The marketing budget is the amount a company sets aside for acquiring and retaining customers. There is no universal percentage of turnover – ranges vary several-fold between sectors, and the same percentage means a completely different amount at a margin of five percent than at a margin of fifty percent. It is more useful to calculate from the bottom up: how much it costs to acquire one customer, what value they will bring you over the entire relationship, and how many new customers you need to meet the plan. This yields a budget that can be defended. When dividing it, plan for three layers: performance campaigns with a fast return, brand building with a return over a horizon of months to years, and operations in the form of the website, tools and content. Keep the media budget separate from the fee for work – mixing the two makes it impossible to evaluate the real effectiveness.
See also: Contract with a marketing agency, Tax deductibility of advertising costs, Seasonality of demand.
