Downsize a marketing budget

Business Benefits

Decrease marketing spend with minimal loss of effectiveness.


Review your core marketing KPIs and rank them in order of importance to your business.

A clear understanding of your KPIs helps to decide on the most effective tactics, tools, and marketing tools for your audience. For example, if one of your KPIs is to increase lead conversion rate, you can focus your budget on tactics designed for lead generation.

List out your paid and organic marketing tactics in a spreadsheet. Then, evaluate the direct impact of each tactic on your marketing KPIs.

Where possible, quantify the impact of each tactic and channel in metrics like engagement, conversion rate, and cost per acquisition. Use reporting tools like Google Analytics to review performance of each tactic.

Eliminate any tactics that have no clear connection to any of your core KPIs.

For example:

  • If organic Facebook doesn’t satisfy your KPI on lead conversion rates, but works towards your social media and brand engagement KPI, it should remain in place for now.
  • If paid Twitter doesn’t satisfy any of your KPIs, including lead conversion rates and brand engagement, it can be eliminated.

Keep a record of the tactics you are eliminating. Even with multi-touch attribution models, it can be difficult to measure the indirect impact of a tactic on your marketing success. The ability to re-activate tactics can help to anticipate any unanticipated performance drops.

Use your evaluation of current marketing tactics to identify tactics with lower spend that deserve more emphasis. Increase their prioritization compared to paid tactics and monitor the impact on your KPIs.

If marketing performance continues or improves, continue the shift until you begin to see a noticeable decrease in spend on your higher cost tactics.

Efficiently reducing marketing spend depends on finding the balance between low-cost tactics and tactics that best meet your KPIs.

The average SMB spends $300 to $500 per month on email marketing, but $9,000 to $10,000 per month on paid search engine marketing. However, organic replacements of paid efforts, like SEO instead of SEM or organic Facebook instead of Facebook ads, are not linear.

If you have at least two months before you need to make cuts in spending, test paid media tactics against each other and measure success with your marketing KPIs.

  1. Identity two paid tactics you want to evaluate against each other.
  2. Divide your upcoming marketing period into three segments of equal length.
  3. In the first time segment, run only the first of your two tactics along with the rest of your media plan.
  4. In the second segment, run only the second of your two tactics along with your media plan.
  5. In the third segment, run both tactics together along with your media plan.

Evaluate each time segment according to your KPIs. Eliminate the underperforming tactic. The third segment is your control: if it significantly outperforms the other two, cutting will result in a marketing performance decrease.

List your tools in a spreadsheet with monthly and annual costs. Ask: Is this platform crucial to our marketing success? Are any of its features duplicated in another tool we use? What costs would we incur if we stopped using this tool?

Marketing tools can account for as much as 50% of your marketing operating budget. A review of tools can reduce overlap and focus your budget only on platforms that improve your marketing and media efforts.

For example, for any organization using SEO, a keyword research tool is crucial to success. However, other platforms in the current deck, like a content marketing or competitive research tool, might also have keyword research functions. If no features are duplicated elsewhere, costs to stop using the tool would be another keyword tool or potentially less effective content.

Calculate the direct and indirect costs of working with each marketing partner. Evaluate whether outsourced services could realistically be done internally.

External partners might include:

  • Your branding agency or consultant
  • Your media buying agency
  • Freelance content creators, like writers or designers

Determine cost flexibility. For example, you might still need to work with an external designer, but could scale back their services to more essential brand work.

You might also benefit from the economies of scale of working with a single strategic partner that can help with strategy, content creation, and media buying under one umbrella.