Your Data-Driven Marketing Budget: Forecasting, Planning, and Securing Buy-In

Crafting a marketing budget that drives growth and efficiency requires strategic foresight, comprehensive data analysis, and—most importantly—flexibility. Learn how to build and refine your marketing budget for 2025 to optimize performance across new and existing channels.

There are a lot of considerations to take into account when putting together a marketing budget plan, and 2025 will be no exception.

In fact, with high interest rates still tightening capital and evolving digital marketing trends reshaping strategies, marketers are going to need to be more flexible and dynamic this year than they’ve been in years past.

A marketing budget is the guiding principle for everything you and your team can accomplish within the year. Every campaign, every hire, every tech or software purchase is reflected in this marketing budget, so building it requires precision and accuracy.

But, in the same breath, it requires flexibility. Adaptability. You have to ebb and flow as the tides will inevitably change throughout the year and you’re forced to address challenges you couldn’t have foreseen during the planning process.

To navigate these complexities, it’s critical to embrace regular reforecasting and align plans with business objectives now so you can confidently present your marketing budget plan to leadership and finance teams for buy-in before you hit the ground running. 

In our recent webinar, “Mastering Marketing Budgets: Strategies for Smarter Forecasting and Planning,” Investor Operating Partner and best-in-class growth marketer Katie Freiberg shared her best tips for preparing and presenting a strategic marketing budget. You can catch the on-demand replay of that webinar and her live demonstration of building performance matrices for more accurate forecasting models by clicking here.

This guide provides actionable steps to optimize your 2025 marketing budget, ensuring it’s both effective and defensible, and it starts with understanding that your budget will depend on what stage your business is at today.

Understand Your Business Stage and Context

Your marketing strategy and budget should reflect where your business stands and where it’s heading. Start by tailoring your approach to your company’s stage and aligning it with the strategies you’ll implement throughout your marketing funnel.

Seed stage

Seed-stage organizations are typically operating within tight budgets and limited historical data. Every dollar has to be justified, so you’ll want to focus on channels that have proven ROI and allocate additional resources for controlled, strategic experimentation. Prioritize efficiency and document any learnings to inform bigger swings you can take in the future.

Growth stage

At the growth stage, you have to balance efficiency with effectiveness. You’re not working on a limited budget anymore—you’re given big goals to hit, typically revenue-based ones, and you need to diversify your channel and platform investments in order to meet them. As such, you should allocate a decent portion of your budget to test and discover new opportunities.

Mature stage

Finally, once you’ve reached a mature growth stage, you need to maintain scale and refine efficiency by using sophisticated forecasting and cross-channel attribution to identify incremental improvements. Then, you should validate assumptions with your leadership and finance teams and continue to iterate based off of your findings.

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Speaking of findings, data is the foundation to any marketing budget. In order to have data, you need to build forecasting models. Now, these models don’t need to be insanely robust, but they should be enough to help you set and secure a marketing budget plan that ensures you’ll meet (and surpass) your growth goals.

Building the Three Types of Forecasting Models

Informed budgeting starts with forecasting, and it’s up to you, the budgeter, to choose the level of complexity based on your company’s data maturity. When you watch the on-demand webinar of Mastering Marketing Budgets, you’ll dive much deeper into each of these forecasting models and learn who should use which model and how to use them effectively.

Basic forecasting

A basic forecasting model uses historical averages and growth rates to estimate future performance. Tools like Excel can handle these models easily.

Intermediate forecasting

With a more intermediate forecasting approach, you’ll incorporate linear regression models and adjust for seasonality and trends, then use them to predict how spend impacts key metrics like clicks and conversions.

Advanced forecasting

Use media mix modeling (MMM) to evaluate cross-channel interactions, diminishing returns, and other external factors. These insights guide more precise allocation and help you better optimize spend across platforms.

‍Pro Tip: Ensure your data set is large enough to support your chosen forecasting method. Data sets that are too small or weak can make these models inaccurate, so adapt your approach to match the resources available to your team at any given time.💡

Once you have these forecasting models in place, you’re ready to begin building a marketing budget. One of the most important pre-requisites to any marketing budget plan is building specific performance matrices dedicated to different marketing channels.

How to Create Channel-Specific Performance Matrices

Every marketing channel has its own KPIs and spend. When you chart channel-specific metrics against budget on a performance matrix, you can visualize opportunities to scale or pull back where needed.

In order to make these performance matrices most effective, it’s important to take these steps:

1. Define metrics that actually matter: Identify KPIs that align with your goals and growth potential, like conversions, CAC, CLTV, and ROAS.
2. Analyze historical data: Use regression analysis to identify patterns and project outcomes at different spend levels so you can pinpoint the inflection points. Where do returns start to diminish? Where do they break even? This way, you can avoid overspending on underperforming channels.
3. Segment by audience or goals: Get granular about the campaign, audience, or objective you’re looking at. You’ll want to understand the strategies that are yielding the best results in specific contexts.
4. Build scenarios: One of the most powerful use cases for these channel-specific matrices is the simulation of different spending scenarios. If you want to project how increasing or reallocating spend could impact your goals, this could help you prepare for best—or worst—case outcomes.
   

These matrices provide a solid foundation for both top-down and bottom-up budgeting approaches, two frameworks that you can choose between to align your marketing budget plan with your broader business goals.

Align Budgeting Frameworks with Business Goals

Budgeting frameworks guide how you allocate resources and prioritize investments. Two approaches include a top-down approach and a bottom-up approach, each aptly named because of where you begin building your framework and strategy from.

• Top-Down Budgeting: Start with revenue or growth targets, then break them into monthly goals and segment by customer type or geography. Use historical data to inform allocations at the channel level and reserve additional spend for testing.
• Bottom-Up Budgeting: Begin with available resources or specific growth metrics, then build projections using your channel matrices and validate assumptions by iterating on spend and performance forecasts.

Pro Tip: You’ll want to revisit and refine these frameworks regularly to reflect changes in performance or business priorities.💡

Present Your Budget to Leadership and Finance Teams With Gusto

Securing buy-in from leadership or finance is a must for budget sign-off, but also for the vote of confidence you need that you accomplished a difficult and time-consuming task! Here are Katie’s top tips for getting that stamp of approval from the start and for continuing that success throughout 2025.

Clarify your assumptions 

A marketing budget is nothing more than a collection of financial assumptions about what will move the needle in the coming year. It’s important that you align with finance and leadership teams on what these assumptions are and how you came to them, whether by assessing prior trends, market research, historical data, or competitor analysis.

Additionally, you’ll want to clarify your assumptions around and get aligned on the key metrics presented in your budget. How did you land on that CPC? CAC? ROAS? Consider seasonality effects, growth rate expectations, and other factors that could have an impact on these numbers throughout the year.

Provide data-driven justifications

To reiterate what was said above, present channel performance data, projections, and models to substantiate your budget requests and, when possible, use visuals and clear explanations to illustrate your approach. These might include:

• Channel performance trends
• Capacity limitations
• Industry comparisons
• Test results validation

Maintain frequent communication

It’s on you to establish proactive communication with finance and leadership teams. Create shared reporting dashboards and regular KPI monitoring so they have it in advance without having to ask. When you can address misses ahead of time, reforecast in advance, or make proposals for adjustments to the budget before being asked, you’ll build trust and ensure all teams are aligned on priorities.

Shape Your 2025 Marketing Budget With Precision and Ease

By aligning your marketing budget with your business stage and growth goals, using data-driven forecasting to guide your decisions, and building strong, trust-driven partnerships, you’ll achieve better performance, scale more efficiently, and confidently meet your business objectives for 2025.

As a reminder, you can catch more in-depth budgeting strategy, formulas, and demonstrations of the formulas mentioned in this article in the replay of our recent webinar, “Mastering 2025 Marketing Budgets: Strategies for Smarter Forecasting and Planning.”

If you need support creating, executing on, or optimizing your 2025 marketing budget, contact Right Side Up today!