Plan Your 2016 Marketing Budget

As I detail in my book, Power Branding Secrets, marketing drives a brand and your marketing budget provides the necessary fuel to instigate growth. But how much fuel [budget] should you allocate towards your marketing engine in 2016?

Common business sense would state that between 8 percent and 12 percent of revenues should be budgeted for branding, advertising, and other marketing activities. Aggressive brands commonly allocate between 14 percent to 20 percent of their revenues for their marketing.

This amount obviously varies significantly by company and industry. An average company spends approximately 6 percent of sales on advertising alone. You should spend more on branding, advertising, and marketing if the following conditions exist:

• You are launching a new brand.
• You are launching a new product or service. (Some new businesses and brands spend between 50 percent and 100 percent of revenues the first year of launch.)
• Your product offering is large and complex.
• Your brand is a luxury brand.
• You charge premium prices.
• You sell products and services in a “low involvement” category (typically low-priced items for which there is little risk of failure).
• More than 10 percent of your revenues come from online sales.
• You are selling commodity products (advertising will be the primary differentiator).