How to build an efficient communication budget
Communication experts shouldn’t be expected to be finance experts as well. But managing a budget is part and parcel of a communication gig, even if you don’t have any accounting or finance experience.
This article will help you understand, build, and maintain an efficient communication budget.
What is a communication budget?
Most often part of the marketing budget, the communication budget represents the sum of the tools, programs, and people involved in the growth of the business through communications.
In business, “communication” refers to all activities that allow the company to be more visible and share its message, internally and externally.
But marketing communications is something more precise – it’s how the company talks about their brand and products. In other words, it’s the media and messaging from the company to the market. This could include brand awareness, PR, advertising, external events, and more.
Want to know more about our PR strategy? Here are the 6 PR best practices we’ve learned after 6 fundraising announcements.
Why do you need a communication budget?
It may seem counter-intuitive, but communication isn’t free. Emails, messages, newsletters, social media, traditional media…communication via these platforms and programs requires money.
But not all budget items are created equal! Depending on your communication plan and your goals, you need to put more money towards the items that contribute most to your growth or to achieving your objectives.
Your communication plan should already include your priorities and preferred channels, so it will be easy to create your budget with your comms plan as a guide. A communication plan details how and when you communicate with key stakeholders. It includes who is involved in which projects, the frequency of communication, and clear timelines.
A communication budget will be a key point of reference throughout the year (or quarter). If your company is experiencing hardship, you’ll need full budget visibility in order to figure out where you can be lean and where you can splurge.
Create your communication budget in 5 steps
1. Outline your objectives or goals for the year
Would you like to increase your brand awareness? Take share of voice from competitors? Build the CEO’s personal brand? Whatever your goals are, you need to define them. They’ll dictate how you prioritize spend.
For example, spending thousands on brand monitoring tools before anyone’s heard of the brand would be a waste of precious funds.
Also, you’ll need metrics to measure these goals. It might be likes, clicks, follower count, conversions, or employee engagement score, just to name a few. Be sure to have a plan in place for how you’ll measure success and track them throughout the quarter.
2. Decide which goals have a cost connected to them
Some communication goals (more speaking engagements for the CEO, increased participation at trade shows) will be very costly.
Others (more posts on social media, thought leadership articles written by employees), won’t be quite so spendy.
Take a look at each goal and estimate how much you’ll need to spend for each. Be realistic, and put in the time to benchmark. Account for inflation and other market factors. What you spent last year might be a helpful guide to this year’s budget, but it won’t be identical. You will probably have to do more with less.
3. Use a budget template to build your budget
If the thought of starting a new budget from scratch is overwhelming (or you just don’t have the time), we’ve got a couple great (and free) templates here:
4. Add your items to the budget
Steps three and four are definitely the easiest on this list! Getting your hands on a budget template and filling in your budget items will take no time at all. Below we’ll talk in detail about what to include in your budget.
With the right spend management tool, this part should be a breeze. The “real time” here is key; your budget is useless if it’s not updated regularly.
You won’t have an accurate number of how much you can spend if purchases take days to appear in the budget. And if you overspend -- it's too late. Make sure to use a reliable budget tracker to keep an eye on your expenses.
What to include in a communication budget
Every communication team’s budget will look different. But here are a few categories to include in your budget:
Social media costs will typically fall under this category. Whether you pay for ads or just pay for a premium account on a social media platform, you need to include it in your budget. The same goes for social media management platforms like Hootsuite.
Make sure that your budget includes internal communication system(s), external communication platforms, email software, newsletter platforms, blogging platforms, and your company website CMS.
(P.S. Accidentally paying for multiple versions of the same software or platform is a common budget killer. A spend management tool will help you gain 100% visibility over all your spend, so you see exactly where your money goes.)
Events: internal and external
Events can take up a considerable amount of your budget. Be sure to add both internal and external events to your budget if they fall under the communication team’s domain.
Check your company’s travel expense policy to see how employees should expense costs associated with traveling to and from events.
Buying stands at trade shows and conferences is usually a huge expense. Be sure to measure the return on investment carefully; if it doesn’t bring in new clients or more website traffic, then reconsider if this is the best way to spend company money.
Digital tools: subscriptions, software
Planning and organization programs like Asana or Notion would be included in this category. So would news outlet subscriptions or one-off payments.
And don’t forget visual design tools, like Canva or Photoshop.
If you use it and pay for it, it needs to be included in your communication budget.
Team salaries will obviously be a significant portion of your costs. If your comms team works with agencies, influencers, or freelancers, you’ll need to place them in your budget, too.
Manage your communication budget with Spendesk
Are you tired of managing your budget by hand, on a dusty Excel spreadsheet that nobody has bothered to update for months?
For all the operational people, those who build communication strategies and want to take full advantage of modern budget management tools, Spendesk is for you.
You’ll love our free tool dedicated to budget management. Follow your communication budget to the penny (and without headaches):