Monday 4 January 2016

Marketing Budget 2016: Plan your successful financial year

The heart of any business's success lies in its marketing. There are a number of advertising options available in the market however, merchandise marketing still rules the chart. With the help of promotional products, any business can advertise its product, service or idea to potential customers. But what should be your budget for promotional items and corporate apparel?

Let's have an insight back to 2015. According to Forrester Research, 
  • for B2B firms, marketing budgets in 2015 as a percentage of firm revenue kept within the 7-9% range;
  • for B2C firms, marketing budgets as a percentage of firm revenue were hovering around the 9-11% mark;

What percentage of the overall budget should you allocate to marketing in 2016?

The first step is to set your annual budget for marketing. According to the VGM Group Member Service Organisation, small businesses with revenue lower than $5 million allocate 7 to 8 per cent of their total revenue to marketing. For businesses with revenues over $5 million should allocate between 10 and 15 percent.

Marketing spending should also take into account your business goals. Budget on the lower end of that range if yours is a well-established business with a goal of maintaining current awareness. But if yours is a new or established business planning for growth, you’ll need to allocate more to marketing. 

Below on the graphic you can see suggestions by Forrester Research for the most successful ways to allocate the marketing budget: 

There is always space for raising expenditures for digital advertising - in 2016 digital marketing should be your primary tool in promoting business. Note that on graphics overall online marketing budget includes not only 10 per cent of digital advertising, but content marketing, website, and digital events as well, representing 32%. According to our forecasts, the average firm's online marketing budget is expected to grow up to 40% by 2019.

Remember to be consistent with corporate social responsibility - spend at least 2% of the budget for self-regulation and participation in initiatives that benefit society.

What budget should you allocate to promotional products?

The budget for promotional products is not such a key factor, as an overall budget per line item - trade show or event, - yet, it is highly important. Evaluate past performance on your efforts. Eliminate or reduce the budget on efforts that didn’t show an ROI the previous year due to low attendance or incorrect target market, and then move the funding to those with more untapped potential. Note that the spending on trade shows and events should include giveaway items and promotional merchandise costs.

The budget for marketing items can be distributed through various categories, not only events and conferences. A huge part of the budget - 7% - can be spent on other purposes, such as promotional gifts - and don't forget about 4% of traditional advertising.

How to plan a successful marketing budget?

1. Set your annual goals — quantitative such as total revenue, profit, number of customers, and strategic — new markets, new distribution channels, or brand renewal.

2. Outline your major marketing campaigns. Your plans should include the top 3 campaigns you will run to generate leads, the main promotions and giveaways through the year, the media you will use (email, social, print, telemarketing, trade shows, publicity), tools, technologies or resources you’ll need (a new website, an email service provider, or new software).

3. Develop a marketing budget. Refer to the budget on last year’s spend to estimate your expenditures, and use the data provided by PromoGift to improve your strategy.

4. Revisit your marketing plan regularly to measure your progress. If you don’t review the plan regularly, it’s easy to lose focus.

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