Marketing Budgets

I’m often asked how much a company should budget for marketing. People expect to me have the answer, but I don’t.

Why? Because no two organizations are alike. What works for one wouldn’t (and shouldn’t) work for another. Just because your competitor spends 10 percent of sales each year on advertising doesn’t mean 1) its effective or 2) that you should.

I prefer zero-based budgeting for the following three reasons:

1. You have to have a marekting plan. You can’t justify how much you’ll need without a plan in place and tactics outlined.
   
   
2. You’ll trim the fat. Planning from zero each year makes you ruthless. You’ll take the time to evaluate and cut programs that didn’t work.
   
   
3. Better ROI. By having a plan and having to justify your activities, each dollar you spend is a “smart” marketing dollar that is an investment toward achieving specific, measurable objectives.