4 Ways to Rethink How You Manage Your Content Marketing Budget
According to a 2016-2017 Gartner Research CMO survey, B2B and B2C companies spent an average of 12% of their annual 2016 revenue on overall marketing. A little less than a third of that budget was devoted to content marketing for the year. It’s no wonder so many companies and brands need help with their content marketing—they’re not properly allocating funds to create content that provides real value to their customers and industry.
More and more companies are realizing that content marketing is a 12-month, 365-day operation—and they need to adjust their budget accordingly. This means rethinking how to invest in your content marketing budget. Here are a few tips to help you get started.
Use Your Editorial Calendar to Inform How You Allocate Your Budget Year-Round
Any good project manager can tell you that the budget for a given project is determined by the production schedule and end date. That makes perfect sense for any project other than content marketing—because content marketing doesn’t have an end date. In this sense, content marketing is a not product; it’s an ongoing operation. Instead, we recommend using your editorial calendar to reverse engineer the allocation of your budget.
A strong editorial calendar—one that details special industry events, product releases and launches, content creation schedule, coverage matrix, etc.—is essential for the success of your content marketing. But it can also be used to shape where you allocate your budget and resources. By looking at your editorial calendar from a 30,000-foot view, you can see if there are costly or high-volume needs and projects in certain months and/or quarters that require more money than others.
Ideally, you and your stakeholders have aligned on an exact figure for your brand’s entire marketing budget, and you know that about one-third of that will be spent on content marketing throughout the year. You don’t just want to divide the marketing budget by quarters or months. Take the time to analyze when your editorial calendar needs more money and when it doesn’t, and allocate your budget accordingly.
Use Publishing Frequency and Volume to Determine Your Baseline Content Marketing Budget
In the past, we’ve recommended that you use your own budget to determine how often you should publish content, but you can also do the reverse and use publishing frequency to determine your content marketing budget.
This method may be useful for brands entering the content space for the first time or entering a different one (like video or podcasting). First things first: think about how many pieces you want to produce over the next week/month/quarter/year. If you want to create one video a week for the year or three new videos a month in the first quarter, you have your numbers.
Now you just need to remember the costs of content strategy, creation, and distribution (more on that in a bit). Depending on the infrastructure of your content marketing team—freelancers, in-house team, content marketing partners, or a combination of all three—you can get a rough estimate of your hard costs, which include staff, licensing, and paid media. Budget aside, also consider how much time internal resources will take to track, report, plan, and optimize content based on performance.
The key is to estimate the number of content pieces you’d like to produce and calculate how much that costs. If it is unrealistic, keep calculating to find that so-called magic number, and then create an editorial calendar, coverage matrix, content marketing funnel, editorial personas, and more to figure out how to “stack” that content for your content strategy. You can also hire consulting experts to help develop your plan and budget.
Determine How Much You Need to Spend on Creation vs. Distribution
The money you spend on creation versus the money you spend on distribution often depends on the type of marketing. For example, traditionally in above-the-line (ATL) advertising, marketers spend approximately 10-20% on the creation of advertisements and about 80% on paid media to get it in front of target audiences. That means an advertiser may spend only 20% of its budget to create a TV spot, while the remainder is put into the advertising fee just to broadcast it. That is a creation to distribution ratio of approximately 1:4.
Content marketing also has its own unique ratio of creation to distribution, otherwise known as the ratio of non-working spend vs. working spend. According to Percolate, non-working spend is the amount dedicated to the creation of content, while working spend is what’s used on placing that content in front of an audience. Since content marketing should leverage owned and earned channels more than paid ones, its working spend is considerably less than that of traditional marketing. It instead requires more of an investment in non-working spend, e.g. resources/time/budget on creating great content.
Meet with Stakeholders to Decide Who Pays for What
Remember the stat from above: B2B and B2C companies spent an average of 12% of revenue on their overall marketing budget. Within that marketing budget, B2B marketers use an average of 29% of their budget for content marketing, while B2C marketers use an average of 26%.
In a perfect world, budgets would never overlap with one another. However, a lot of content marketing overlaps with other parts of your marketing budget, including email marketing, social media and paid advertising, search engine marketing, marketing site costs, etc. That doesn’t even include staff, software, ad dollars, and more.
What’s more, content doesn’t just support marketing; it’s also cross-functional. Content supports other parts of your business—HR, business development, sales, recruitment, and so on—but it’s tricky to navigate budgets and funding when content is vital to so many operations.
So the question becomes, “How much of the money is coming out of your content marketing pot versus another department’s?” The simple answer: collaborate with stakeholders.
A “stakeholder” is anyone on your team who is affected by the content you plan to publish. They can be members of the sales team, product team, marketing team, investors, partners, or other important decision-makers who are accountable to driving results. You’ll need to consult with them to decide whose money is being used to produce a piece of content and how much it will cost. This also involves deciding which formats you want to use (whitepapers, blog posts, videos, etc.) and where that content is being distributed (whether you are using paid, earned, or owned channels).
You don’t have to follow every step we’ve listed here. The point is that you are now rethinking your budget and tailoring it to your specific goals, needs, and everyday realities. Of course, if you’re daunted by the task—and unsure of specific figures, budget breakdowns, and collaboration—start small, or use a partner like Quietly to help broker discussion and neutralize internal politics while introducing the best content marketing budget practices.