How do you decide on how much budget you need each year to fulfill the marketing communications tactics that coincide with your company's marketing plan? Well, the typical approach is to list the tactics and then list the total cost. Then management looks at the total cost and says to cut somewhere. But where do you cut? While this is not the optimal way to create a marketing communications budget, sad to say, it is how most companies handle this task.
A better way is to develop a marketing communications plan synergistically with the marketing plan to ensure that the marketing goals and objectives are fully being supported. The marcom plan should also outline the key messages, branding messaging, and overall corporate image that the company wants to project. So, first of all, budget, then create your message and then issue your list of tactics.
Many companies use a percentage of sales approach. Consult your industry's main trade association to see if they have any research data available as to an average marketing communications budget for your particular industry. It typically will be represented as a percentage of sales. While this is a standard approach, you also need to consider where your products are in their life cycle. Are they mature? Is there a new competitor entering the playing field? Are you repositioning your product to grow market share? Is your industry growing or shrinking? Are you planning to market that product into other markets?
So, what should be included in the marcom budget? Strictly any promotional and advertising expenses. Your marcom budget should not include the salaries of the staff, travel expenses or other overhead expenses. The marcom budget should include all of the expenses to get a marcom project completed including design, printing, digital media, etc. Printing the company's letterhead and stationery, for example, should not be included.
If you are severely underfunding your marketing communications efforts, specifically compared to your competitors, then you need to decide if you are really serious about making your company successful.
Labels: advertising budgets, direct marketing, marketing communications