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Setting a promo budget

By Tim Thomson
Profit Impact Broker for ((((( AMPLIFY )))))

The best way to set a promotional budget. Over 3 decades I have helped set budgets for campaigns of all sizes and durations for advertising and marketing. The one thing that I have found working in Radio, Newspaper, Digital, Print, and Promo is that every budget is custom built.

Setting an ad budget means looking at your business, your competitor, and your return on investment. If you have a competitor offering something amazing, you can either go head-to-head or do something completely unique to change to conversation in the current market. The last thing you want to avoid is a race to the bottom.

Start by setting some benchmarks that you can build from. You can research what the typical percentage against your gross annual sales are, then tailor that to your market conditions. 4-6% of gross sales are a traditional starting number and much higher if you were in your first year of business. It is also common to be much lower, just don’t make it 0%.

Looking at what you spent in a previous year or quarter is a common strategy some business use to decide how much money they invest into promotions and advertising.

Another style is to consider what a customer is worth and base that into how you calculate your ad spend.

The internet is filled with calculations for setting your business budgets. My advice is to have a budget, even if its modest then use it to promote your business, products and services. Grow with it, don’t set it and forget it, the competitive landscape is constantly changing; you can have a piece of your budget that you know works and you don’t change, carve out a piece to use to adjust, and set some aside to explore and try new things. Advertising, marketing and promotions is a 52-week job unless you are seasonal or transient.

For help with budget starters, measurements, and competitive analysis please reach out to AMPLIFY.

“We work with organizations who want to be number one. Let’s work together.”

Contact AMPLIFY today at 705-626-8461 or Tim@ampbroker.ca for great ideas for your business.

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