When talking about marketing budgets, many business owners usually use the 10% rule for their marketing budget. This rule is about allocating 10% of the business’ revenue for the marketing budget. Although this technique is highly-recommended by CEOs and many successful business figures, businesses are not obligated to follow this calculation. This is because every business has various offerings and circumstances. Here are some factors that might affect your marketing budget:
1. The market is saturated with big companies.
Competing against big companies or brands can be very challenging, especially for new-established businesses. Therefore, business owners should invest more in their marketing budget so they can penetrate this market. Increasing the quantity of advertisements and campaigns would enhance recall and recognition, thus your brand would start to enter your target market’s consideration set.
2. The business has a new product launch.
When launching a new product, it is recommended to invest more marketing budget in the product’s launch campaigns. Therefore, it is alright to go beyond the 10% marketing budget rule since marketers need to keep promoting the existing product offerings alongside the new product.
3. The business is offering niche products or services.
Targeting the niche audiences can be very complex because your business might be lacking in economies of scale. Furthermore, the business does not have many competitors. Therefore, businesses with niche offerings are not recommended to follow the 10% marketing budget rule, it’s perfectly fine to go below.
4. The business has limited capital.
Did you spend too much on R&D (research and development) for your product offerings? Or perhaps you spent too much on human resources? That’s not a problem! You can just minimize this month’s marketing budget and invest more in the coming month!
So have you decided the right marketing budget for your business? SevenAds is here to help your advertising budget as we provide marketing-related services.