47 Budget

A large budget can incorporate more expensive marketing communication techniques—such as mass-market advertising and sales promotions—a larger scale, a broader reach, and/or a longer time frame. A small-budget campaign would rely primarily on in-house labor and existing tools, such as a company’s Web site and content marketing, email marketing, and social media capabilities. It’s important to figure out how to get the biggest impact on the available budget.

Campaign Budget Plan Framework

The first step in developing a campaign budget plan is to start with the total budget available to spend on a campaign. This budget figure works as a guardrail to keep your plans in line with the available resources. Next, think about the promotion mix you envision. Will there be advertising? Digital or direct marketing? Any public relations activities? List the different methods and key tools you plan to use, and then determine how much of your budget you plan to spend on each.

Determining a Budget

Marketing budgets help the planning of actual operations by forcing managers to prioritize activities and consider how conditions might change. Marketing also encourages managers to take steps now, so they can deal with problems before they arise. It also helps coordinate the activities of the organization by compelling managers to examine relationships between their own operation and those of other departments, which is a key component of IMC.

Top-Down Budgeting

In top-down budgeting methods in which top management decides the amount the company will spend on promotional activities for the year; Top management sets the overall amount the company will spend on promotional activities for the year. This total amount is then allocated among all of the advertising, PR, and other promotional programs.

Bottom-Up Techniques

Alternatively, some companies begin the budgeting process each year with a “clean slate”. They use the bottom-up budgeting method in which a company begins the promotional budgeting process each year, without taking previous years into accounts. This is done by first identifying promotional goals, and allocating enough money to achieve those goals and techniques.

Objective-Task Method

The objective-task method is the most common technique of bottom-up budgeting and usually the best method for non-profit organizations. Companies that use this method first have the objective or task they want the promotion to achieve. Next, they estimate the budget they will need to accomplish that objective or task. Finally, top management reviews and approves the budget recommendation.