It’s not an easy question to answer… "how much is enough?"... when it comes to setting your annual ad budget. Even seasoned CEOs scratch their heads and sigh. Marketing Budget Ratio, or MBR, uses a percentage of overall revenue to figure a marketing amount. Other pundits say it depends solely on market factors: • The type of business and length in business. New businesses require an ad investment of as much as 20-30%; older businesses around 7-10%.
• The location of the business and how hard you have to work to get customers in the door.
• Your competition and how much they spend to compete for your customers.
• What you can afford (or can’t afford not to), which means you may have to borrow to allocate appropriate funds.
• Whether you leverage volume or margin. Volume-driven companies tend to require a smaller percentage compared to margin-driven goods.
2010/03/07 10:16