Of all the questions we get as branding and marketing consultants, how much to spend on marketing is pretty close to the top of our clients’ minds. And that makes sense—we’re all running businesses and organizations. Budgeting, costs, and expenses are all big parts of attaining success.
And this is an even bigger question for start-ups and young businesses—many of whom have little or no experience with marketing and the costs involved.
The great thing about answering this question is that there’s tons of help out there to get your started. And there’s also many ways to go about creating a marketing budget for your business.
Here’s a few that we’ve found helpful:
LegalZoom.com on Marketing Budgeting
LegalZoom.com has data on thousands upon thousands of businesses through their online legal tools. From all this data they’ve put together a fantastic article on how the see businesses putting together their marketing budgets.
This is the list of items they’re considering in a marketing budget:
- print and broadcast advertising
- design and printing costs for all print materials, such as newsletters, brochures and press releases, direct mail costs
- Web site development
- public relations
- trade shows
- any other special events needed
(We’d also recommend including consulting fees for branding and marketing strategy—unless you have the in-house expertise to handle this yourself—in which case you’ll want to include your marketing team’s salaries as part of your budget as well.)
LegalZoom covers 4 methods of creating this marketing budget:
1. Percentage-of-sales – most popular and fairly easy
2. The Flat Dollar Approach – effective for one-time projects but not for long-term marketing plans
3. Matching Competitors – really hard to estimate without inside knowledge
4. Marketing Plan Objectives – most effective approach. Starts with goals rather than jumping directly to deliverables. This is our recommendation for our clients as it gets you into a strategic mindset from the get-go rather than getting bogged down into very specific tactics which will can and will change over time.
Inc.com has probably thousands of articles on marketing and branding but this one from September 2010 still rings true.
It’s got some great questions to help you think about marketing budgeting like:
- How established is your business? (If no one has heard of your business yet, you should probably spend more.)
- What industry are you in? (You should have a sense of how much your competitors are spending.)
- How much can you really afford? (Don’t spend yourself into a hole, especially today, when there are so many cheap and highly effective Web options to help you promote your business.)
Interview with CopyBlogger CFO, Sean Jackson
Sean Jackson is on smart cat. And in this interview he identifies some core misconceptions business owners and leaders can have about the “return on investment” of marketing.
Our big takeaway? Good marketing is about increasing the efficiencies of communication—both externally and internally. This results in greater profit (not investment returns)!
We often think of marketing as an “investment”—something tangible, like a piece of software or equipment or building. But marketing isn’t an investment—you can sell it or list it on your balance sheet as an asset.
Marketing done right is bettering your communication which in turn increases efficiencies. This saves time (which equals money), reduces friction with customers, and ultimately betters the perception of your brand.
All this means your products and services increase in value, leading to greater profit!
This is definitely a good interview to read.
AdAge Looks at a Non-Profit with a ”Zero Dollar Marketing Budget”
Don’t be fooled by the title of this one: there’s no such thing as a “zero dollar marketing budget”.
But there are certainly organizations who have to get creative with tight budgets.
AdAge takes a look at DoSomething, a non-profit with a CMO who has to deal with a marketing budget without all the bells and whistles of larger, more established organizations.
What we love about this article is that DoSomething recognizes that you can’t NOT market. When budgets are tight, it’s time to get smart and put money towards marketing in strategic ways to reach your goals. DoSomething didn’t skimp on the marketing budget in one huge area: they hired a smart CMO to help build and manage that marketing strategy.
We’ve talked with many businesses who balk at the idea of a full-time marketing position on their team: “How could we ever afford someone who doesn’t generate direct revenue from their work?”
But when you look at the costs of NOT having a marketing strategy leader, things become clearer. Lost time and mis-spent money on poorly thought-out campaigns, fractured brand communications, and a generally unfocused strategy pile up when there’s no one to keep marketing efforts heading in the same direction.
For some companies the answer is a full-time position. For smaller companies, bringing in a consultancy like ours to help fill in the marketing strategy gaps with the CEO/owner/principal is a smarter route to go. Either way, Resound Creative is here to help.
We’d love to hear how your company creates it’s marketing budgets! Use the comment section below, hit us up on Facebook or Twitter, or shoot us an email!
*[Photo credit: www.LendingMemo.com]
