Manufacturing Company Marketing: How to Set a Digital Marketing Budget
Learn the key steps to create a manufacturing marketing budget that balances spend, strategy, and measurable results.
Table of Contents
- Why Setting a Budget Is Important
- Questions To Ask When Setting A Marketing Budget
- Factors for Setting Your Manufacturing Company’s Digital Marketing Budget
- What Do Manufacturing Companies Spend Their Marketing Budget On?
- Questions to Ask When Allocating Funds
- Partner With A Digital Marketing Agency For Manufacturers
When it comes to marketing, one of the key components to consider is your manufacturing company marketing budget. Effective marketing for manufacturing companies begins with a strategy, and that strategy is often directly connected to your budgeting. While an investment is needed, a balance must be made — spending too much on ads or marketing that doesn’t produce results is equivalent to throwing money away. On the other hand, having too low a budget to allocate toward digital assets, ads, and other marketing tactics can also hinder your progress toward marketing goals. Before setting up your budget for marketing, it’s important for manufacturing companies to define their goals and create a plan that will allow them to achieve those goals.
Why Setting a Budget Is Important
One of the most important steps to take before beginning a manufacturing marketing strategy is to set a reasonable budget that allows you to make progress toward each of your goals. Having a budget set before choosing your marketing tactics will guide the choices and assets that you prioritize. For example, if you need a larger budget for targeted ads, then you may have less to allocate toward website content or LinkedIn marketing. With your budget in mind, you can choose which tactics are your top priorities and which are lower priorities.
If you’re not sure where to start with setting your budget, take a look at the industry benchmarks or common budgets set by other manufacturers in your area. However, these are just a starting point, and you should analyze your own goals and resources before setting a budget. From there, consider the ROI of your digital marketing spend. To optimize ROI, you need a budget that gives you enough spending power to develop a variety of tactics and execute them effectively, but prevents aimless or non-strategic spending that won’t return the results you need.
Questions To Ask When Setting A Marketing Budget
When you’re beginning to build a marketing strategy for your manufacturing company, ask yourself:
- Do your business goals for the year include ambitious growth plans?
- Are you planning a new product launch?
- Will you be rebranding this year?
- Is your website up-to-date and modern?
- Do you have enough evergreen marketing collateral (brand anthem videos, flyers, webinars, etc.) that can be leveraged at sales events throughout the year?
If your B2B manufacturing company is planning on any big growth or changes this year, you may need to set your digital marketing budget at the higher end of the spectrum.
Factors for Setting Your Manufacturing Company’s Digital Marketing Budget
Set Your Goals
Your budget should always be set after you’ve defined your goals, both for your business and for marketing. The goals should inform the budget, which should in turn inform your strategy and tactics. Examples to consider:
- Business Goal: Increase revenue by 15% this calendar year
- Related Marketing Goal: Increase ad spend to generate more leads, which in turn produce more revenue.
- Business Goal: Build better connections with clients and prospects
- Related Marketing Goal: Create and automate email drip campaigns, LinkedIn posting, and contact follow-ups
- Business Goal: Improve visibility of past work you’re proud of
- Related Marketing Goal: Update and optimize your website to better showcase your work with case studies, product features, and more.
Determine Monetary Number
Once your goals are in place, it’s time to think through the amount of money you should allocate to digital marketing in order to achieve your goals. The U.S. Small Business Administration recommends:
- Small businesses with annual revenues of less than $5 million allocate between 7-8% of their revenue to marketing.
- Example: If your company has an annual revenue of $1 million, your marketing budget should be about $75,000 annually.
For larger companies with revenue over $5 million, a good guideline for B2B businesses is:
- Spend 2-5% of annual revenue on marketing.
- Example: A company with $50 million in annual revenue would spend between $1 and $2.5 million on marketing each year.
Keep in mind that your budget needs to include all aspects of your marketing, including paid advertising, marketing software, tracking and automation tools, marketing agency or personnel fees, and building and maintaining your website.
Demonstrating ROI
One of the most important aspects of a marketing budget for manufacturing companies is ensuring that the money spent produces a return on investment. In order to demonstrate that return for your marketing, the first step is to identify Key Performance Indicators, or KPIs, and stick to your allocated marketing budget. With your KPIs in mind, you’ll be able to quickly quantify success for tactics that are working or redirect budget from tactics that aren’t providing ROI. With these numbers in hand, you’ll also be able to justify that the benefits of digital marketing for manufacturers outweigh the costs. You can always adjust your budget up or down based on results, too — marketing should be constantly monitored and iterated for success, so your budget doesn’t have to be set in stone. The key is to get data and use that data to drive your decisions.
What Do Manufacturing Companies Spend Their Marketing Budget On?
Once an overall budget is set for your marketing, the next step to take is to determine allocations for each tactic. Industry trends illustrate certain areas that manufacturing companies tend to focus on with their marketing spend:
- Mid-sized B2B manufacturers spend an average of 11.6% of their marketing budget on customer experience initiatives.
- Digital marketing (compared to traditional marketing) currently accounts for 53.2% of manufacturers’ marketing budgets.
- Customer relationship management is often the largest component of a manufacturing company’s digital marketing budget.
Of course, when determining how to allocate your budget, it’s important that you don’t just blindly follow industry trends. Each company is different, and therefore, marketing should reflect your unique business, your offerings, and your goals. By taking your business goals into account and analyzing the gaps in your sales funnel, you can identify pain points, inefficiencies, and other areas where marketing spend may help.
Questions to Ask When Allocating Funds
Choosing where to allocate your marketing funds can be challenging, so ask yourself these questions to help inform your decisions.
- Are you struggling to generate new leads?
- Are you struggling with nurturing prospects through the lower part of the funnel?
- Do you need a higher sales conversion percentage?
- Do you need help with initial follow-ups?
- Do you need more visibility for your pipeline?
Your digital marketing spend will differ depending on your target areas of growth.
Partner With A Digital Marketing Agency For Manufacturers
When it comes to marketing, many B2B manufacturing businesses struggle to set a reasonable budget, which can lead to lower ROI on the money they’re spending. At ZAG FIRST, we have years of experience marketing for companies in the manufacturing industry, and we know how to execute on tactics that work, adjust for industry changes, and target the prospects you want to connect with. If you’re not sure about setting a budget, we’re here to help!
Contact us to learn more about how we can help you set your budget, create your plan, and achieve your goals.
