How much marketing budget should you be setting for 2020 as you work through your strategic marketing planning?
Setting a marketing budget can come from a variety of different angles:
1. Just accept and work with whatever your management team says they have available
2. Take a % of your company revenue. Often this is set around the 10% mark, although that can be hard to justify
3. Take a % of profits. This works in a similar way and 10% can also be a starting point. It becomes interesting when you are reinvesting in new product development and other innovation as there may not be much money spare
4. Bottom-up, where you calculate how much you will need based on what you want to do
5. Top-down, this is typically where you get a smaller amount to spend than you had last year (!)
Most of these approaches (arguably not so much, option 4) are flawed and at the whim of those who don’t really understand that marketing spend should be seen as an investment rather than a cost.
Herein lies your starting point if you are going to do this properly. Begin with the idea that budget setting is a way of evidencing the value of your marketing rather than a way of spending money. In other words, reverse engineer backwards from the desired results and figure out how much you will need to spend in order to gain those results.
I have seen many examples of marketers who fail to help their management teams to understand why there needs to be a marketing budget and that it should be protected at all costs. As marketers it’s our responsibility to create and share the evidence that marketing budgets are an investment, so focus on telling the return on investment story.
This is a good article that will give you some starting points for your marketing budget setting for 2020 https://www.webstrategiesinc.com/blog/how-much-budget-for-online-marketing-in-2014