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How to set and maintain an advertising budget?


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If you have your own business, you’ll understand the importance of planning and establishing an advertising budget. 

A lot of factors go into deciding what an appropriate budget will be. And most of it depends on what your products are and how long you have established your company. 

Moreover, after the pandemic, digital advertising strategies have become very popular. In fact, 62% of American consumers say they are shopping online much more than before the pandemic. 

So, if you’re also looking for tips on setting and maintaining your advertising budget, this article is here to help!

  1. Define your business strategy

First, you must clearly define your business goals and strategies. Remember, a budget plan is simply a tool to help you achieve your goals. So if you don’t know what you’re aiming for, you won’t be able to decide on the budget. 

In case your goals aren’t clear, you have to set up a meeting with your teammates and have an open discussion. 

In your business strategy, you must also have an affordable and realistic marketing plan. 

This is where you’ll define your brand and its products and also target the right customer demographic.

  1. Try the percentage of sales method

One very common method of setting the advertisement budget is to try out the percentage of sales method. 

Here, the money you’ll spend on advertisements and marketing will depend solely on your sales. 

For example, if your sales in the last year summed up to $3,00,000 and you have spent $30,000, then it’s clear that you have spent 10% of your sales figures. 

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This is based on the idea that sales follow advertising efforts and strategies. So, even though it’s not a scientific method, it maintains competitive parity and lets you look at the budget from all angles.

  1. Measure the effectiveness of your expenditures

When you have decided to spend a certain amount of money on advertising as a brand, it only makes sense to check its effectiveness. 

For example, you’ll need to look at the lead conversion rates, website traffic data, and how many leads you generate. 

Suppose you haven’t yet started tracking these metrics or don’t know which website to refer to for things like retail media measurement or other analytics. In this case, you can look up resources online or ask professionals. 

The metrics that you pick up or analyze will give you a clear idea of whether or not to spend more on your next advertisements.

  1. Go for the objectives and tasks method

Another popular marketing budget-setting method is to go for the objectives and tasks method. Here, you have to consider your company’s environment and requirements. 

First, you must define the specific objectives of the advertising campaigns you plan. Then you must determine the tasks needed to be carried out to fulfill those objectives. Lastly, estimate the cost of each step and make a sum for all these steps combined. 

Since the objectives and tasks method is based on the relationship between your objectives and tasks, it will be a scientific approach.

  1. Understand your current marketing spending

Determining your current marketing expenses will give you a clear picture of where you stand. 

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This includes a detailed breakdown of everything you do to promote your business, including digital and conventional advertisements, digital assets like social media and websites, events and marketing collaboration, and sponsorships. 

You might notice that a lot of marketing spending is incorrectly defined in the quarterly or annual budget. 

You might forget to consider trade shows or digital marketing, but these will also have to be considered.

  1. Do the competitive parity method

Competition is one of the biggest factors that can make or break a marketing strategy. In the competitive parity method, you have to consider your competitor brands’ advertising trends and strategies and then set a budget for your own. 

This advertising budget will also be set according to your competitor companies’ actions and whether they’re getting satisfactory results. 

However, this doesn’t mean that you will blindly follow your competitors. Since your products will differ from others, mix and match according to your tastes.

Over to you

These are a few basic methods that will help you to set up and stick to your advertising budget. So don’t wait anymore and try them out!

Bellie Brown
Bellie Brown
Hi my lovely readers, I am Bellie brown editor and writer of I write blogs on various niches such as business, technology, lifestyle., health, entertainment, etc as well as manage the daily reports of the website. I am very addicted to my work which makes me keen on reading and writing on the very latest and trending topics. One can check my more writings by visiting

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