Why does everyone get so shy when it comes to discussing money? Clients can be reluctant to share their marketing budget, usually preferring agencies to come up with a proposal (maybe including a dollar range) to review before talking specifics. Why do clients do this? Maybe small or mid-size companies are self-conscious of having too small of a marketing budget? Maybe clients are unsure because no one has really ever told them how much things should cost? Well let’s break down a few things here to help make everyone a little more comfortable.
First, how do you even determine what you should be spending on marketing? Of course there is no one-fits-all answer, costs will vary based on projected sales, gross income and overall goals – but you should have a rough number in mind. Entrepreneur shares a simple formula to get you started here. An even simpler way is to plan for 5% of your projected gross sales.
Let’s also keep in mind that marketing is the overall plan for promoting your business, product or service – advertising is the creative communications that is placed across several mediums (digital, social, print, out of home) to sell your product or service. In other words, your marketing budget can/should include all of these things:
- Advertising – This category should include the creation of an actual campaign (if one doesn’t already exist), cost of media (print, digital, social) and estimated updates and production throughout the year.
- Website – if you are creating a new website you will have researched and determined a project budget. If you already have a website you will need to set aside some dollars for ongoing web maintenance, here is what should be included.
- Public Relations (if applicable).
- Events & Sponsorships – special events, programs, organizations that you support throughout the year, (think journal ads and gala tickets).
- Events- any events that your organization hosts during the year.
- Collateral – any regularly updated items that you need produce annually (annual report, brochures, sell sheets).
- Stationary and Branding – Business cards, letterhead, envelopes, note pads, pens, signage, unifroms, etc.
Once you’ve determined how much you have to spend, where do you spend it? This is where a marketing consultant can step in and help develop a plan with your specific goals in mind. If you want to focus on winning new customers you may invest in software that helps you track leads or an inbound marketing campaign. Many small and mid-sized businesses with tight budgets are finding success advertising on social platforms, while larger companies are investing in experiential advertising to connect with consumers on a more personal level. If you need more help determining what you should be spending and where – just give us a call. We are happy to help you sort it out.