Bowling Shoe Advertising...
Mom Said, "Just Do It!"

Advertising Dollars...How Much Is Enough?

Coins_graph It comes up in nearly every conversation I have with business owners.  "How much money should I budget for my advertising?"

Some even have their own answer:

Last week in Kansas City a fellow confidently answered that question by saying, "Two percent of sales!  That's it, that is the magic number!"

He was pretty sure of himself...and that is the problem.

You see the correct answer isn't that simple.  The better answer is, "It depends." 

It's much more difficult that just throwing out a number.  You need to know some stuff first, like:

  • Are you taking a new product to market?
  • Are you advertising a consumer based product?
  • How broad is your target market?
  • How narrow is your target market?
  • Do you know your target market?  (If not...back up and learn)
  • Do you think you know your target market?
  • Do you know how your target market receives messages?
  • Are you happy with keeping sales level - no increase?
  • How long do you want to stay in business?  (Really...)

Man_engagement_ring Several months ago I wrote about a real world example: A jewelry company that literally owns the market in California.  They spend 12% of their gross sales.  Result:  Each of their seven stores rake in $11 million in sales while the "average" jewelry shop in a mall has gross revenue of $1.1 million.

Or this from last year where I wrote about the simple costs of just CREATING an advertising message...that is sound, professional and on target.  Go it again...we'll wait.

The bottom line:  It's just plain silly to throw out an arbitrary number because that number is different for every business situation.  No matter what some professor at some seminar said...

What do you think?

Michael P. Libbie - Insight Advertising, Marketing & Communications where we think "knowing" is better than "guessing"...