2016 has come to a close, and the fresh beginnings of 2017 are on the horizon. The new year always brings that feeling of change and evolution, so why not let your business embrace it? If you’ve been allocating your marketing budget to the same resources for years, it’s probably time to revisit the budget and see what’s trending in marketing and advertising opportunities. We’re not saying to throw out your entire game plan. What we are recommending is to analyze where to best allocate your funds to maximize your returns and your investment.
How much to spend?
Marketing budgets vary widely from company to company. There is no blanket number or percentage that every business should adhere to, but there are a few guidelines to help inform your decision. The bare minimum that a business should invest in marketing is somewhere around 5% of the revenue. This will allow for a scaled down yet targeted approach to your marketing needs. A healthier budget would be somewhere between 9% to 15% of your revenue.
According to the American Marketing Association and a Duke University 2014 survey, businesses are continuing to believe in the power of their marketing dollars. While 46% of all companies surveyed allocated less than 9% of their profits to marketing, 30% of companies spent more than 13%. What’s even more noteworthy is the finding that those companies who outperformed their competitors invested at least 13.6% of their overall revenue towards marketing efforts.
Where should I spent my budget?
Again, there’s no right or wrong answer to this question. If you’re more of a traditionalist, then you’ll likely lean heavier towards television, print, and radio methods. If you’re more millennial-minded, then the digital world is your oyster. At Concept Marketing, we recommend allocating your resources somewhere in the middle. Every platform and method has a strategic and effective use, even in 2017.
Again, there’s no right or wrong answer to this question. If you’re more of a traditionalist, then you’ll likely lean heavier towards television, print, and radio methods. If you’re more millennial-minded, then the digital world is your oyster. At Concept Marketing, we recommend allocating your resources somewhere in the middle. Every platform and method has a strategic and effective use, which support each other, even in 2017.
Let’s start with the digital side. This is where we recommend you spend the largest chunk of your advertising dollars, because this is where your customers are most likely to be. You should spend around 40% to 50% of your budget on building your website, optimizing it, updating it regularly, and keeping your branding relevant and consistent. Your website is your digital storefront, and keeping up with the latest in SEO best practices and most current layouts and functionality is what instills the most confidence in your online viewers.
Another digital component that can’t be ignored is your online marketing budget. This includes search engine marketing, display advertising, and social media marketing. Depending on your target demographic, you can divvy out funds as needed to each of these resources. We recommend anywhere from 20% to 30% of your marketing budget be allocated towards online advertising.
The remaining 30% to 40% of your budget has a little more wiggle room, and should be custom tailored to your exact needs.
If you’re interested in traditional marketing efforts, they’re still very much alive and well. Television, radio, print, and outdoor advertising continue to lead the way in ad dollars spent, because they work. These methods reach an unprecedented amount of viewers with efficiency and increased reach. We recommend spending between 20% to 30% of your budget on these traditional efforts.
What truly makes these traditional campaigns successful is the strategy and focused efforts that go into them. These traditional efforts bring your entire marketing campaign together into one cohesive and well-rounded package.
The last 10% to 20% of your budget may be distributed to public relations efforts, events, or even revitalizing your brand’s identity system if needed.
If you’re looking to revitalize your marketing budget and increase your returns next year, it’s time to think about how you can restructure your marketing budget to work for you. Talk to Concept Marketing if you would like to learn more about how to re-allocate your own budget today.