: Don't just budget based on last year's revenue. Factor in your target revenue for the upcoming year, balanced against your operating cash flow.
2: The 70 / 20 / 10 Framework for Growth
Once you have your total dollar amount, how do you distribute it? One of the most effective and resilient models is the 70/20/10 Rule:
70% proven foundations (core channels, PR, SEO, CRM)
20% emerging opportunities (Expansion)
10% Experimentation
70%: The proven foundations ("always-on" engines)
This is the bread and butter of your marketing machine. Allocate roughly 70% of your budget to strategies and channels that have consistently proven their return on investment (ROI):
Strategic brand messaging & PR: Establishing credibility, earned media mentions, and trust within your community and industry. Plus, earned media mentions are proving to be more valuable when it comes to AI visibility.
Content & search engine visibility: High-value evergreen content, website optimization, and email marketing to nurture existing leads.
Organic & targeted social: Connect with your core community with authentic, values-driven storytelling.
Customer retention & loyalty: Keeping your existing clients surprised and delighted (remember, retention is dramatically cheaper than acquisition).
20%: Emerging opportunities (scalers)
Use 20% of your budget to expand what’s showing early promise. This might include:
Scaling ad spend into a secondary platform that showed high conversion in preliminary testing (e.g., expanding from Meta to Pinterest or LinkedIn).
Collaborating with micro-influencers or brand ambassadors aligned with your values.
Sponsoring local or industry-specific community events to boost grassroots presence.
10%: Pure experimentation (wildcards)
We are operating in a time where those that don’t innovate in some way will get left behind. Reserve 10% for creative risks:
Testing a new medium (like video series, audio snippets, or interactive webinars).
Trialling new AI-driven marketing tools or creative automation.
High-concept PR stunts or seasonal experiential activations.
If an experiment flops, you've only risked 10%. If it strikes gold, you roll it into your 20% or 70% bucket next year!
3: Don’t forget the "hidden" budget items
When budgeting, teams often hyper-focus on media spend (ad dollars) and overlook the things required to make those dollars effective. Ensure your budget accounts for:
Creative & production assets: Photography, videography, graphic design, and copywriting. (Great ad spend behind poor creative is simply burning cash.)
Tools & infrastructure: Your email platform, CRM, social scheduling software, analytics, and website hosting.
Strategic expertise: Whether through an agency partner, consultants, or internal talent, budget for the brains behind the execution – not just the tools.
4: How to prioritize when the budget is tight
What if you're a lean, growing business and a 10% revenue allocation feels daunting?
Audit before you allocate: Review the last 12 months. Which two channels brought in 80% of your qualified leads? Cut the fluff, vanity projects that drained energy without driving conversions.
Double down on your owned channels: Paid ad costs fluctuate, but your email list, your website, and your customer relationships belong to you. Investing in high-converting owned assets yields compound returns over time.
Lead with story and authenticity: You don't need a Super Bowl ad budget to build genuine connection (while it would be nice…). When your messaging cuts through the noise and connects with what your audience genuinely cares about, smaller budgets pack a far larger punch.
Make next year your breakthrough year
Budgeting isn’t about restricting your ambition – it’s about giving your business a clear roadmap to turn creative ideas into tangible revenue.
Are you looking at next year's goals and wondering how to structure a strategy that fits your unique vision and budget?
Book a free consultation with me today.