Easiest question ever, you might think. My marketing budget is literally zero, or as close to it as I can manage. Question answered, the problem solved. However, the truth is that you will definitely spend something on your marketing.
Whether it’s the opportunity cost of spending your time on something besides your core art activities or slow drips of cash doled out via Facebook Ads it will eventually happen and the sooner you own it the more you can make out of any measly marketing budget.
Ultimately you need to set a marketing budget based on your business objectives. Your business objectives are subtly different from your marketing objectives but it’s more about the nuts and bolts of how you make money and where you intend your career and practice to go.
It’s time to get real and forget all the chat you’ve heard about Instagram follows, SEO tricks and the rest. This is about what your specific project needs, not what people with their own agendas are trying to sell you. Do you need an engaged audience to help build your profile? Do you need to sell out a short run of shows? You may want devoted patrons who follow your career or you might just need a one-off grant to help bridge a gap. This is all about you, where you’re at and what you need to make happen.
Working out your target cost per conversion
You need to think long and hard about what certain actions are worth to you. Are you selling tickets at $30? It might be more like $20 once you’ve taken out all the costs. Is a positive review worth $200 based on the number of ticket sales it could potentially generate? Calculate the total target revenue of each type of action and you’ll have your sales and marketing targets.
Once you’ve done that you can begin to think about what you’ll pay for each of those actions. For example, if a ticket is worth $20 to you, will you pay $2, or $5, to get that ticket sold? That’s the number that will ultimately be your sales and marketing budget – what you’ll pay to get people to take the action you want them to take. If it sounds basic, that’s because it is. Marketing people have sophisticated formulas to calculate ROI but this particular approach is an ad-hoc version, based on your experience, intuition and baseline practicalities of affordability.
Defining your activity cost
Once you know what that magic marketing target is, and you have a rough estimate of the total spend you need to allocate the next step is to determine which marketing activities to spend that precious budget on and how to track and measure that spend. Marketing activities can vary wildly in terms of cost and immediate pay-off.
Head hours and media
There are two main types of costs when it comes to marketing. One is the “head hours”, a phrase that comes from the advertising industry. This refers to the cost of the time you are buying from other people and crucially, from yourself. This can vary wildly depending on the expertise you’re engaging and their level of skill and experience. The main thing to remember here is to include the cost of your time. You are not an infinite resource, so assign your time a cost per hour. Remember that if marketing is not your area of expertise, you’ll need to factor the extra time you need to learn and refine new things too!
The second type of cost is your media spend. That’s the money that goes straight to buying advertising space from Google, Facebook, radio stations and poster distribution. It’s often less of a factor for small scale campaigns but the small pieces of money that you throw into Facebook and Instagram ads can really add up (no pun intended).
Tying your budget to results
At the end of the day, your budget is directly linked to your results. Not just your marketing results, your business results. Keeping on top of your investment and your return means developing a practice of looking under the hood of how your marketing is going, even if you’ve chosen to outsource pieces or the whole lot. Populate your costs and spending as you go and your results on a regular basis – we suggest monthly or fortnightly depending on the length of your marketing campaign. After all, the earlier you can identify a pattern the easier it will be to compensate for or capitalise on it!
Using our marketing budget template
Our ACF team knows how hard you work on your fundraising and that the bottom line is really important. To keep it simple and make sure we keep the focus on producing art and not on accounting we’ve developed a streamline budget tool just for our artists. ACF Budget template is straightforward, flexible and shouldn’t take more than thirty minutes to draft! How painless does that sound? Take a look here and let us know if you have questions or feedback.