Monday 21 July 2014

Effectiveness of Marketing Spend

Authored by Fahad Amjad

Marketing spending is an organization's total expenses on  marketing activities. This usually includes advertising and non-price promotion.  It also sometimes includes sales force spending and price promotions. 

In a recent survey of nearly 200 senior marketing managers, 52 percent said that they found the "Marketing spending" metric very useful. A massive amount of money is spent on marketing. Depending on the industry a company may invest up to 30 percent of its budget, or sometimes even more, in marketing or we can say for its brand recognition. This spend is often divided into above the line which includes traditional communications and banners and below the line in which advertising based on qualitative argument. Everyone has heard the phrase “You have to spend money to make money.” However many companies think that by not spending they are saving. But by not spending on marketing, they are missing out on an enormous amount of business. People will work on corporate identity, but not plan for the budget to implement it. While it’s essential to have an initial budget for developing your marketing tools.

The best way to do this is to create a marketing strategy and setting a monthly or yearly marketing budget to make sure it happens. A marketing budget is a guide to ensure that you are staying on target with estimated costs vs the actual costs.

Marketing is a basic ingredient for growth and profitability. Many companies fail simply because they do not allocate enough budget for marketing. When it done properly, marketing brings back sold returns.