For many construction business owners, budget allocation is a common struggle. You probably wonder how to spend your money on campaigns, how to make the most of it for all your marketing efforts, and how to develop a realistic marketing budget plan.
If you are currently stuck planning your marketing budget for this year and struggle to understand how to manage it, this blog is for you. Find out what marketing budget allocation is all about, the 70/20/10 rule, and, most importantly, some of the best practices that can help you allocate your budget cost-effectively and realistically.
But What is Marketing Budget Allocation?
The amount of budget a business or organization allocates to every item of expenditure under a marketing plan is called marketing budget allocation. In essence, it is a limit of money that workers cannot exceed whenever expenses are charged in a given amount of time.
For a lot of business owners, budget allocation refers to the maximum amount to spend on a digital marketing plan. It only makes sense that as a construction business owner, you need to optimize your marketing spending on all efforts that aim to reach your target audience, increase sales, and gain more leads.
Also, keep in mind that, as of the present, it was calculated that by 2026, digital spending worldwide will reach 836 billion dollars. So, it only means you need to come up with a realistic budget plan that does not waste additional expenses and will work best for your business and marketing needs.
What is the 70/20/10 Rule in Marketing Budget?
The 70/20/10 rule is a widely recognized and widely implemented approach for allocating marketing budget. This approach provides a concise and clear breakdown for distributing the budget into three main categories, each giving a unique purpose.
- 70% for Proven Tactics
A huge portion, 70% to be exact, is expected to be allocated to proven and time-tested marketing tactics. These are the most reliable methods that will consistently deliver positive results for your construction business. When you invest a huge portion of your budget in these tactics, your business can surely capitalize on its track record of success, delivering stable growth.
Ultimately, it ensures a strong foundation for all your marketing efforts now and in the future.
- 20% for Innovative Tactics
To remain the leader in the market, putting aside 20% of your marketing budget for the latest and innovative strategies is important. This allocation will allow your construction business to experiment and explore new and cutting-edge digital marketing approaches. By welcoming new ideas and strategies, your company can differentiate itself from its biggest competitors and discover more innovative methods that produce bigger rewards.
- 10% for Experimental Initiatives
Trying out a new level of risk may lead to great rewards over time. With 10% of your marketing budget allocated for experimental approaches, your construction business can have the opportunity to try out bolder marketing campaigns that no other business has done before. While this approach may have higher risks, it also has a big potential for greater returns.
The 70/20/10 rule will offer you a framework that balance out the need for stability and certain returns, while also aiming for innovation and business growth.
A Simple Marketing Budget Breakdown
While we introduced and discussed the 70/20/10 rule above, the guideline below is more specific. This is more practical, especially if you are looking for a quick approach. In other words, this breakdown is a great starting point for your marketing budget plan.
1. Spend about 5-6% of your entire budget on the following strategies below:
- Content marketing and implementation
- SEO (We highly recommend combining Local SEO with content writing always)
- Channel marketing, referral partnerships, etc.
- Reputation and loyalty program
- Event marketing
- Video marketing
- Surprise expenses + experimentation with new strategies and channels
2. Spend a little more, about 7-8%, on each of the following strategies:
- Website development and maintenance
- Social media marketing
- Market research
- Analytic tools and services (website performance, customer behavior, etc.)
3. Spend the most (About 8-15%) on the following, as they apply:
- Paid search and other display advertising efforts
- Other Traditional advertising (non-digital)
Best Practices for Marketing Budget Allocation
When allocating a budget for campaigns dedicated to your construction business, you should follow all the best practices our experts singlehandedly picked for you. The following best practices can help you lay out your budget allocation more effectively:
1. Learn the core business priorities that require more focus
First and foremost, you have to dive deep into all your construction company’s objectives.
This is where you need to figure out your present and future priorities that require more attention. Also, the big question is: What is your marketing strategy for the next months and years? You need to come up with a holistic picture when it comes to this.
Once you have gathered all the information you need and answered your questions, the next thing you will do is support the different goals and priorities you have noted with digital marketing. Doing so can give you a clear idea of how to balance your marketing budgeting efforts across different online marketing pursuits.
Here are two sample scenarios that emphasize business goals that you may find yourself and your team in the future:
- Your marketing strategy will generate leads and strengthen your construction brand.
- A launch of your new construction services will be held at the end of the quarter this year. For that reason, your company is expected to focus on brand awareness and gain more leads.
2. Review the performance of your past campaigns
There is so much you can gain when you are taking notes on your previous campaigns. When you keep an eye on your previous campaign performances, you can use the data to guide you in allocating the marketing budget. It can set the tone for your marketing budget moving forward.
This is where you need to learn more about the marketing tactics and approaches you implemented, the results, the gaps, and the areas that you might have skipped. Choose the strategies that worked best for your campaigns, and leave the ones that are ineffective.
Did your ad campaign bring you more leads? Then, adopt it for your future campaigns. Were the results from your content marketing efforts quite disappointing? Then, it may be the perfect time to reassess.
3. Identify the right KPIs that can help meet your business goals
In many cases, a lot of your digital marketing expenses mainly focus on goals like lead acquisition, brand building, and sales. For every single one of these goals, KPIs can capture the actual progress.
- Branding performance can be measured by your social media followers and social engagement.
- Lead generation can be measured by the number of signed-up accounts and people subscribing to your newsletters.
- Sales can be captured by overall purchases, order value, etc.
There are more KPIs or Key Performance Indicators out there that you need to know and include on your list. All of them can help you track progress on all your marketing objectives. Determining the right KPIs can absolutely help you come up with your ideal spending for all your marketing efforts.
4. Address your marketing budget by channel
Another thing you should do is to divide the funds you have in the right proportion on the right online channels. However, there is no easy way to determine the best channel for your digital marketing strategy. The size of your company, industry type, and your target construction clients are some of the factors that you need to consider when deciding the best channel to invest.
For your construction business, we always highly recommend trying out the omnichannel approach. This is an integrated approach across Facebook, Instagram, LinkedIn, and other social media platforms. Another effective way that can help you choose the right channels is by creating buyer personas and evaluating customer behavior data.
5. Scope out the competition
Your biggest competitors are one of your greatest resources when it comes to allocating a budget for your digital marketing campaigns. Make sure you pay attention to your competitors’ marketing activities and expenses. Find out what marketing methods they are currently investing in and how these methods help them attract a bigger audience and increase sales.
Having an understanding of what your competitors are doing in the digital marketing space provides you with many valuable budget insights:
- Unique selling proposition: Differentiating from your competitors is key. If your competitors are ignoring a particular marketing channel, it makes sense on your part to allocate a budget there and invest directly.
- Competitor spending patterns: Determining where your competitors allocate their budget can hint at potentially profitable marketing channels.
6. Account for production expenses and additional costs
To make your future marketing strategies truly successful, your production approach must be top-notch. Below are some of the production costs you will add to your marketing budget in no time:
- Market research
- Outsourcing costs (agencies or freelancers)
- Software subscriptions
- A/B Testing
- Latest tools
Ultimately, we also want to emphasize the importance of having a clear idea of the potential additional costs that will add to your marketing budget. They are as follows:
- Contract cancellation fees
- Tech support services
- Legal consultations
- Content/Design revisions
With all the best practices we discussed above, one by one, the final touches will be compiling all the costs and turning them into your ideal, comprehensive budget and putting all your marketing efforts into motion.
Finalize Your Marketing Budget Allocation with ConstructionMarketing.io
In summary, allocating your funds properly in 2024 is a critical step in achieving all your business goals for this year. A proper marketing budget allocation provides financial control, aligns with your goals, and ensures resource allocation is efficient.
Remember to always be data-driven, flexible, and open to exploration as you navigate the reality of budget allocation. Also, never miss the opportunity to work alongside a trusted agency!
We are ConstructionMarketing.io, a leading and trusted construction marketing company with expertise in budget allocation and optimization. Our team of experts will assess all your campaigns to determine cost savings potential. We will then proceed to propose a realistic marketing plan for your construction business with budget options and reasonable timelines.
Get in touch with us today and find out how we can help you with your marketing budget.