There are a lot of opinions on this, but the consensus seems to be 5-20%. In our experience it is not necessarily the size of the budget that will determine how successful you are, rather the effectiveness of how you spend it and who you spend it with that determines the outcome. Here are our Top Ten Tips.
1. Rule of Thumb
Standard advice is 5-20% of your turnover, however if you are disrupting a sector, bringing something brand new to the market or in a heavily competitive sector this should be even higher.
2. Beware of Free
Free tools such as social media and emails have very little value for most companies and should be seen as customer service tools rather than marketing.
3. Get Hired Help
Hire professionals as soon as your marketing budget (including printing stuff) exceeds £500 a month. It'll save you even more in the long run.
4. Fixed Cost for Fixed Effort
Don't hire companies who charge a percentage of your ad spend. It can take the same amount of time designing a Google Ad campaign spending £100 as it does £10,000, it's the number of products that has an impact.
5. Use a Professional Intermediary
Don't deal direct with media brands, they give their best prices to agencies as they know what other companies are spending for the same thing.
6. Media is Not Marketing
Don't buy digital marketing services direct with a Newspaper company, you'll pay a huge surcharge in management fees because of their large overheads. For instance, Reach PLC take up to 50% of your social media ad budget and 35% of your Google Ads budget as an example.
7. Creating Desire is Costly
Target existing market appetite before you try to create new ones. For most businesses nice shiny display adverts offer poor return on investment but are good for brand building when the time is right.
8. Target Profitably
If you have read our "How Do I Make More Profit?" Article you'll know not all customers are equal. Target your marketing spend in channels that have delivered your best clients in the past first.
9. Image Over Profits
Never get involved in vanity publishing. I know you want to show everyone how successful you are or how proud of your company, but that same press release should target product sales.
10. Knowledge is Profit
Get some marketing training, take a 1 or 2-day course on practical marketing. When you are small you can do a lot yourself, and as you grow you can have the right conversations with your agency.