Questions To Help You Prepare Your 2025 Marketing Budget

As December kicks off, most of you will likely be preparing annual marketing budgets for the year ahead, and larger companies will also be getting ready to present those budgets to executives & board members. 

It would be fair to say we know a thing or two about this. Yes, this is a tongue-in-cheek comment, and we know more than just a thing or two.

I’ve put together this quick post to cover what (most) executives actually care about when it comes to a company’s marketing budget. 

Why? Well, as operators, it’s easy for us to get laser-focused on the details. After all, in our day-to-day work, the details matter. 

Yet, diving into detail is the difference between planning and budgeting.

And I myself often also need to be reminded that for the people involved at this stage – it’s not a planning process, it’s a budgeting exercise. 

As such, when communicating with executives…

Remember, they don’t want: 

• Fake hyping up what you’re excited about for the year. 
• Operator-level slides that overload them with numbers they don’t want to nor have the time to understand. 
• Too much information. 

Instead, aim for: 

• A short slidedeck. 5-10 slides max: one slide on 2024 performance, a list of key objectives, and a focus on an overall breakdown of areas of responsibility and an overall budget. 
• Explanations of demand generation budget that shine light onto the considerations surrounding coverage and efficiency you’ve made.

Questions you can expect will be on their mind & should be on yours too:

1. What are the key marketing objectives for the year? Do they align with the overall business direction & strategy? Are they the right objectives?
2. Where did the budget come from? Was it trended off last year or built from a bottom-up model focused on efficient growth?
3. If it was trended, is the total spending growing slower than revenue?
   1. Could it be growing slower still? 
   2. Should/could it be growing faster, given our stage?
4. If it was built off a model, who built the model?
   1. Is everyone aligned on the model and are we confident in relying on this model? 
5. What does the marketing spend look like as a percentage of revenue?
   1. As a percentage of new ARR? 
   2. Are those percentages going down over time? 
   3. How do they compare to benchmarks? 
6. What is our CAC ratio and CAC payback period?
   1. How much is marketing contributing to each? 
   2. Is marketing’s relative contribution going down or up?
7. What is the sales/marketing expense ratio, and how has that trended over time?
   1. How does it compare to industry benchmarks? 
8. Where does the CMO want to spend the marketing money?
   1. How much is going to people vs. programs vs. infrastructure? 
   2. How has that mix changed over time? 
9. Is there any marketing money outside marketing?
   1. For example: do we run a user conference or intend to attend other conferences ourselves?
   2. If that is not in this budget, then where is it? 
10. Does marketing have a plan for how they are going to spend the proposed demand generation budget?
    1. Can I compare that plan to our historical performance to see if it’s realistic? 
11. How much money is going into fancy/exciting things like branding?
    1. Can we defend that proposed expense? 
    2. Does the CEO agree that this spending is a priority?
12. Can I trust the CMO to execute this plan?
    1. If we give them what they ask, how do they feel about delivering on the goals/objectives? 

Obviously, don’t anticipate these questions and directly answer all of them in your slides. That won’t work and couldn’t be covered in a reasonable amount of time. But these are questions you should be asking yourself and ultimately be ready for.

Here’s a rough way you might map these to your presentation: 

1. This Year’s Marketing Performance: Metrics on the left, OKRs on the right
2. Next Year’s Proposed OKRs
3. Next Year Proposed Area of Responsibility Chart
4. Top-Down Sales & Marketing Analysis: Customer Acquisition Cost, Cost Per Pipeline, sales and marketing expense ratio, history, relevant benchmarks
5. Budget Analysis – spend by people/programs/infrastructure, headcount, total cost per opportunity