How to Determine a Marketing Budget for Your Business
Creating an effective marketing budget is pivotal for any business aiming to thrive in today’s competitive marketplace. Whether you’re launching a new product, expanding your market reach, or simply looking to boost your brand awareness, a well-planned marketing budget can significantly contribute to achieving your business goals. Here’s how to set a marketing budget that aligns with your business objectives and industry standards.
- Understand Your Sales Funnel
Start by analyzing your sales funnel to understand how customers discover your business and make purchase decisions. This insight will help you identify which stages of the funnel require more investment to optimize the customer journey from awareness to conversion.
- Set Clear Marketing Objectives
Define what you want to achieve with your marketing efforts. Are you looking to increase brand awareness, boost sales, or enter a new market? Your objectives should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.
- Analyze Past Marketing Performance
If you’ve run marketing campaigns in the past, assess their performance to determine what worked and what didn’t. This analysis can help you allocate your budget more effectively, ensuring better returns on investment.
- Consider Your Industry Benchmarks
Research what similar businesses in your industry are spending on marketing. While it’s not necessary to match your competitors dollar for dollar, understanding industry benchmarks can provide a helpful context for your budgeting decisions.
- Choose Your Marketing Channels Wisely
Different marketing channels offer varying returns on investment. Consider your target audience, marketing objectives, and past performance data to select channels that will offer the best ROI for your business.
- Allocate Your Budget Across Channels
Divide your marketing budget across chosen channels based on their expected performance and your business priorities. Be flexible and willing to adjust your allocations as you monitor campaign performance and market conditions.
- Monitor, Measure, and Adjust
Review your marketing activities’ performance against your objectives regularly. Be prepared to reallocate funds from underperforming channels to those delivering better results.
- Factor in Operational Costs
Remember to account for operational costs related to marketing, such as software subscriptions, agency fees, and employee salaries. These costs should be a part of your overall marketing budget to avoid underestimation.
Establishing Your Marketing Budget
A rule of thumb is to allocate a percentage of your gross revenue to marketing. New businesses might spend between 12% to 20% of their gross revenue on marketing, while established businesses might allocate between 6% to 12%. However, the right percentage depends on your industry, size, and growth stage.
Determining the right marketing budget for your business involves a blend of strategic planning, industry insight, and ongoing evaluation. By following these steps, you can create a marketing budget that supports your business goals and maximizes your return on investment.
Done all that? Now what?!
Once you’ve done all of that, it’s time to put your newly minted budget to work! Reach out to our full-service ad agency, and let us help you craft the killer campaigns & strategies you and your business deserve.
With our knowledge of and experience with crafting impactful marketing strategies that drive results, we can help you optimize your marketing spend in order to get the ROI you need. Contact us today at 904-355-1766.
Parsing Through the Costs of the Macy’s Thanksgiving Day Parade
Originating as “Macy’s Christmas Day Parade” with live animals in 1924, the modern Macy’s Thanksgiving Day is a cherished hallmark of our country, garnering millions in both views and dollars every year.
Costing anywhere from $10 million to $13 million in production cost on an annual basis, families have a tradition of remaining glued to the TV as they watch wondrous floats followed by dizzying dancers and famous musical artists take spotlight after spotlight.
However, up until this year — when Peacock officially grabbed at the opportunity to be the one and only streaming platform to feature the parade — the event only aired on broadcast television, leaving marketers wondering whether it was worth the cost of sponsorship in a world that has been increasingly concerned with digital consumerism.
Our take on it? Absolutely, it still pays off. Here’s what to keep in mind:
The “Why”
Let’s face it: The Macy’s Thanksgiving Day Parade is here to stay.
Most would agree that simply partaking in the parade is an honor, offering companies the opportunity to showcase their commitment to American ideals and unity. And what better way to boost your brand reputation than to contribute to a national sense of holiday joy?
But warm and fuzzy sentiments aside, the reason a company might choose to participate as a sponsor of the Macy’s Thanksgiving Day Parade is simple: for the sheer amount of views they’ll amass.
This year, “NBC’s coverage of the Macy’s Thanksgiving Day Parade drew a total of 25.4 million total viewers and a 6.4 rating in the adults 18-49 demographic on Thursday across the live broadcast and encore immediately after,” according to Deadline.
What’s more, with holiday shopping on the horizon for most households, even an ephemeral appearance of your brand’s logo on a float may be all it takes to plant a spending seed in the mind of your potential customers.
The “How Much”
As large companies generate considerable returns on their investment following the Thanksgiving Day Parade, it makes sense that many would clamor to purchase ad space while the renowned parade airs live.
“In 2019, the network generated an estimated $49.2 million in ad revenue from the Macy’s Thanksgiving Day Parade, while The National Dog Show brought in $11.7 million and the prime-time NFL game … yielded $72.1 million,” as reported by AdWeek. “That’s close to $133 million in ad revenue for the three events.”
And comparing that to the aforementioned $13 million production price tag? Well, yeah, let’s just say that’s not bad at all.
That being said, for those looking to skip the traditional commercial ads and actually be recognized in one of the nation’s most beloved and non-controversial events of all time, businesses may also opt to sponsor the balloons themselves.
In fact, according to CBS News, brand new parade balloons cost sponsors approximately $200,000 each, or nearly $90,000 should they sponsor a returning balloon.
The Bottom Line
Okay, so maybe your business isn’t quite ready to tackle the Macy’s Thanksgiving Day Parade, but that doesn’t mean you can’t hold onto it as a big audacious goal of your own.
And if you’re ready to embark upon the journey that will carry you into the right direction of growth, Mad Men Marketing can help you get there!
After all, here at Mad Men Marketing, we are rooted in the belief that brands should interact with their customers, not interrupt them. And what better way to grow than to have measurable goals and research experts at your fingertips? From traditional marketing expertise to digital strategy, social media engagement and more, our team is ready and waiting to reach new heights of gratitude and success.
So, if you’re ready to learn more, contact Mad Men Marketing today by calling (904) 355-1766!