Exactly How We Build and Spend Our Marketing Budget at Yonder

Pulling back the curtain with a transparent breakdown of the way we set and spend our entire marketing budget at Yonder.

Why isn’t there more budget transparency?

I saw a marketer post their full budget breakdown on LinkedIn the other day and immediately wondered why I don’t see that more often. It’s almost as if resource allocation is a closely guarded trade secret, or, more likely, no one knows what they’re doing and they’re worried they’re doing it wrong.

Either way, it struck me as something I wish I’d seen more of a few years ago when I was working this stuff out myself.

So I figured I’d show you how we do it at Yonder. Not because it’s perfect - there are almost certainly better ways to do this - but because I want to show you that budget planning doesn’t need to feel so daunting.

I was thinking about the best way to do this given how dynamic different products, markets and industries are. So I’m using some generic numbers and percentages rather than the actual ones we use at Yonder. It should make it a little easier to follow and implement yourself. Also, more importantly, I’m on sabbatical and I’ve been locked out of my work account so I can’t check them lol.

This will be most helpful for Series A+ startups with some budget but I think there are elements of this process that are usable for earlier and later stage organisations too. If you’re really early stage, I wouldn’t be spending too much time on budgeting in general.

Anyway, here’s how we set our budget and what we spend it on.

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We start with a revenue target and work backwards

For context, Yonder is a premium rewards card aimed at Gen Z and millennials. I was VP Marketing until I went on sabbatical, and like most startup marketing leads, my job was to drive growth - but more specifically, revenue growth.

We start with our ARR target for the year. Typically this is set by a combination of where we need to be as a business, our funding, and what the board think is ambitious.

For the sake of this post, let’s say our target is to add £10 million ARR (it’s not, but the maths is cleaner this way).

We then look at what the average customer is worth to us in their first year.

At Yonder, that number varies. We have four product types (full credit, full debit, free credit, free debit) with different pricing and usage patterns. Some customers pay £15/month, some nothing, and they all behave differently. But for the sake of planning, we use a blended average - let’s call it £150 revenue per customer.

We then use payback - a period of time measured in months in which your marketing spend is ‘paid back’ by the revenue your customer generates - as a way to measure our marketing efficiency. Payback is a better way to measure efficiency because it ties your revenue and your costs together. It stops you overspending on low value customers, and gives you flexibility to spend more on higher value customers.

Our working model is based on a 9-month payback. So we’re happy to spend up to £112.50 to acquire a customer - or 75% of their first-year revenue. It’s hard to say how that might change depending on your industry but in general this is a reasonable goal that what works for us.

So:

• £10 million / £150 = 66,666 customers we need to acquire this year.

• 66,666 customers × £112.50 CAC = £7.5 million. This is our marketing budget.

Or, in other words, the amount we reasonably need to spend to hit our goals.

If we don’t want to spend this amount of money (or we don’t have it) then we either need to reduce our ARR target or find ways to bring down our CAC. It’s important to get to this point in collaboration with your CEO and others, because it shows what is possible will happen - not just what they want to happen.

Ultimately this is a bunch of assumptions that we’ll spend the year working on proving, disproving and adjusting. But it’s enough to get us going.

CAC = Onboarding costs + marketing spend

Our Customer Acquisition Costs (CAC) of £112.50 include all the costs involved in acquiring a customer, not just the media spend or marketing stuff.

For us, about 30% of our CAC goes to onboarding costs. Stuff like:

• Free trials (1–3 months depending on the offer)

• Welcome points and rewards (e.g. 10,000 when you join)

• Referral bonuses for existing members

• Credit checks

• ID verification

• Card production and delivery

That’s £33.75 per customer, or around £2.25 million total - money we have to spend before we even show up on someone’s Instagram feed.

An accountant will tell you these aren’t marketing costs because they sit in a different line item. The accountant is technically correct and practically useless. These are marketing decisions. You decide what the welcome offer is. You decide whether to send a metal card or a plastic one. And if you’re not counting them in your CAC, you’re kidding yourself. And your accountant.

So let’s make this the mental model:

• CAC = onboarding costs + marketing spend

• Marketing spend = Growth Now + Growth Later

Growth Now vs Growth Later

With onboarding costs taken out, we’ve got £5.25 million left in actual marketing spend.

We split that in half:

• Growth Now (performance) — stuff that drives customers in the next 30 days.

• Growth Later (brand) — stuff that drives demand in the next 6–12 months.

We’ve been too heavy on performance in the past. We’ve also gone too heavy on brand. But after years of overspending on one and neglecting the other, we’ve landed on a 50/50 split.

There are some ways to calculate this online for your product and industry, but not a lot of data on what this looks like for earlier-stage businesses.

Before we move on. Make sure to set your Growth Later budget first. Ring-fence it. Otherwise, performance will eat it alive the moment CPAs go up or you miss a monthly target.

Set the brand budget first, or you won’t have one.

Growth Now: Spend to capture existing demand

We’ve got £2.625 million to spend on performance.

Here’s the rough split:

• Meta (~40%, ~£87k/month): Our biggest channel. Great demographic fit, decent targeting, creative that converts. It’s more expensive than it used to be, but still where we see the most consistent volume.

• Comparison sites (~35%, ~£75k/month): Think MoneySuperMarket, Compare the Market. These are for folks who are in-market and looking. High intent but often high churn, annoyingly. We show up strategically, but we don’t optimise for volume - quality matters more.

• Affiliates (~15%, ~£30k/month): Cashback sites and deal forums. Lower volume, but good for online visibility and SEO.

• Experimental (~10%): Ongoing tests like new channels, new creative formats, whatever side-of-desk idea I’m running this month.

Meta hits people who aren’t looking yet. Comparison sites catch those who already are. Affiliates grab those who aren’t sure yet. None of them win alone. All of them work together.

Growth Later: Spend to generate future demand

The other £2.625 million goes into brand building.

This includes:

• Always-on content: Instagram, creators, influencer partnerships. Not performance content - just stuff that makes us worth noticing and remembering. This is inclusive of two full time headcount (content lead and videographer) plus all of our editing and creative costs.

• Seasonal podcast and other new media bursts: We’ll sponsor a few shows for 4–6 weeks, then go quiet. Keeps us fresh, avoids diminishing returns.

• 1–2 big consumer campaigns per year: Big brand swings. We’ve done campaigns like Pint Protection and WTF is APR?! that people actually talk about. They don’t convert today, but they pay off in every other channel later. These have long term strategic value for us and ultimately are measured on how they drive more incremental word of mouth from our existing base.

• Above the line: media buying for big above-the-line campaigns is often where most brands spend their brand budgets because you’re buying reach which ultimately gives you market share. This is expensive because of the scale. Think TV, billboards, radio etc.

Most people aren’t looking for a credit card right now. But when they are, we want to be top of mind. Or at least somewhere between Amex and “I’ll Google it.”

How we spend through the year

January is by far our biggest month - about 2x our monthly average.

So we ramp brand spend in December to prime demand. Then go full-funnel in January: performance, referral, content, the whole lot.

We stay elevated through February and March, then taper off in April and May when performance slows. Summer gets a bump again - holidays, events, higher spend - and autumn is our quieter testing window before ramping up for the next January.

We try to set our budget to follow human behaviour. Not quarters.

Who actually makes these decisions?

It’s not just me in a Google Sheet. It’s:

• Me, in a Google Sheet

• Our finance manager (asks smart, annoying questions)

• Our VP of Finance (asks the same ones, but louder)

• The CEO (wants more with less, always)

Marketing budgets touch everything - support, compliance, onboarding. Planning how much to spend isn’t just about efficiency. It’s about whether the company can actually absorb the growth you’re targeting. This is a collaborative process.

Final note

Anyway, I hope this is useful and gives you a little head start on building your own marketing budget.

Almost everything above is still unproven and driven by our assumptions as we learn more. We don’t know if 50/50 is optimal split for our Growth Now and Growth Later spend. Or if Meta deserves 40% or 60%. Or if January should be 2.2x average or 1.8x.

What we do know is that this approach feels like a reasonable way to use our limited resources to hit some pretty unreasonable targets.

It’s not perfect. But it’s working. And I promise you that’s good enough.

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While I’ve got you…

My name is Tom. I’ve launched and grown products at some of the UK’s most loved consumer brands and I’m part of the founding team and VP Marketing at Yonder, a modern day rewards card. Since starting at Yonder, I’ve written about all my marketing learnings along the way.

If you're a senior marketer at a startup, this Substack is for you. I write about what actually works in startup marketing (and what definitely doesn't) for marketers on the verge of breakdown.

You can find me on LinkedIn congratulating my mates on their new jobs, trolling Forbes articles about billionaires, and occasionally sharing something useful when absolutely forced to. Say hello.

I do some 1:1 consulting from time to time where my speciality is helping you understand why your brilliant product isn't selling itself. Contact me on LinkedIn if you're into that sort of thing.

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