Marketing spend: The ultimate guide

Welcome to our comprehensive guide to marketing spend. In this guide, we’ll delve into all you need to know about marketing spend. We’ll cover what marketing spend is and outline all the most important elements that fall under the umbrella of marketing spend.

In the dedicated articles below, we’ll explore the importance and benefits of staying on top of your marketing spend – and the tips and tricks you need to do it.

What is marketing spend?

Marketing spend is the total amount of money a business allocates to marketing activities within a certain period – typically a quarter or year. The purpose of marketing spend is to help enhance brand awareness, attract and retain customers and, ultimately, drive revenue growth.

Typically, marketing spend includes costs associated with:

• Advertising: Paid promotions, including online ads, TV, print and outdoor advertising.
• Content creations: Creating articles, blogs, videos and other types of content.
• Digital marketing: Social media, search engine optimisation (SEO) and e-mail campaigns.
• Market research: Customer surveys, competitor analysis and other research to inform marketing strategies.
• Promotions and discounts: Offers to drive short-term sales or increase customer engagement.

Monitoring and managing your marketing spend effectively ensures your spend will give you the most value for your money. It helps you allocate funds to high-impact marketing channels that align with your business goals – and that can make a real difference for your return on investment (ROI).

With that being said, staying on top of your marketing spend comes with certain challenges that can complicate your efforts to get the most out of your money.

Deciding how to allocate your marketing budget across channels – like digital, traditional media or content – requires balancing historical performance with future predictions. It’s easy to miss the mark, and misallocation can lead to overspending on low-impact channels or underinvesting in high-growth opportunities.

If that wasn’t tricky enough to navigate, markets change rapidly due to evolving consumer behaviours, economic shifts and technological advances. If you don’t have the most flexible budget, reacting quickly to these changes can be challenging.

These are only a few of the challenges you’ll face when it comes to marketing spend. That’s why it’s so important to have a good grasp of all the elements that fall under the umbrella of marketing spend – and we’re here to make sure that you do.

To help you gain a thorough understanding of marketing spend, we’ve created this guide to take you through all you need to know.

We’ll cover the  following topics:

1. Marketing spend management
2. Marketing budget
3. Marketing budget management
4. Return on ad spend (ROAS)
5. Advertising budget
6. Ad spend tracking
7. Marketing costs
8. Marketing spend optimisation

Below, you’ll find a brief overview of each topic in our guide. We’ll dive deeper into each topic in the individual articles dedicated to them. Let’s get started.

The ultimate guide to marketing spend

1. Marketing spend management

Marketing spend is the total amount of money a company allocates to promoting itself, its products and services. It typically goes to a variety of activities, including branding, advertising, content creation, social media marketing and much, much more.

With so many activities, it’s important for marketers to stay on top of their various costs. That’s what marketing spend management is here for: it’s all about planning, tracking, analysing and optimising the funds allocated to marketing activities.

Key components of marketing spend management include:

• Budget allocation
• Tracking and monitoring
• ROI analysis
• Optimisation
• Forecasting and reporting

By combining data-driven insights with careful planning and ongoing optimisation, marketing spend management helps you maximise the impact of your marketing investments and ensure that your money leads to tangible and valuable results.

Marketing spend management 101

2. Marketing budget

A marketing budget is a budget that covers marketing-related expenses across various channels and strategies over the quarter or year. It’s what helps you balance the money you spend on marketing with your operational costs, and ensure your marketing efforts support your business growth – without breaking the bank.

Creating a marketing budget involves the following six steps:

1. Defining your business goals
2. Analysing past performance
3. Knowing your audience
4. Setting your marketing budget
5. Picking your channels and allocating funds
6. Monitoring and adjusting

It’s also important to know your current spend and to include the marketing tools and resources you’ll need in your marketing budget – and always remember to consider seasonality and to budget for creative assets.

Guide: How to create a marketing budget

3. Marketing budget management

Creating a marketing budget is one thing – managing it is another. Managing a marketing budget is about having a full understanding of what goes into that budget.

There are six key steps to effective marketing budget management:

1. Setting annual business goals
2. Creating detailed subcategories
3. Understanding your sales cycle
4. Analysing past performance
5. Choosing your strategies
6. Remaining flexible

With these steps, you’ll be able to ensure your marketing budget is well-managed and aligned with both your business goals and the current state of the market.

6 steps: How to manage a marketing budget

4. Return on ad spend (ROAS)

Return on ad spend (ROAS) is a marketing metric that allows you to calculate the revenue generated by the money you spend on ads, allowing you to measure how effective your digital advertising is.

The formula for calculating ROAS is as follows:

ROAS = revenue from ads / cost of ads

ROAS helps answer an essential question that every company asks themselves: ‘Are my digital advertising efforts actually worth it?’

The most common way to express your ROAS is as a ratio showing what you made against what you spent. For example, if your ROAS is £5 (i.e. you made £5 back for every £1 spent), it would be written as 5:1 – £5 revenue for every £1 spent.

Return on ad spend (ROAS)

5. Advertising budget

An advertising budget is the amount of money you spend on paid advertising for your brand, products or services over the quarter or year. It helps you allocate your resources effectively and ensure your advertising efforts align with your business goals while optimising your ROI.

To determine your advertising budget, there are eight key steps you need to follow:

1. Set clear goals and objectives
2. Review industry benchmarks
3. Determine your available revenue for advertising
4. Choose your budgeting method
5. Consider digital and offline advertising channels
6. Use data and analytics
7. Consider external factors
8. Monitor and adjust

By following these steps and putting careful thought into your advertising budget, you can set your business up for long-term success and stand out in an increasingly competitive market.

Advertising budget: What is it, and why does it matter?

6. Ad spend tracking

Ad spend tracking, or ad spend monitoring, is the process of monitoring, analysing and optimising the budget you allocate to your advertising campaigns.

There are plenty of reasons why you should be tracking your ad spend. It helps you maximise your ROI, control and allocate your funds better, improve your campaign performance, make data-driven decisions – and much, much more.

To do ad spend tracking right, you should:

• Set clear goals and KPIs
• Monitor your ad spend daily
• Leverage conversion tracking
• Track lifetime value (LTV) vs cost per acquisition (CPA)
• Review and adjust as you go

These tips will help you effectively monitor and optimise your ad spend and make sure your budget is used to its full potential while improving the outcome of your campaigns.

Ad spend tracking: What is it, and how do you do it?

7. Marketing costs

For any business looking to get their name out there, marketing is a valuable investment – and that makes it important to be prepared to fund the costs of your marketing efforts.

There are as many unique marketing budgets as there are companies. While this makes it challenging to estimate what your marketing costs will look like, it also means that your marketing budget is completely customisable to your unique business needs.

Some of the most popular digital marketing options today include:

• Web design
• Search engine optimisation (SEO)
• Pay-per-click (PPC) advertising
• Content marketing
• Social media marketing
• E-mail marketing

The exact costs of each option depend on your unique campaign goals, target audience and industry specifics – but with our breakdown, you’ll have a better idea of what to expect your marketing costs to look like.

Marketing costs: Breakdown

8. Marketing spend optimisation

Marketing spend optimisation is all about making use of your marketing budget to get the most value for your marketing investments. When done right, it doesn’t just boost the efficiency of your marketing efforts – it also helps you drive customer loyalty and reduce budget waste.

There are many things you can do to optimise your marketing spend, including:

• Prioritising high ROI channels
• Leveraging customer segmentation
• Implementing retargeting campaigns
• Using data-driven campaigns and predictive analytics
• Adopting incrementality testing
• Optimising creative elements through A/B testing

With these methods, you can ensure your marketing spend contributes to tangible outcomes while avoiding wasteful or inefficient spending.

6 tips: How to optimise your marketing spend