Everything you ever read about setting marketing budgets is redundant

Year in year out ADMAP has its 'setting advertising/marketing budgets' and every year the leading lights in the industry tell us its "% of revenue" or "SOV" or "need a market-mix model". Sometimes i wonder what the point of it all is

The average advertising budget as a percent of revenue is around 6%. In B2B that can fall to around 1.5% and in packaged goods that can be up to 10%. However I LOVE search, and search will grow up in 09. The stars are aligned in 09 for search. Problem is, with search the budgeting rules get broken

Budgeting for SEM without actually doing SEM is a real challenge. The concept of pay-per-click search advertising is almost impossible to forecast without being actively engaged in a campaign. You've got to test to see how many clicks you get each day at what CPC by each keyword to start to make a calculation of its ROI

You know what? I'll get out there and say that in 09 up to 25% of ad budgets could be allocated to search...however is that a good enough way of budgeting for search given that total budgets are falling? Looks like we may need some new ADMAP articles

What's cool and different and potentially rule changing is the idea that we could be seeing the end of the way clients set their marketing budget. The tried and tested ways look hopelessly antiquated in this context. Marketing budgets need to be flexible in an uncertain real-time world

Google are starting to manage the inventory for radio, print and TV through the same methods used for its sponsored CPC ads, my guess is we’ll start to see much more variation and responsiveness in marketing budgets

So what will those ADMAP articles look like? Well when things are going well and your cost per acquisition is falling, keep spending! When your CPA is rising, pull back and manage the budget accordingly. Simple? Well not exactly, you've got to track that budget like a hawk, dialing that budget up and down constantly

Next post: ROI on demand? Oh yeah...we do that!