Downsize a marketing budget

Business Benefits

Hit growth and revenue goals.


Review and get a clear understanding of your core marketing KPIs.

This helps you 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.

If needed, rank your marketing KPIs in order of importance. That allows for judgment calls between tactics or tool that each work towards different benchmarks.

List your paid and organic marketing tactics in a spreadsheet.

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. Reporting tools like Google Analytics help to review performance of each tactic.

Eliminate any tactics that are clearly underperforming and 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, leave it in place for now.
  • If paid Twitter doesn’t satisfy any of your KPIs, including lead conversion rates and brand engagement, eliminate it.

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.

Pick a low-spend, high-impact tactic from your spreadsheet. Increase its budget slightly while decreasing the spend on high-spend 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 more than two months before you need to make more cuts, divide your marketing period into three and test paid media tactics against each other.

To determine which high-spend tactics are more effective, test them against each other:

  1. Identity two paid tactics you want to evaluate.
  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.

Now, 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. Evaluate each, looking for feature overlap and unnecessary costs.

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. Ask:

  • Is this platform crucial to our marketing success?
  • Are any of the features in this tool duplicated by another tool we already use?
  • What costs (tangible and intangible) would we incur should we stop using this tool?

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.

Evaluate your current external partnerships, like branding consultants, media buying agents, and freelance content creators.

  1. Identify the total direct and indirect costs of working with each partner.
  2. Evaluate whether the outsourced services could realistically be done internally.
  3. 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.