3 mins read

How to Choose the Right Marketing Budget: A Comprehensive Guide

Eveline Smet

Founder & Growth Strategist


Choosing the right marketing budget is a critical decision that can make or break your company’s growth trajectory. It’s not just about throwing money at various marketing channels and hoping for the best. A well-defined budget is a strategic tool that aligns with your business goals, target audience, and market conditions. In this comprehensive guide, we’ll delve into the key factors you should consider when setting your marketing budget, from cost-per-click (CPC) metrics to competitor analysis.

Understanding Cost-Per-Click (CPC)

Why CPC Matters

CPC is a valuable metric that helps you understand the cost of acquiring a visitor through paid advertising platforms like Meta (formerly Facebook) and Instagram. The CPC varies based on the specificity of your target audience. For instance, targeting CFOs in London working at Fortune 500 companies will cost significantly more than targeting a broader demographic like 18 to 55-year-olds in the UK.

How to Use CPC for Budgeting

  • Identify Your Target Audience: Know who you want to reach. The more specific, the higher the CPC.
  • Analyze Historical Data: Look at past campaigns to understand the average CPC for your target audience.
  • Set a Preliminary Budget: Based on your CPC and desired reach, set an initial budget for your campaign.

Profitability and Customer Acquisition Cost (CAC)

The Importance of CAC

Understanding the profitability of acquiring a new customer is crucial. The Customer Acquisition Cost (CAC) should be measured against the Lifetime Value (LTV) of a customer to ensure that your marketing spend is justified.

Calculating CAC


How to Use CAC in Budgeting

  • Determine LTV: Calculate the average revenue you expect from a customer over their lifetime.
  • Set a CAC Target: Your CAC should be significantly lower than your LTV for a campaign to be considered profitable.
  • Allocate Budget Based on CAC: Use your target CAC to back into a budget that aligns with your profitability goals.

Competitor Analysis

Understanding what your competitors are doing is essential for setting a realistic budget.

Steps for Competitor Analysis

  • Identify Key Competitors: Know who you’re up against.
  • Analyze Their Spend: Use tools like SEMrush or Ahrefs to estimate their ad spend.
  • Evaluate Their Strategy: Look at their messaging, target audience, and channels.
  • Set Your Budget: Use this data to inform your own budgeting decisions.

Our Approach at The Growth Agency

We prioritize your business goals and profitability. Unlike agencies that take a markup or percentage on media spend, our recommendations are unbiased. We advise on additional campaigns or projects like SEO or website optimizations only when they align with your lead generation strategy.

Who Should Work With Us?

If you’re a company targeting the European or UK markets with a typical marketing budget of over €5,000 a month, our team can help you with:

  • Media Budgeting
  • Media Planning
  • Channel Strategy
  • Target Audience Analysis
  • Competitive Research
  • Ad and Copy Creation
  • Performance Campaign Setup
  • Website and Landing Page Optimization
  • Conversion Tracking
  • Real-time Lead Generation Dashboards


Choosing the right marketing budget is a complex but crucial task. By considering factors like CPC, CAC, and competitor analysis, you can set a budget that not only aligns with your business goals but also maximizes ROI. At The Growth Agency, we’re committed to helping you make data-driven decisions that fuel your growth strategy.

For a more in-depth consultation and tailored budgeting solutions, feel free to contact us.

Questions? Comments? Ideas! We’d love to hear from you! do not hesitate to drop us a note 😊

Eveline Smet

Founder & Growth Strategist

Eveline is our founder and the one who eats strategy for breakfast. She is in charge of budgets, KPI’s and growth plans. During her high school years, Eveline was wearing baggy pants and listening to 2PAC & Biggy. We have proof. Just ask. If you ever catch her looking off into the distance, it’s either because she wants to order sushi or she’s hungry thinking of ways to increase your profit. She’s also the biggest victim of marketing. But the biggest office sweetheart.

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