11 June 2021|Latest Posts, Marketing, PR, Promotion
If you are looking to carry out a marketing campaign it is important to have a clear budget, which is realistic and affordable. Often budgets assigned to marketing are either a complete guess with no thought behind the amount allocated or are optimistically low, where someone believes or hopes they can achieve great things for very little investment.
Here, Suzie Farrell, Account Director at marketing agency PMW, answers some common marketing budget questions.
1) How much should I spend on marketing?
When a client comes to us looking for assistance with their marketing, one of the first things we ask is what their budget is. Occasionally, the response is, “We don’t know”.
This is never a good place to start. Marketing is never-ending. When done well, the more you put in, the more you get out. That doesn’t mean you need an endless pot of money in order to achieve anything worthwhile – that’s where experience, knowing your audience and creativity come in – but what it does mean is you need a clear idea of how much you are prepared to spend before commencing marketing. Being aware of what you can afford is critical.
Marketing textbooks may tell you that earmarking 10% of your profit for marketing is the norm, but there is no definitive right or wrong. What’s most important is assigning a budget that you can realistically afford, because no form of marketing comes with a guarantee. Be prepared for a period of trial and error before you find what works best for your company.
Switch your mindset from thinking results are guaranteed to accepting that some things will work better than others. While you are unlikely to see a positive return from every part of your investment, you may well see a very healthy return from some. The knack is to do more of what gets you good results. Of course, you won’t know before you start what that is – prepare yourself for some successes and some failures – great marketing doesn’t happen overnight.
2) Why should I bother with marketing if my company’s doing okay?
Marketing for some can be somewhat of an afterthought, especially if a company is performing respectably already. It can also be one of the first things to be cut when times get tough.
If your company is doing well without marketing and you’re content with that, then great. But don’t you want it to perform even better? If it’s doing well without marketing, just think how well it could do with it! Plus, if you allow things to coast for too long, it’s inevitable that a competitor who is investing in marketing will come along and gobble up all the business, just by being on people’s radars.
Cutting marketing in times of austerity is the worst thing you should do. When times are tough, competition is rife. Why would you want to become less visible in tough times and risk losing out to competitors? It may seem counter-intuitive, but marketing budgets as a percentage of income should for this reason actually increase, not decrease, in times of economic difficulty.
3) How will I know where to spend my marketing budget?
Choosing how to spend your marketing budget depends on:
· Your audience – who are they, where are they and how can you best reach them?
· Your objectives – what do you want to achieve, e.g. sell tickets, raise awareness?
· Your investment levels – how can you achieve the above affordably and over what period?
Only when you have the answers to the above points, are you then ready to make your choices.
Consider this example:
· You have identified your audience as consisting mainly of women in the UK aged 25-45.
· You want this audience to sign up for a paid subscription of your online book club.
· You have £5,000 to spend over two months to achieve this.
First, consider the potential platforms through which you can reach your identified audience. This may include TV, radio, social media, print magazines, blogs and live events.
Next, think about what you’re prepared to invest. £5,000 isn’t going to be enough for a decent radio or TV ad campaign, so they’re not the best bets here. It might enable you to produce a radio ad, but you could then only afford to play it once or twice – effective marketing relies on repetition and reiteration. You may consider national magazine advertising, but then find that’s also cost prohibitive.
Our motto is Do it well or not at all– a useful rule to remember when choosing how to spend your marketing budget.
4) Should I do my own marketing or pay someone?
To answer this question, you need to consider where your expertise lies. If, for example, you are brilliant at social media, have the time to do it on top of your job, can reach your target audience this way and achieve your objectives, then go for it!
Beware though, of making the wrong choice. You shouldn’t be deciding how to spend your money based on your expertise alone. If you believe a PR campaign is the best and most cost-effective way for you to reach your audience and achieve your objectives, but don’t have the faintest clue where to start with a PR campaign, your money would be better spent hiring a PR expert than choosing the wrong platform, just because you can manage the other platform yourself – many companies have made this mistake and paid handsomely for the consequences.
5) How do I monitor my spend and the results?
At the outset of any marketing campaign, it is important to have metrics outlined to enable you to measure the success of your marketing campaign. Here are a few examples:
· Traffic to website
· Link clicks
· Newsletter sign ups
Regularly look at the data you’re achieving from your marketing efforts to check if you’re hitting your targets. These could include:
· Social media data (likes, follows, shares, clicks)
· Media coverage achieved (which publications, how many cuttings, positive or negative)
· Google Analytics (clicks, traffic, dwell time, bounce rate)
· Newsletter subscribers (new subscribers, unsubscribes, read rate, click throughs)
· Purchases (units sold, average spend, lifetime value of customer)
Do more of what works and less of what doesn’t. Remember though that things can change – buying habits, trends, platform popularity – so what works one year might not work so well the next.
1) Allocate a comfortable budget
2) Choose channels based on audience, objectives and affordability
3) Monitor often
4) Tweak where necessary
If you remember these four rules, you should be reaping the rewards of an effective marketing campaign in no time!