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How to Create a Marketing Budget Plan for 2025: Smart Spending & Cost-Cutting Tips

By July 1, 2025No Comments

Some of the most important aspects of a digital marketing plan are deciding how much money you are going to spend in your marketing efforts, and where you are going to spend that money, whether that be paid social, paid search, paying influencers, or on SEO services. If your business is aiming to maximize your return on investment, or ROI, while staying competitive, then knowing how to create an effective marketing budget is going to be crucial to your success or failure in this endeavor. A well-structured budget ensures that your business can drive growth, engage customers, and achieve measurable results without overspending. In this blog post, we’ll explore why a plan is important, where to prioritize your marketing budget, how to create a plan, and how to optimize your plan for success in 2025.

Why A Marketing Budget Plan Matters

A marketing budget is more than just a financial plan–it’s a map that can help you achieve your business goals. According to a Gartner report, in 2024 CMOs said that the average budget for the year had fallen by 15%, or 7.7% of overall company revenue. This is a 1.4% decrease from 2023. With budgetary restrictions due to rising advertising costs, along with variable demand due to less discretionary spending due to inflation, this decrease is not unexpected. And with fewer dollars available in advertising budgets, it can be even more important to ensure that your marketing budget is planned out effectively. This way every dollar can be stretched as far as possible.

Steps to creating a marketing budget

Define your marketing objectives

The first step to creating an effective marketing budget is to set SMART (specific, measurable, attainable, relevant, and time-bound) goals. A goal like “increase sales”, is not as good as “increase sales by 10% in the next 3 months”, or “generate 100 new leads per quarter”. These types of goals can guide your marketing budget plan, by allowing you to find specific areas where you can allocate resources, in order to achieve your marketing goals effectively. Using tools like Google Analytics to track your progress, can help ensure that your budget is aligning with your measurable goals, and allow you to keep track of your marketing objectives in an easier-to-view setup.

Assess Your Current Spending

Review your current marketing budget (or lack thereof), so that you can identify what is currently being done, what is working, and what still needs to be improved. Analyze your past campaign performance to determine which channels you are using or have used in the past–whether that be SEO, PPC, or Social Media advertising– delivered the highest ROI. For example: email marketing drives your conversions at the lowest cost per acquisition, thus it may be best to allocate the highest amount of budget to this high-performing channel. Conversely, lower-performing channels, such as a social media platform that generates low levels of engagement, at a higher cost per acquisition, might warrant spending cuts, and reallocating that budget elsewhere to maximize effectiveness.

Allocate Funds Strategically

There are many areas that you can expense your marketing budget on, but not all expenses are relevant for every situation. That is why it is important to ensure that you are not including the allocation of the ad budget towards irrelevant categories just for the sake of allocating the budget. Some of the categories that you may want to include in your budget are: Marketing team salaries, software costs, web hosting, ad spend, or marketing agency (outsourcing) costs. Each of these categories may be important to some businesses, but not all of them will be essential for all businesses, so it is important to pick and choose the ones that are most appropriate for your individual situation. One common approach to creating a marketing budget is the 70/20/10 rule:

  • 70% of your budget should be invested in proven, reliable tactics like SEO; 
  • 20% of your budget allocated to emerging channels, such as influencer marketing with newly popular users or new social platforms, testing their potential;
  • 10% to experimental initiatives, such as AI-driven tactics to explore new, emerging opportunities. 

This is a great way to balance your approach strategically, to ensure you have stable performance, while still expanding your efforts and fostering growth potential.

Factor in Essential Costs

All expenses should be accounted for in your marketing budget plan, including:

  • Ad spend: Costs for PPC, Social Media Ads, or Influencers
  • Tools & Software: Analytics platforms, CRM systems, or organic post scheduling tools
  • Staff & Agencies: Salaries for staff, freelancers, or fees from agencies
  • Content Creation: Costs for the creation of blogs, videos, or graphics that are used in all media formats

Each company or entity will have different needs, for example, some might not need analytics platforms, or might not need influencers to be included in their marketing budget plan, so it is important to tailor your plan to your individual needs, depending on your business’s size and the sector of the market you may be in, or may be targeted to.

Tips for Optimizing Your Marketing Budget Plan

Just because you have your marketing plan, and begin to implement it into your marketing efforts, doesn’t mean you can sit back and relax. As your plan unfolds, you still need to ensure that you make changes to your efforts as needed, as sometimes your plans don’t work out as expected. Measuring your success and morphing your plan as you go can be excellent ways to optimize your Marketing Budget Plan on a consistent basis:

  • Leverage free tools: Using free tools like Google Analytics gives you additional insights, without using up additional resources you can use elsewhere in your Marketing Budget Plan.
  • Repurpose content: Reusing blog post content for social media captions, and posting images on multiple platforms at a time can help reduce costs and maximize content utilization.
  • Focus on Data-Driven Decisions: use the data that gets generated from implementing your plan, to make tweaks as needed, and reduce waste on irrelevant or under-performing content or platforms.

By implementing a well-crafted marketing budget plan, you can ensure you are doing all you can to drive your business growth, in the most cost-effective way possible. By defining clear objectives, assessing current spending, and allocating resources strategically, regularly optimizing performance, you can create a marketing budget plan that maximizes ROI and helps grow your business and adapt where needed as new platforms and technologies are developed and released.