As a marketing agency, we’re well-aware of the phrase, “we don’t have a budget for that.” But let’s be honest, usually there’s money in the pot, it’s often unaccounted for, spent willy-nilly and largely untraceable but it’s there.
And that’s our point. There is a budget for marketing, it’s just not being identified or spent in the right way.
Don’t Spend it on a Whim!
I heard about a national business last week that was looking at sponsoring a huge sporting event in the UK. Why? Because the director loves the sport and thinks it’s a great idea.
There’s been no consideration given to return on investment, whether it’s a good fit for the business, if have they enough personnel to make the most of the opportunities it will bring etc. The biggest question though is, where will the money for this sponsorship come from? Often, the money can be ‘found’ when it’s a passion project.
Marketing budgets should be considered, tangible and accountable.
But how do you go about setting one in the first place?
Setting a Marketing Budget
Often traditional marketing budgets were set at the start of the year with 75-80% attributed and 15-20% reactionary.
And what percentage of turnover should the marketing budget be? I still use a minimum of 2% of turnover as a rule of thumb, moving nearer to 10% in a marketing led organisation. Most I would say fall somewhere in between 2 and 5%.
Planning your Spend
So, you have a figure, how are you going to spend it?
In honesty though, this is where I believe an experienced marketing manager can earn their keep; helping you to maximise your budget based on strategy and objectives.
What to Avoid!
Don’t plan or spend your budget because…
I’m sure you are familiar with all these and many more.
Maximise your Budget
To make the most of whatever budget you have – attribute it, plan it, have a contingency, make rational decisions based on business objectives, monitor it and above all, review it before planning the next one…what worked, what didn’t and what proved the best return on investment?