You want to grow. Great! So… where should the money go? More leads? A new audience, city, or service? Eventually, it’s important to ask: “Where should we invest our marketing dollars to make growth happen?”
Unfortunately, there isn’t a universal marketing budget allocation that works for every organization. If there were, we’d have a lovely pie chart to hand you and this article would be significantly shorter.
The better place to start is with three questions:
- Who are we trying to reach?
- What do we want them to do?
- What is keeping that from happening right now?
The answers help us determine whether we should increase investment in something that’s already working, test something new, fix a problem before spending more, or do some combination of all three.
Key Takeaways:
- Reaching more people and reaching a new audience require different strategies.
- More spend won’t fix targeting, messaging, conversion, or follow-up problems.
- Protect what works, test what you don’t know, and scale what proves itself.
Are You Trying to Reach More People or Different People?
(These sound like the same goal. They aren’t.)
→ More People: Scale What’s Already Working
Sometimes, your marketing is already reaching the right people and producing good results—you just need more of them. In that case, the question becomes: Can we scale what’s working without losing efficiency? That might mean:
- Increasing investment in a strong campaign.
- Expanding into new channels or geographic areas.
- Creating more content around proven topics.
- Improving conversion rates so more traffic takes action.
Historical data gives us a place to start. If we know where qualified customers are coming from, we can build on what’s already working instead of guessing.
That said, doubling the budget does not automatically double the results. Audiences can get saturated, competition changes, and additional spend can become less efficient. Scaling still needs to be measured.
→ Different People: Learn Before You Scale
If you’re trying to reach a new audience, the strategy usually needs to change too. Maybe you’re:
- Entering a new market.
- Reaching a younger audience.
- Moving into a new industry.
- Launching a service for a different type of customer.
Simply changing your ad targeting probably won’t be enough. A new audience may care about different problems, respond to different messaging, or spend time on different platforms. Before deciding where the budget goes, first understand who you’re trying to reach and what matters to them.
Before You Spend More, Find the Real Bottleneck
It’s tempting to assume that more growth simply means reaching more people. Sometimes that’s true, but other times, reach isn’t always the biggest opportunity. Often, customer journeys look something like this:
Reaching more people won’t fix a weak conversion path or poor follow-up. Before spending more, first figure out where people are getting stuck.
→ Are Not Enough People Finding You?
You might need additional advertising, stronger search visibility, more content, new media placements, or expansion into channels where your audience spends time.
→ Are People Finding You but Not Paying Attention?
The problem here might be your messaging or creative. You can purchase impressions all day long, but if the message doesn’t connect with the audience, buying more impressions just gives more people the opportunity to ignore you.
→ Are People Engaging but Not Taking Action?
Look at the next step. Is the offer valuable? Is the form too complicated? Does the website build enough trust? Is the call to action obvious? Sometimes your advertising is doing its job perfectly and the problem starts after the click.
→ Are Leads Coming In but Not Turning Into Customers?
Now we may need to look beyond marketing. Are the leads qualified? How quickly are they contacted? What’s the sales process? Are pricing, availability, or capacity getting in the way? Marketing can create opportunities, but the entire customer journey has to work together.
Budget is an amplifier. It can amplify a strong strategy, but it can also amplify an expensive leak. It’s more important to determine what’s actually keeping you from your goal before prescribing “more ads” as the answer.
Match the Marketing Investment to the Goal
Once we understand the audience and the problem, we can choose the right channels. Remember: the goal here isn’t to split your budget evenly. Different channels have different jobs, so your investment should reflect what you’re trying to accomplish.
→ Need to Capture Existing Demand?
Someone is already searching for what you offer. Search advertising and SEO can help you show up when people are already looking for what you offer. From there, strong website content and landing pages can help turn that interest into action. In this case, you’re not creating demand from scratch—you’re helping someone who already knows what they need decide if you’re the right fit.
→ Need to Introduce Yourself to a New Audience?
You may need channels that help create demand, not just capture it. Paid social, display ads, sponsorships, direct mail, and other awareness tactics can introduce your organization to people who weren’t already searching for you.
That also changes the message. Someone searching “commercial roofing contractor near me” is in a different mindset than someone who stumbles upon a roofing company in their LinkedIn feed. Same company, different moment.
→ Need to Bring People Back?
Not everybody converts the first time they hear about you. Actually, most people have the audacity to continue living their lives. Retargeting, email, social content, and other follow-up can keep the relationship moving after that first interaction.
Someone might:
See an ad → Visit your website → Leave → See a retargeting ad → Read a case study → Join your email list → Come back later → Schedule a call
No individual channel gets to wear the superhero cape because they worked together.
→ Need Long-Term Visibility?
This is where organic marketing becomes especially valuable. Search content, social communities, reviews, and other owned marketing assets can continue helping people discover and trust your organization over time. Paid marketing can create reach quickly, but organic marketing can build an increasingly valuable foundation.
Protect What Works, Test What You Don’t Know, Then Scale
Entering a new market does not mean taking every marketing dollar away from your existing audience and throwing it at something shiny. We prefer a slightly less dramatic approach.
→ Protect What Works
If a marketing channel is consistently producing meaningful results, be careful about starving it to fund an experiment. You still want the engine that’s working to keep running.
That doesn’t mean existing strategies are untouchable. If something stops performing, the budget should absolutely be reconsidered. However, new doesn’t automatically mean better. Keep enough investment behind the strategies that are supporting the business while you explore the next opportunity.
→ Test What You Don’t Know
A new audience, message, market, or channel contains assumptions that need to be tested. A good marketing test should answer a question:
- Will this audience respond to our offer?
- Which message or creative gets their attention?
- Which channel produces the best prospects?
- Does this market generate qualified leads?
The test also needs enough budget, time, and reach to teach us something. Splitting a modest test budget between multiple platforms may technically qualify as multichannel marketing, but it probably won’t qualify as useful research. Pick the opportunities with the strongest rationale and give them enough room to produce meaningful information.
→ Know What Success Looks Like Before You Start
A test becomes much easier to evaluate when everyone agrees on what we’re trying to learn. If we’re entering a new market, we might look at:
- Audience engagement.
- Qualified website traffic.
- Conversion rate and cost per lead.
- Lead quality and sales conversations.
- Customer acquisition and revenue.
Not every campaign reaches revenue immediately. An awareness campaign may be doing exactly what it is supposed to do long before somebody fills out a form. The metric just needs to match the goal.
→ Scale When the Evidence Gives You a Reason
Here’s the fun part. Let’s say the new audience is responding, the leads are qualified, and the results make sense for your business. Now we can ask: What happens if we invest more? That might mean:
- Increasing the budget.
- Using more of the best-performing creative.
- Testing similar audiences.
- Improving the landing page.
- Adding retargeting or supporting content.
A successful test should help you decide what to do next. Oh, and if the test doesn’t work? Don’t worry—it still taught you something. Maybe you learned that the audience is too expensive to reach or that the offer doesn’t connect. Or, maybe you discovered that one channel brings in poor-quality leads. Whatever it is, learning about the problem early can save you from spending much more later.
Protect → Test → Learn → Scale
How Do You Know Where to Move the Budget Next?
A marketing report should not simply announce that impressions increased 14% and then politely wish everyone a nice afternoon. It should help answer productive questions, such as:
- What happened?
- Why did it happen?
- Does it matter?
- What should we do next?
Different goals require different evidence. Depending on what your organization is trying to accomplish, you will want to track different results.
→ Awareness
If you’re trying to introduce your organization to a new audience, you might watch:
- Qualified reach and impressions.
- Video views and consumption.
- New website visitors.
- Engagement.
- Search interest.
- Traffic from the target market.
→ Lead Generation
When the goal is action, move further down the funnel:
- Form submissions.
- Calls.
- Registrations.
- Appointments.
- Conversion rate.
- Cost per lead.
→ Business Results
Eventually, we want to know what happened after those leads arrived:
- Were they qualified?
- Did they become customers?
- What did acquisition cost?
- What were those customers worth?
- Which audiences or campaigns produced the strongest opportunities?
Let the Results Tell You Where to Invest Next
Cheaper marketing is not automatically better marketing. More marketing is not automatically better marketing. Better marketing is better marketing.
Looking for patterns over time gives us a strategy and somewhere to start. Reporting tells us what reality thinks of it.
Frequently Asked Questions
How should we allocate our marketing budget?
Start with the goal, not a magic percentage. Figure out who you’re trying to reach, what’s getting in the way, and what’s already working, and then put your money where it has the best chance of solving the actual problem.
How do you reach a new target audience?
First, get to know them. A new audience may need different messaging, creative, offers, or channels. Make an educated guess, test it, see what happens, and let the results tell you what deserves more investment.
Should we spend more on paid or organic marketing?
Depends (Thrilling answer, we know). Paid is great for faster reach and testing, but organic builds long-term visibility and trust. The best mix usually gives each one a clear job instead of making them compete for attention.
How much of our marketing budget should go toward testing new audiences?
Enough to learn something useful. There’s no magic percentage, but a test that’s too small to produce meaningful data isn’t really saving money; it's just buying you an inconclusive answer.
How do we know when to increase our marketing spend?
When the results earn it. Look beyond clicks and impressions to conversions, lead quality, acquisition costs, customers, and revenue. If the strategy is working and your organization can handle more growth, then it may be time to scale.
Will spending more on marketing automatically generate more leads?
Nope. If reach is the problem, more spending may help; but if the real problem is targeting, messaging, conversion, follow-up, or the offer itself, more money just makes the problem more expensive.
What if we don’t know which marketing channel will work best?
That’s what testing is for. Start with your best hypothesis, pick a manageable number of channels, define what you want to learn, and measure what happens. You don’t need certainty to start, just a plan to get smarter.
Spend With a Reason
There is no perfect marketing budget allocation waiting to be uncovered in a spreadsheet. The right mix changes with your organization, audience, competition, goals, and available data.
If you want more of the people you’re already reaching, scale what’s working. If you want to reach a new audience, test new targeting and channels. If the real problem is somewhere else in the customer journey, fix that before spending more.
At TwoTone, we’d rather help you understand why your marketing dollars should go somewhere than simply give you another place to spend them. We protect what works, test what you don’t know, and measure what happens. We want to help you invest behind the opportunities that earn it.
If you’re trying to figure out where your next marketing dollar can make the biggest difference, let’s talk.
