What is the most important place to start when building a marketing budget?

Analyzing the performance of last year's marketing budget: reviewing which channels met their goals and which didn't. These insights help you make the right adjustments to the new year's budget.

How do you optimize a marketing budget throughout the year?

Monthly tracking and periodic analysis of performance against goals — cutting spend where needed and investing more in the channels delivering strong results.

Financial Planning for Growth

Building Your Digital Marketing Budget for 2026

Q: What is the primary goal when building a digital marketing budget?

To define clear business goals and build the budget so it supports achieving them in the best possible way. Resources should be allocated to each of the digital channels that drive results.

A digital budget has to be dynamic and flexible — just like the field itself. Still, it's worth building an annual budget to get a sense of your financial framework and to prepare in advance for the fact that you'll be adjusting it as the year goes on.

Budget for a Large Business

→ Go to the planning tool /large.php

Budget for a Small Business

→ Go to the planning tool /small.php

What Goes Into the Budget?

We recommend reading first — Building a Digital Marketing Plan

Media Costs

The bulk of a digital budget should go toward buying media (pay-per-click, pay-per-conversion, pay-per-impression, and so on). In most cases, the lion's share will go to the two media giants: Google and Facebook. Google Ads covers advertising across Google Search, partner sites, Shopping, the Display Network (you can advertise on most Israeli websites through Google advertising), YouTube, Discover, remarketing, apps and more. The second media giant is, of course, Facebook — which includes Instagram, with over two billion users, and which knows us better than we know ourselves. Beyond these two, which usually absorb most of the budget, there are smaller channels to match to your industry, including LinkedIn, Taboola, Outbrain, TikTok, Twitter, Pinterest and more.

The associated costs in these channels, beyond planning the campaign, are producing the materials: content, copy, creative, graphics, banners and videos — on top of which you should add roughly 10%-20% for ongoing management and constant optimization of the various media.

Ongoing Maintenance & Development

A website and an app are usually dynamic media that need to be maintained, adapted and improved all the time.

Costs you can't avoid: domain renewal, website hosting.
Costs you can hardly avoid: ongoing website maintenance, software updates, security updates.
Additional costs: developing and continuously improving the website/app. This expense can be significant depending on what you want or need to do on the site, after consulting an expert. Among other things, it can include re-specifying the website or landing pages, specifying new modules within the site, design (graphics), programming and developing the modules, and QA.

SEO (Organic)

Includes three main budget components:

Payment to the SEO agency (management, research, consulting, optimization, code fixes, measurement)
Writing content for distribution.
Buying media to distribute the content in order to generate links to the site.

Social Media

Ongoing management of (unpaid) channels such as Facebook, Instagram, Twitter, LinkedIn, TikTok, a private blog and so on. The budget includes two main components: managing the channels and creating the content (articles, news, updates, banners, images, videos).

Direct Mail & SMS

Ongoing management of the direct messaging system (automated and proactive), including: the cost of the systems (email, SMS), management cost, and creating the content for the messaging, including copy and graphics.

Digital Marketing Automation

CRM and lead systems. Needs and systems specification, system costs, system implementation, ongoing optimization.

Conferences & Events

Creating the content for the event, organization and promotion costs.

Miscellaneous

Strategic consulting, building the marketing plan and preparing an action plan
Measuring and analyzing results
Marketing process automation

Q&A on Building a Digital Marketing Budget

Question 1: What is the primary goal when building a digital marketing budget?

The overarching goal is to define clear business objectives and build the budget so it best supports achieving them. Make sure resources are allocated to each of the digital channels that drive results.

Question 2: What is the most important place to start when building the marketing budget?

Start by analyzing the performance of your previous marketing budget: examine which channels met their goals and which needed improvement or change. These insights will guide the right adjustments for the new year's budget.

Question 3: How do you decide how much budget to allocate to each marketing channel?

Based on focused data for each channel, invest more in the ones that delivered a high return on investment (ROI) and cut back on those with a low return. Factor in expected shifts such as rising demand for video content and the evolution of AI automation.

Question 4: Which budget components should be included in the annual plan?

The budget should include paid advertising (PPC), organic SEO, social media, content and email marketing, website development and maintenance, video marketing, and analytics and automation tools.

Question 5: How important is it to set aside budget for experimentation?

It's a good idea to allocate around 10%-15% to experimentation, which lets you test new channels or new technologies and stay ready to adapt during the year.

Question 6: How do you cope with rising costs in paid campaigns?

Invest in focused keywords, remarketing, automation and artificial intelligence to improve performance and prevent unnecessary wasted spend.

Question 7: What role do data and analytics play in building a budget?

Use tools like Google Analytics and Facebook Insights for precise analysis of traffic, conversions and campaign performance, so you understand where to invest and which strategies to improve.

Question 8: How do you prepare for changes in privacy policy?

Allocate budget to collecting first-party data (such as data gathered directly from the customer) and to tools suited to privacy restrictions, in order to reduce reliance on third-party data.

Question 9: What trends are expected in 2026 that you should account for?

Trends include AI-powered marketing, the rise of video content marketing, adapting to social commerce channels, and using up-to-date technologies for automation and improved personalization.

Question 10: How do you optimize the budget throughout the year?

Monthly tracking and periodic analysis of performance against goals lets you make adjustments, cut spend where needed and invest in the channels delivering better results.

Question 11: How do you measure return on investment (ROI) for the marketing budget?

Defining measurable KPIs such as sales growth, traffic and on-site conversions is critical for tracking performance. Using attribution models like multi-touch gives you a deeper view of campaign performance.

Question 12: What's the recommended marketing budget for small vs. large businesses?

Small businesses usually allocate 7-10% of their revenue to marketing, while large businesses allocate 5%-15%. But the size of the budget depends on the goals and industry of each business.

Question 13: How do you gauge the success of social media advertising?

Analyzing engagement frequency, site traffic and the direct sales generated by each channel lets you understand how successful your investment in social media advertising has been.

Question 14: What role does content marketing play in the digital budget?

Content marketing helps attract future customers through valuable content. Invest in video content, blogs and tutorials to draw an audience and strengthen its engagement.

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