How to Plan a Business Marketing Budget

When business owners think about marketing, the first question is usually, “How much should I spend?” The most common way to establish a marketing budget is to use a percentage of sales revenue.

Marketing budgets range significantly. But, according to a study conducted by the CMO Council, a professional organization for Chief Marketing Officers, 58 percent of business marketing budgets are up to 4 percent of their sales revenue. While 2 percent of businesses spend more than 20 percent. It is safe to say that, in order to execute an effective marketing plan, businesses should spend between 1 percent and 10 percent of sales revenue on marketing. Additionally, half of a marketing budget should go toward branding services and establishing brand awareness.

Many factors dictate how marketing funds are split up. For instance, it costs more to market a new product, so businesses will increase their marketing budget when launching new products or services.

How quickly a company wants to grow and expand determines how much sales revenue is committed to marketing and advertising.

Creative Media Alliance, a Seattle advertising agency, can help you gain maximum effectiveness from your marketing budget. Beyond our expertise in marketing areas such as video production services and media buying services, CMA has always been dedicated to honest communication with our clients. That collaborative transparency results in the best return on your marketing dollar. Contact CMA today to learn more about how our Seattle marketing company can help you establish and appropriate your marketing budget.