MARKETING
How To Set A Marketing Budget
Often , businesses
develop their corporate objectives , yet fail to plan for the budget to achieve them . Creating a marketing plan and budget is the best way to ensure that you are staying on track , meeting your goals , and managing your spending .
A marketing budget is a guide that helps ensure you are staying on target with estimated costs vs . the actual costs .
Everyone has heard the phrase “ You have to spend money to make money .” Many companies tend to underspend on marketing , thinking that by not spending they are saving . But by not spending on marketing , they are missing out on an enormous amount of business !!! What does a marketing budget include ? A marketing budget includes all of the costs that are involved in the advertising you do . This includes costs for brand development , designing and printing materials , developing and maintaining websites , search engine optimization , and digital marketing campaigns . It also includes costs for public relations and media , trade shows , advertisements in publications , direct mail , and more .
How much should a business spend on marketing in their budget ?
The amount of money a company should budget for marketing varies greatly by industry and business size . The US Small Business Administration and the Counselors to America ’ s Small Business define the variable for a proper marketing budget to be between 2 % and 10 % of sales . The average is between 4 % and 6 %.
Are there guidelines to help determine a marketing budget ? 1 . Consider further development or refinement of your current branding . Is your image up to par ? Do you have the professional logo , website , and marketing materials in place that accurately represent your company and speak to your audience ? Is there
consistency in the look and feel of your materials ? If not , what needs to be revamped ?
2 . Determine the costs involved in supporting the ongoing need of advertising , maintaining , and promoting your brand to your target audience . Keeping your marketing material and website up to date builds credibility and rankings with the search engines .
3 . Plan your Paid Advertising Budget as a separate line item within your marketing budget . A Marketing Budget encompasses all the services : consulting , graphic design , website development , video production , content writing , trade show materials , events , public relations , printing , etc . A Paid Advertising Budget is the actual cost of purchasing media ( Google ads , Facebook ads , magazine ads , digital ads , billboards , commercial spots , etc ). When you come to an agency with a marketing budget , it is recommended to set 1 / 3 of the budget aside for paid advertising and allocate the remaining 2 / 3 to marketing services – depending on your marketing strategy and desired ROI . Visit the Small Business Administration ( Sba . gov ) for more guidelines and information . They have charts that compare revenue with ideal marketing budget percentages . They also list variables that need to be considered .
Marketing is a fundamental ingredient for growth and profitability . Many companies fail simply because they do not allocate enough money for marketing and paid advertising . When done properly , marketing brings back solid returns .
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