Determining marketing budgets

Ok its budgeting season and that means marketing teams are trying to decide how to determine how much to spend next year. Here are four methods that I have used in the past:

1️⃣ Percent of Revenue
This method calculates the budget as a percentage of the game's total revenue. It's straightforward, easy to scale, and aligns well with predictable revenue streams.
✔️ Easy to calculate and scales with revenue.
❌ Doesn’t always account for specific marketing strategies or goals, such as increasing Share of Voice (SOV).

2️⃣ Top-Down
In this approach, the budget is set by upper management, finance, or your boss, who provide a set amount for marketing.
✔️ Quick and straightforward, useful for predictable business planning.
❌ Limits the marketing team’s flexibility, reducing their ability to drive creative solutions.

3️⃣ Share of Voice (SOV)/Market
A conquest-driven method that uses industry benchmarks to set targets, helping to determine budget needs based on competitive analysis.
✔️ Ideal for early-stage products aiming to outpace competitors.
❌ Requires solid competitive data and may restrict growth by focusing on a narrow set of competitors.

4️⃣ Goal-Driven/Bottom-Up
The budget is built based on the specific goals set by the marketing team. This method gives the team ownership to drive their business according to strategic goals.
✔️ Empowers marketing teams, fostering creativity and alignment with business objectives.
❌ Demands precise goal-setting and alignment, which can be time-consuming.

Choosing the right method depends on your game's unique needs:

Percent of Revenue: Best for predictable revenue streams where marketing goals are less complex.
Top-Down: Useful for quick, top-level decision-making when flexibility isn’t a priority.
Share of Voice: Best for new products that need to stand out in a competitive market.
Goal-Driven: Ideal for experienced marketers managing GaaS & F2P titles, where strategic alignment is critical.
From my experience as a CMO, there’s no one-size-fits-all solution. The key is to tailor your approach to the game’s needs, goals, and the data you have. 📊