How to set your content marketing budget for 2018-19
Like anything, budgeting is a mix of art and science. To make sure you've allocated the right amount to achieve your goals, read on.
Kate Thompson
It's about this time of year many marketers and business leaders begin documenting next financial year's budget. There's no doubt it’s challenging to forecast what lies ahead when you're knee deep delivering on this year's goals, so I thought I would share some tips to help you with your content marketing allocation.
The most critical piece of advice I can give is this: your business and marketing plan is key. It's the strategic roadmap for the year ahead, because it includes key initiatives and tactics, a breakdown of resource and costs, and desired outcomes these activities are geared to effect. Showing activity across a calendar view is also useful, as it can demonstrate the pacing of your investment, potential bottlenecks with resource allocation, and how strategies align to category and seasonal trends.
In short, your marketing plan anchors the budgeting process and gives you strategic focus: if you don't have one, start here.
As a general rule of thumb, total marketing investment tends to sit between 5 and 15% of a company’s total revenue. According to the 2017-2018 Gartner CMO Spend Survey, the average marketing budget in 2017-18 sits at 11.3%, down from 2016-17. Smaller businesses tend to invest at the lower end, perhaps 5%, and businesses penetrating new markets, building their brand, or chasing category growth will be likely to tip in 15% or more.
Within the overall marketing budget there's a lot to consider. Overheads such as salaries and bonuses, direct costs such as agency retainers, freelance expertise, consultants, marketing technology, subscriptions and research, and where you'll spend the bulk of it – media and production. There is not a one-size-fits-all approach for what's ‘right’; spend will vary depending on your business and industry.
That said, there is some great theory to consider from the IPA on media effectiveness, which espouses the importance of balancing marketing campaign investment across brand and tactical activations at 60:40. And, when it comes to choosing your marketing technology stack, don't get too caught up chasing bells and whistles you'll probably never use. A lot of marketers are overspending here, essentially buying a Maserati when all they need is a Subaru.
Suffice to say, it doesn’t matter what the brand is: content marketing is an important lever in today's marketing landscape. It helps a business to be found, to be relevant and to be useful.
Let’s take a top-level look at how much you'll need to do it well. I've calculated average total investment across four scenarios based on the data from Gartner and ADMA above.
Table 1: Average marketing investment in Australia
1 Average marketing budget allocation of 11.3% (Gartner, 2018)
2 Average portion of marketing budget allocated to content marketing of 23% (ADMA, 2018)
Looking at Table 1, if you have a business that generates a total revenue of $5 million in a financial year, you would invest $565,000 in marketing overall and 23% of that (or $129,950) in content marketing – which is just over $10,000 each month – to reflect best practice. Considering these figures also account for salaries, technology and other non-media expenses, they feel right.
Now that we've got a top-down approach, it’s time to consider how this should be tackled from the bottom-up. There are five main content marketing areas that need to be considered:
Overall, the budgeting process is quite involved and now I think of it – much more science than art. There's a lot to consider, from business planning to content strategy and everything in between.
I hope this has given you a few new things to consider. As always, you can contact me directly with any questions and I'd love to help where I can if you need some specialist agency support. Email me at katethompson@hardiegrant.com
Kate Thompson is strategy director at Hardie Grant Media. To win her over bring craft beer, coffee or both.
The most critical piece of advice I can give is this: your business and marketing plan is key. It's the strategic roadmap for the year ahead, because it includes key initiatives and tactics, a breakdown of resource and costs, and desired outcomes these activities are geared to effect. Showing activity across a calendar view is also useful, as it can demonstrate the pacing of your investment, potential bottlenecks with resource allocation, and how strategies align to category and seasonal trends.
In short, your marketing plan anchors the budgeting process and gives you strategic focus: if you don't have one, start here.
What’s a normal annual investment?
As a general rule of thumb, total marketing investment tends to sit between 5 and 15% of a company’s total revenue. According to the 2017-2018 Gartner CMO Spend Survey, the average marketing budget in 2017-18 sits at 11.3%, down from 2016-17. Smaller businesses tend to invest at the lower end, perhaps 5%, and businesses penetrating new markets, building their brand, or chasing category growth will be likely to tip in 15% or more.
Within the overall marketing budget there's a lot to consider. Overheads such as salaries and bonuses, direct costs such as agency retainers, freelance expertise, consultants, marketing technology, subscriptions and research, and where you'll spend the bulk of it – media and production. There is not a one-size-fits-all approach for what's ‘right’; spend will vary depending on your business and industry.
That said, there is some great theory to consider from the IPA on media effectiveness, which espouses the importance of balancing marketing campaign investment across brand and tactical activations at 60:40. And, when it comes to choosing your marketing technology stack, don't get too caught up chasing bells and whistles you'll probably never use. A lot of marketers are overspending here, essentially buying a Maserati when all they need is a Subaru.
How much of your marketing budget should you allocate to content?
It gets really grey when you consider how companies are approaching new kids on the block, like content marketing. Earlier this year I wrote an article that explored trends from the 2018 ADMA Content Marketing Report. This report suggested the average Aussie marketer invests 23% of their marketing budget in content marketing. For more committed content marketers, spend increased to an average of 30%, and for respondents labelled as 'somewhat committed' it dropped to 19%. Again, depending on the lifecycle of your business, the category and a bunch of other variables, investment will differ.Suffice to say, it doesn’t matter what the brand is: content marketing is an important lever in today's marketing landscape. It helps a business to be found, to be relevant and to be useful.
Let’s take a top-level look at how much you'll need to do it well. I've calculated average total investment across four scenarios based on the data from Gartner and ADMA above.
Table 1: Average marketing investment in Australia
|
Total revenue ($) |
Marketing investment1 |
Content marketing allocation2 |
|
$1,000,000 |
$113,000 |
$25,990 |
|
$5,000,000 |
$565,000 |
$129,950 |
|
$20,000,000 |
$2,260,000 |
$519,800 |
|
$50,000,000 |
$5,650,000 |
$1,299,500 |
1 Average marketing budget allocation of 11.3% (Gartner, 2018)
2 Average portion of marketing budget allocated to content marketing of 23% (ADMA, 2018)
Looking at Table 1, if you have a business that generates a total revenue of $5 million in a financial year, you would invest $565,000 in marketing overall and 23% of that (or $129,950) in content marketing – which is just over $10,000 each month – to reflect best practice. Considering these figures also account for salaries, technology and other non-media expenses, they feel right.
Now that we've got a top-down approach, it’s time to consider how this should be tackled from the bottom-up. There are five main content marketing areas that need to be considered:
- Content strategy – a content strategy and content marketing plan waterfalls from your overarching marketing and brand plans. It is something you document infrequently but revisit regularly and optimise as you learn more about your audience(s). If you don't have a content strategy, allocate one to three months (depending on the size of your business) to perform this work. Or, you can work with an agency like Hardie Grant Media to help you out. End to end it covers off things such as a content audit, persona development, message hierarchies, content pillars, editorial, and channel plans.
- Content planning and ideation – most content is planned in advance as part of a collaborative process. The best plans also allow for topical content or 'planned spontaneity'. This task usually falls to an editor, content marketing manager or content producer, and involves keeping a current content and editorial plan that reflects user interests. The main budget consideration here is the time it takes to research relevant and topical content, manage the plan, and delegate or commission work. Content planning also benefits from technology – from basic tools such as Google Docs right through to advanced tools such as SEMRush and Curata.
- Content production – potentially the most creative part of the entire content marketing process. This is where the content marketing team are crafting articles, working with agencies on video shoots and designers on illustration – generally bringing stories to life across media. Sometimes, particularly with enterprise operations, the process is helped along with a workflow tool such as Woodwing.
There's a great planning model 'Hero, Hub, Hygiene', which neatly demonstrates how different types of content contribute to growing your brand. The basics of the model suggest hero content is designed to arrest people and generate brand awareness, which means it’s usually a tent pole moment in your marketing calendar reserved for once a year at most; hub content is for your prime prospect and is largely ‘push’ content that comes to life in campaigns; and hygiene content is ‘always on’ and designed to appeal to people based on their search behaviour or intent to solve a problem. How much you allocate to ‘Hero, Hub, Hygiene’ varies across format, frequency, quantity, and quality. As a general rule you will invest heavily in a hero piece and less so in hygiene content – but this doesn't mean quality and creativity go out the window! - Content distribution – content marketing uses paid, owned, and earned media to get content into the hands of your prime prospects and loyal customers. Web, social media and email seem to be the universal channels most brands use in their content marketing mix. WordPress and Squarespace are popular for blogs, Mailchimp is a great tool for email, and Buffer or Hootsuite are hugely popular for social. All of these are affordable, even for small businesses. You will need to pay to play on platforms such as Facebook or Outbrain and you might need to partner with talent or influencers too. How much you allocate here can vary from 20 to 60% of your total budget. The reason for that is that there's really little point creating great content if no one sees it!
- Analysis and optimisation – understanding how your content is performing is critical to improve and grow. On the web you might like to integrate analytics tools like HotJar or Optimizely, and use Google Analytics or Newsroom.ly too. Social media is best helped by a conversation monitoring and content management tool such as Nuvi. There are also tools that help you feed all data together in a single dashboard such as Tableau or PowerBI. The critical thing is that you have a person dedicated to interpreting the data and making recommendations. A large organisation or agency would have an analyst, usually as part of a strategy or research function; smaller businesses might have this as the responsibility of the content marketer. Either way, measure what matters – i.e. what aligns to your business, marketing and content marketing objectives.
Overall, the budgeting process is quite involved and now I think of it – much more science than art. There's a lot to consider, from business planning to content strategy and everything in between.
I hope this has given you a few new things to consider. As always, you can contact me directly with any questions and I'd love to help where I can if you need some specialist agency support. Email me at katethompson@hardiegrant.com
Kate Thompson is strategy director at Hardie Grant Media. To win her over bring craft beer, coffee or both.
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