As the holidays and the end of the year approach, a lot of companies are faced with either trying to spend the rest of 2018’s marketing budget (or risk losing it), or setting up a marketing budget for 2019. One piece of marketing wisdom says that companies who have a set a marketing budget are 47% more likely to be innovators in their field. Why? Because having a marketing budget in place forces you to stop every month, quarter or year and think about what you’re doing and why you’re doing it.
Setting Your Budget
If you’re struggling to determine your marketing budget, one common formula we suggest is that you spend between 2.5% to 10% of your gross revenue on marketing. Spending 2.5% is considered to be maintenance for marketing expenses, as opposed to a budget that would allow you to try new ideas and markets. Your budget should be divided pretty evenly between creative development and execution. So, if you plan on spending money on buying ads, you should plan on spending an equal amount on the creation of those ads.
Choosing Your Approach to Personnel
Once you set that marketing budget, you have to spend it. One of the biggest mistakes we see people make is who they hire with that budget. When you decide on a marketing firm, it’s important to remember that you’re not paying for just a glitzy proposal. Instead of going for the best-looking proposal, make sure that you research the company’s past work and their philosophy. Remember, you aren’t just buying products, you’re hiring a team to grow with your changing needs.
Choosing Your Approach to Strategy
Focusing too much on “how much will a flyer (or ad, or website) cost” misses the point of multi-touch marketing. Common marketing wisdom says that it takes up to seven touches for a 50% return rate. That means, if 10 people see your message 7 times, it’s likely that 5 of them will follow through on that message. If each of those 7 touches is done by a different company (meaning they will look and feel different), your rate of return will go down, since each touch will essentially be starting from scratch rather than reinforcing. You’ll wind up spending more money and time than if you’d just hired a great team that can handle most of your needs in one place with one style.
As marketing has changed, so has where companies need to spend their money. Companies now spend more on digital than they do on print, but print and digital are often related these days. For example, we have clients who send out a postcard directing people to a website. Marketing has also become niche-focused. In the past, you might spend more money on a general campaign than on a campaign that only targets one part of your audience. But today’s consumer market is much more niche-oriented, and consumers are used to being approached as individuals, or members of a small community, not as a big group.
Once you’ve set and started to spend your marketing budget, don’t forget to re-evaluate as your company grows and changes, and as you start to see results from your marketing team. Looking for more strategic direction? Marstudio can help.