budget

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December 28, 2015

2016 Marketing Budget

Planning your 2016 budget?  Marketing should be up to 20% of your budget if you want to get ahead of your competition.  This is an interesting article from Entrepreneur Magazine:

http://www.entrepreneur.com/article/243790

An excerpt from the article:

Marketing math:budget

The first question we ask a new client is, “Do you know what your budget is?”  Usually that’s when we see the client’s eyes get as big as saucers as they reply, “I have no idea! That’s what I thought you were here for.”

Related: With Your Marketing Plan in Place, It's Time to Talk Tactics

Over the past five years, we’ve developed what we call “marketing math” to help clients define exactly what they should be spending on marketing:

New companies: For companies that have been in business for one to five years, we suggest using 12 to 20 percent of your gross revenue or projected revenue on marketing. (Companies less than a year old, tend to need to ramp up before spending marketing dollars.)

Established companies: For those companies that have been in business more than five years and have some market share/brand equity, we suggest allocating between 6 and 12 percent of your gross revenue or projected revenue.

While this may seem like a lot, remember new and emerging brands are looking to capture new market share and develop brand recognition with an audience that has absolutely no idea who they are.  That’s why it’s so expensive.  Once the brand is established and a portion of the market is brand-conscious that number drops significantly.