Thank you for subscribing!

It's great to feel loved.

Top marketing budget planning methods in 2021 + a template

Jan 22, 2021 3 min read

Planning and managing your marketing budget is a vital part of your strategy. Not only does it help you drive your marketing initiatives forward, but it also keeps your team goal-focused. 


Perhaps, you’re worried that 2021 has already started – know that it’s not too late and we’ve got you covered. In today’s article, you’ll discover the top four budgeting methods suited for differently-sized companies. We’ll also include a pre-made template, so stick around! 

Top budgeting methods 

Typically, any well-established organization follows a certain budgeting method that’s been proven to work out for them in the past. Let’s take a look at the top budgeting methods along with the pros and cons. 

1.) Traditional or prior-year-based budgeting

One of the most commonly used ways to calculate your budgets is prior-year-based budgeting, also known as the traditional one. It considers data from the previous year and calculates the budget based on it. Excluding the incremental changes, everything remains the same as in years before. 

The prior-year based budgeting method is ideal for those looking for a simple solution – it’s not too time-consuming and you don’t have to start from scratch.

On the flip side, there’s a risk that you’ll invest too much in obsolete channels or initiatives that no longer bring value. This method assumes that all costs required in the past are still relevant. If you’re all about trying new techniques and running innovative projects, this method may not be for you. 

2.) Zero-based budgeting

This type of budgeting is the polar opposite of the prior-year-based one. Instead of calculating it based on past years, you start from scratch. By following this method, you’re able to evaluate how much value a certain marketing channel or initiative is bringing.

Once you do, you can then allocate your resources to projects that are supposed to bring results. Since you’re planning your budget without relying on historical data, you can discontinue obsolete initiatives and start fresh.

For instance, once you evaluate your product’s potential growth and predict user behavior changes, you can allocate your budget to cover necessary resources – what’s left can be invested in new project development. 

The zero-based budget is ideal if your company hasn’t been moving forward for a while. By following this method, you’re adjusting the budget to the overall strategy and KPIs while increasing ROI

On the other hand, you should consider that it’s a time-sensitive process – it can take up to three months to plan your budget. 

3.) Project-based budgeting

Also known as activity-based budgeting, this method helps marketers to plan budgets for projects individually. Typically, such projects are highly dependent on the company’s KPIs and have strict start and end dates. If you’re following this method, it’s wise to periodically review projects’ effectiveness and reallocate the budget, if necessary.

The biggest advantage of the project or activity-based budgets is that you’re aware of what you’re spending money on.

You may easily track your spending with Whatagraph financial dashboard.
cross channel report

Start Free Trial

4.) Priority-based budgeting

To plan your budget according to this method, you should make a list of tools, campaigns, or channels, starting with the most important item. This method is ideal if you need to make budget cuts – listing current costs by priority helps to determine what you can get rid of.

5.) Revenue-based budgeting

Finally, we have the revenue-based budgeting method: based on it, a marketing budget depends on the total revenue of the company. Depending on the industry you work in, you should set aside a certain percentage of the total revenue for marketing purposes. 

Some companies include all marketing-related costs in the percentage, like office rent or salary; meanwhile, others consider these costs as fixed ones – there’s no strict rule to that. 

Typically, this method is used in corporations and other well-established companies. It allows you to easily manage your expenses – they directly correlate with your businesses’ income. 

How to choose the right method 

Interestingly enough, the type of budgeting you choose highly depends on your company’s values. It can be influenced by the personal beliefs of the person picking the budget, too.

Regardless of the type, you select, as a marketing manager, you should plan the budget based on the channels you run. That’s why we’ve prepared a budget planning template for you – enjoy!

Roberta Aukstikalnyte
Written by Roberta Aukstikalnyte

Roberta is a young marketing enthusiast, eager to explore the latest marketing news or tendencies. As a content writer and editor, she strives to share industry updates with her readers in a well-written text.

Cross-channel marketing dashboards help you better assess the performance of ALL marketing channels. It's imperative that you, as a marketing professional, save yourself time and aggregate marketing metrics in one place. These cross-channel dashboards make long-term performance assessment really simple, as all of the data is found in one place.
Read more...
Mindaugas Skurvydas
Apr 20, 2021 9 min read
Today, we will find out more information about the other process related to data sources, format industry, data professionals, and the new cloud-based technology leader - data preparation.
Read more...
Whatagraph team
Apr 14, 2021 6 min read
In this article, we will provide you with general information about data transformation and will find out more about the data integration process: what are the main challenges that we can face, why we need data transformation, and how to use it in our business.
Read more...
Whatagraph team
Apr 14, 2021 8 min read