Defining your Marketing/Advertising budget

How much money from your budget will you spend on marketing and advertising? How much will you spend on direct-mail printing, internet marketing and other media?
Most companies follow the industry standards to come up with a formula or percentage to work with regarding their spending. It is always difficult to find a business model to base your marketing and advertising budget on because there are always influencing factors specific to your business.

You have to start somewhere! With a little research and taking certain elements into consideration, you can more readily define your advertising and marketing budget.
You should consider the following:

- Size of your business
- Type of services/products you offer
- Local/national market conditions
- Your company’s financial and expense analysis
- Your company’s sales analysis

Once you determine a percentage for your marketing/advertising budget, it is important to establish targets (or standards) so that progress can be monitored. Evaluating and measuring your Return On Investment (ROI) on your spending is crucial. Certainly, coming up with a good marketing plan can help you better manage your budget. The planning process should cover at least an annual calendar of practical actions (See our previous post about “annual marketing/advertising calendar”).

Tracking and measuring your “advertising expenses”  vs. “the sales conversion or generated leads” is the key factor to defining a formula that will work efficiently with time. With a trackable system, you will have a clear marketing/advertising budget definition among all the media you will be utilizing to reach your customers.

Choosing where to advertise and how much to spend is not a simple process, but with research you can find some reputable local advertising resources. For example, coupon advertising for restaurants is common because it works. Coupon advertising is also trackable and has a good ROI rate. Coupons are used by Americans, especially in this economy. An e-commerce business will certainly invest more in search marketing than in print advertising. Following a good strategy with a strong marketing plan, you will be able to identify what medium works best for you. It is just “good business” to decide where to spend your money–and ensure you get the most out of it