Creating the annual marketing budget can be a difficult task, especially when trying to explain every expense to a finance team that may not understand marketing. This can lead to frustration and overwhelm. However, there are practical tips that can help navigate the budgeting process smoothly.

1. Appoint a lead to run the annual budget planning process
In an ideal scenario, someone from the marketing operations team would manage the marketing budget with the support of a trusted finance partner. However, this is not always the case. To simplify the process, it is recommended to assign one person as the budget lead. This person should be the single point of contact for the finance team and be able to effectively communicate the budgeting needs to them. They should also plan enablement sessions and create a structured process to reduce stress and frustration within the team.

2. Prioritize costs based on impact
Not all costs are equal, and it is important to differentiate between different types of expenses. Start by identifying costs that are under contract and cannot be broken. These are essential for the business to run smoothly. Then, identify costs that are crucial for the marketing function to be effective. This includes items like paid media spend and partner marketing costs. Finally, identify costs that are considered “nice-to-haves.” These are expenses that can be cut if necessary without significantly impacting the team’s performance.

3. Avoid hard-coding budgets
A common mistake is locking the budget in for the entire year without considering any changes that may arise. It is important to regularly evaluate the planned expenses and make adjustments if needed. This requires frequent communication between the budget lead and each budget owner to review spending and ensure it aligns with the expected ROI.

By following these tips, marketers can navigate the annual budgeting process smoothly and feel confident in their allocated funds. It is crucial to have open communication between finance and marketing to ensure that the budget is allocated to initiatives that will drive business impact. With the right approach, the marketing budget can become a strategic asset rather than a source of frustration.