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How Much Should My Business be Spending on Marketing?
No matter what industry you’re in, marketing is essential if you want to boost brand awareness, increase your market share and drive your business forward. Whether you choose to advertise on TV, in print or online, spreading the word about your company, your products and your services is crucial.
One of the most important parts of any marketing campaign is deciding on a budget. Ideally, you want to spend as little as possible for as much as possible. Though spending big can bring you impressive returns, expensive campaigns can also cost you dearly if they’re not managed properly.
Managing Your Marketing Activity and Spend
Marketing is the lifeblood of your business.
Before you even spend anything on marketing however, ask yourself:
- What do I want to achieve?
- Who do I want to talk to?
- What do I want to say?
- What medium might be the best format for conveying my message?
- What is my budget?
What is the average marketing spend?
The average company spends around 10% of their revenue on marketing. Though 10% is the average amount spent, budgets can range from as little as 5% to as much as 15% of company revenue.
A few years ago around 25% of the average marketing budget was spent on digital marketing / advertising. Thanks to the popularity of smartphones, tablets and computers, businesses now spend around 50% of their marketing cash online.
Marketing as a percentage of revenue
One of the easiest ways to create a marketing budget is to look at your revenue and calculate a percentage based on that revenue. Most small and medium sized businesses spend around 7-8% of their income on marketing, though start-ups and micro companies often spend as little as 2-3%.
Some businesses calculate their marketing budget as a percentage of sales. The advantage of this is that budgets will automatically decline during slow periods.
It’s what you do with it that counts
Though it’s a good idea to create a marketing budget, you also need to ensure you have a comprehensive and well-researched marketing strategy if you want to ensure your money is well spent. Sometimes, it’s the most affordable online campaigns that can have the biggest impact. In these cases, a good understanding of the target audience and a clever idea can do a lot more than a big budget and a poorly developed plan.
Understanding, and being able to use, modern marketing techniques is also a huge advantage in today’s competitive market, with relatively low cost techniques like online marketing can bring big results.
Build your profile and publish information and images about your business on social media channels, Twitter, Facebook, Instagram, LinkedIn and not forgetting YouTube - a how to instructional video can acquire a lot of hits. If you are stuck on how to start in these areas, look at what your competitors are doing, who are they targetting and how.
Using the internet to advertise and market your business can quickly get your business in and amongst the large players, but beware although advertising on search engines can be quick and easy to set up, it can be costly if you haven't considered how to ensure a high conversion rate. So your on line presence needs to be able to convince and quickly funnel a new visitor to a sale or enquiry. You can find more information on how to better your online and marketing presence by reading through some of the articles on my Marketing Tips page.
Some other marketing help articles you may find useful -
Some Reasons Your Competition Ranks Higher Than You In Search Engines - Click here to read now
Five Things Small Businesses Can Learn from Billion-Dollar Success Stories - Click here to read now
Why Email Newsletters Are Uniquely Powerful Tools - Click here to read now