Marketing Budget Strategy: How much do you plan to invest in your Marketing Budget for 2007?

As 2006 comes to a close, many companies have their 2007 marketing budget already in place.

If you're a business owner or a top level sales & marketing executive, you've probably struggled with trying to figure out how much to invest in marketing your products, services and trying to build the brand name of your business. Do you project your investment as a percent of projected revenue? Or do you take a look at the percent of revenue coming from new customers and new product sales? How much will it take to retain the current customers? How much to get current customers to buy more?

If you're expecting some serious growth next year, you know you've got to lay the groundwork with a plan and then fund it. But what's the right number? Sometimes looking at the competition helps, or just looking at averages. So how much do companies spend on marketing?

The long (and correct) answer: it depends. According to a study from 2004, the answer is a 9% average. Better answer: it depends how much revenue they have. Or want. Or who they want to reach. Or how they reach them.

Bottom line: Companies with $100 million in revenue or more allocate an average of 13.8% of revenue to marketing. Companies with less than $100 million in revenue allocate an average of 8.7%. More complete information is available at the Blackfriars Marketing survey.

I think the first place to start is your marketing strategy. Who's your target market? Are you trying to reach consumers or business people? Your budget will be a lot different if you're trying to reach and influence:

• 300 million people (entire US consumer population) or
• Only the 32,541 design engineers who could use your particular product to enhance their design or
• the actual number of car owners living in a 30 minute driving radius from your service or
• the specific number of single males between the ages of 25 to 40 with an income of $40,000 plus.

Your marketing budget depends on your marketing strategy. Depending if your strategy is to blanket the world with your message or use a silver bullet to target the specific individuals with the buying authority to make the purchase decision for your product or service, you'll be looking at very different budgets.

So what's your marketing strategy? A blanket or a bullet? This determines your budget more than even the size of your company and your expected growth percent.

Tags: Marketing Branding Marketing Strategy Marketing Budget