AMiable Solution #339: How Much (Budget) is Enough?
You’ve heard it before. Heck, you may have even said it. “You have to spend money to make money.”
The question, however, is how MUCH money do you have to spend to see the maximum desirable return?
While your answer may be different from your neighbors’, your competitors’, or members of other industries, it helps to have a guideline. It helps to know if your efforts are roughly in the ballpark of others’.
The CMO Survey, which “collects and disseminates the opinions of top marketers in order to predict the future of markets, track marketing excellence, and improve the value of marketing in firms and in society,” recently unveiled the results of its August 2019 survey, reporting that marketing budgets make up 12% of overall firm budgets, “matching an all-time high.”
That’s nearly 4% more than the average marketing budget for companies between 2011 and 2018, according to the CMO Survey’s 2019 special report, “TOP MARKETING TRENDS OF THE DECADE.”
What you budget and what you get out of your budget are two different stories, though. You need to consider what channels work for you, where your customers are, and how they prefer to receive product and sales information. For one company, it may mean more traditional print marketing. For another, it may mean a heaver focus on digital marketing.
Jake Gerli, a Content and Communications Strategist at Industrial Strength Marketing in Nashville, TN, says, “Before you can derive a financial figure to work with, you have to create a plan that supports your business goals and justifies your marketing budget.”
The best way to do that? Break your budget down into major marketing channels and put your money where your responses or needs are:
TV, radio, and print marketing
Direct mail and sales
Banner ads, billboards, display ads
Search engine marketing
Social media marketing
Don’t forget to study your history, too. Like most companies, you’ve probably had lean marketing years. How much was your budget in those years? What were the payoffs and pitfalls? Do you notice any trends or major lessons?
Only you can determine the “right” size of your marketing budget. Find it by listening to your customers and to your numbers.