![How to plan and track the budget of your digital marketing agency [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-9_f3335fcf-2e86-4161-85fe-fc1e5e1d893b.png?v=1715856332&width=1100)
If you don’t plan and track your digital marketing budget properly, you're setting yourself up for failure.
When we developed our strategy pack for digital marketing agencies, we saw a lot of agency owners struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial revenue.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your agency's finances around and set you on the path to success!
Get the budget tracker tailored for marketing agencies
Most marketing agency owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for marketing agencies
Here is an example of a (very) detailed budget for a digital marketing agency, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for office space | $3,000 | $36,000 |
| Electricity | Power consumption for office equipment | $400 | $4,800 |
| Water | Water usage | $100 | $1,200 |
| Internet & Phone | High-speed internet and business phone | $200 | $2,400 |
| Waste Removal | Garbage and recycling services | $50 | $600 |
| Insurance | Property and liability insurance | $300 | $3,600 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Project Manager | 1 | $5,000 | $5,000 | $60,000 |
| SEO Specialist | 2 | $4,000 | $8,000 | $96,000 |
| Content Writer | 2 | $3,000 | $6,000 | $72,000 |
| Graphic Designer | 1 | $3,500 | $3,500 | $42,000 |
| Social Media Manager | 1 | $3,500 | $3,500 | $42,000 |
| Account Manager | 1 | $4,000 | $4,000 | $48,000 |
3. Software & Tools
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| SEO Tools | Subscriptions to SEO software (e.g., Ahrefs, SEMrush) | $300 | $3,600 |
| Content Management System | CMS software (e.g., WordPress, HubSpot) | $200 | $2,400 |
| Graphic Design Software | Adobe Creative Cloud subscription | $100 | $1,200 |
| Social Media Management Tools | Tools for scheduling and analytics (e.g., Hootsuite, Buffer) | $150 | $1,800 |
| Email Marketing Software | Subscription to email marketing platform (e.g., Mailchimp) | $100 | $1,200 |
| Project Management Tools | Software for project tracking (e.g., Asana, Trello) | $50 | $600 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, LinkedIn Ads | $500 | $6,000 |
| Content Marketing | Blog posts, articles, and other content creation | $400 | $4,800 |
| Social Media Advertising | Promoted posts and social media campaigns | $300 | $3,600 |
| Website Maintenance | Hosting, domain, updates | $100 | $1,200 |
| Email Marketing | Email campaigns and newsletters | $150 | $1,800 |
| Promotional Events | Webinars, online workshops, and other events | $200 | $2,400 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Office Supplies | Stationery, pens, printer ink, etc. | $100 | $1,200 |
| Equipment Maintenance | Regular maintenance of office equipment | $200 | $2,400 |
| Licenses & Permits | Software licenses, business permits, etc. | $100 | $1,200 |
| Contingency Fund | Emergency repairs and unexpected costs | $300 | $3,600 |
| Staff Training | Training programs and materials | $200 | $2,400 |
Some marketing agencies make 5x more profit than you!
We have studied the strategies of the best marketing agencies in the world. Replicate them now!
What are the biggest expenses for a digital marketing agency?
Be mindful of these pitfalls. Here are five major costs every digital marketing agency owner needs to consider, along with some tips on how to manage them effectively.
- Software and ToolsThese can take up a significant portion of your budget. You're dealing with subscriptions for analytics, SEO tools, social media management platforms, and more. Prices can vary based on features and user licenses. To keep these costs in check, focus on essential tools, negotiate better rates with vendors, and regularly review your subscriptions to eliminate unused services. It's easy to overspend by opting for premium features that don't add enough value.
- Your TeamYour team is your backbone, but paying for their salaries, benefits, and training can be costly. This expense is always high because you need skilled professionals to deliver quality services and keep operations running smoothly. You can optimize labor costs by scheduling efficiently, cross-training team members, and monitoring productivity. However, be careful not to underpay or overwork your staff, as this can lead to high turnover and poor performance.
- Office Space and UtilitiesPrime office locations come with high rent, but they can enhance your agency's image. Utilities like electricity, internet, and water are essential but can add up quickly. To optimize these costs, negotiate favorable lease terms and invest in energy-efficient office equipment and lighting. Overspending often happens when you choose a location that's too large or too luxurious for your needs.
- Client AcquisitionYou need to attract new clients, but marketing your agency can be expensive, whether it's through online ads, social media campaigns, or networking events. Optimize this expense by focusing on cost-effective methods like the ones we offer in our strategy pack. Overspending can occur if you invest in flashy campaigns without a clear return on investment.
- Technology and MaintenanceThis includes everything from computers and servers to software updates and IT support. These are expensive because reliable technology and regular maintenance are crucial for smooth operations and client satisfaction. Optimize by investing in durable, high-performance equipment and maintaining it regularly to avoid costly breakdowns. You can overspend by going for the latest high-tech gadgets you don't really need.
How to spend less with your digital marketing agency?
Here are practical tips to help you, as a digital marketing agency owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Software Subscriptions | Bundle services and negotiate annual contracts for better rates. |
| Labor Costs | Utilize project management tools to streamline workflows and reduce overtime. |
| Utilities | Implement energy-saving practices and use energy-efficient office equipment. |
| Marketing | Leverage content marketing and collaborate with industry influencers for organic reach. |
| Office Supplies | Go paperless and use digital tools for documentation and communication. |
| Equipment Maintenance | Schedule regular maintenance for office equipment to extend their lifespan. |
| Rent/Mortgage | Negotiate lease terms during renewal or consider a co-working space to reduce costs. |
| Insurance | Regularly review insurance policies to ensure they meet current needs and compare rates annually. |
| Client Meetings | Use video conferencing tools to reduce travel expenses. |
| Training | Offer online training sessions and utilize free resources for staff development. |
| Technology | Invest in multi-functional devices and use cloud-based software for collaboration. |
| Licensing and Permits | Stay up-to-date with industry regulations to avoid fines and costly renewals. |
| Transportation | Plan client visits efficiently to maximize time and reduce fuel costs. |
| Inventory Management | Use inventory management software to track office supplies and reduce waste. |
| Outsourcing | Outsource non-core activities to freelancers or specialized agencies to save on full-time salaries. |
| Networking Events | Attend virtual events and webinars to save on travel and accommodation costs. |
| Client Gifts | Opt for digital gifts or personalized e-cards to reduce costs. |
| Office Space | Consider remote work options to reduce the need for large office spaces. |
| Advertising | Utilize targeted online advertising to get the most out of your budget. |
| Professional Services | Negotiate rates with legal and accounting services or consider retainer agreements for better pricing. |
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Expenses that are just useless for a digital marketing agency
Yes, some expenses for your digital marketing agency are just unnecessary. They don't contribute to increasing revenue or improving client satisfaction.
| Agency Expense | Reason It's Useless |
|---|---|
| Luxurious Office Space | High-end office spaces don't necessarily attract more clients and can be a drain on the budget. |
| Premium Software Subscriptions | Unless you are utilizing all features, most mid-range software options are sufficient. |
| Excessive Service Offerings | Offering too many services can dilute your expertise and increase operational costs. |
| Top-Tier Hardware | High-end computers and gadgets are not always necessary and can be cost-prohibitive. |
| Traditional Advertising | Print ads often have a lower return on investment. Focus on digital channels instead. |
| Multiple Branding Materials | Having various branding materials increases costs without adding significant value to your brand. |
| Overstaffing | Having more employees than needed leads to higher labor costs without necessarily improving service quality. |
| Expensive Training Programs | Costly training programs often have free or cheaper alternatives that are just as effective. |
| Exclusive Tools | Using rare or specialized tools can inflate costs and complicate workflows. |
| High-End Office Furniture | Luxury furniture is not always appreciated by clients and can be a significant expense. |
| Custom Printed Stationery | Personalized stationery is a minor detail that most clients overlook, and it can be expensive. |
| Unnecessary Software Features | Paying for software with features you don’t use is a waste of resources. |
| Premium Coffee Brands | Most employees are content with standard coffee options, making expensive brands unnecessary. |
| Extra Office Space | Maintaining more office space than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Frequent Office Renovations | Constantly updating decor and layout can be costly and disrupt operations. |
| Expensive Office Decor | Elaborate decor is often ignored by clients and adds to the cost. |
| High-End Office Supplies | Luxury office supplies are prone to damage and expensive to replace, often going unnoticed by clients. |
| Excessive Team Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Website Redesigns | Frequently redesigning your website is costly and often unnecessary. |
| Unused Promotional Materials | Ordering more promotional items than needed leads to waste and unnecessary expense. Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Event Equipment | Specialized event equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your digital marketing agency!
Managing a budget for a digital marketing agency when funds are tight can feel like a nightmare. It's like being trapped in a cycle where any unexpected expense can throw your entire operation off balance.
This constant pressure makes it nearly impossible to invest in growth initiatives, leaving you always chasing after expenses. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, scraping together resources and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on growing your revenue. More income means more breathing room and more money to invest in your agency's future.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of digital marketing agencies just like yours. Get them now!
Make your digital marketing agency more profitable
We have studied the strategies of the best marketing agencies in the world. All their tactics are explained in our pack!
