A Guide To Determining Advertising Budgets

As we enter the 2013 planning quarter, our most frequent client conversations are centered on the annual marketing communications budget. For most companies, what they would like to invest in marketing communications and what they can afford are two different dollar amounts. So determining the annual marketing communications budget and how to most effectively allocate that budget is a key CMO responsibility that requires market insight, proper evaluation of marketing activities and some creativity. 

The brand’s goals, its current market position and specific challenges, as well as competitive activity, should all be considered so that no one method should bind a company. And because there is no single method of determining a proper marketing communications budget, the process can be an in-depth and difficult one. However, a fairly simple and commonly used method that we refer to as a first step is determining the ratio of advertising expenditures to projected sales.

This annual report, created by Schonfeld & Associates, Inc. and featured in Ad Age, is a valuable resource. We use it as a discussion guide and to help prevent our marketing wish list from getting way out of proportion.

You can download the full 2011 list with the top 200 industries HERE.

          - Linda Passante, CEO, The Halo Group