July 10, 2018

How to set your ad budget for the year: the easy way, and other ways.

“How much should we invest in advertising?” is an annual budget struggle.

One simple way is to use your category’s average ad-to-sales percentage.

budget percentages

Just ask us* to share the tables from the newly-published 42nd edition of an annual study, Advertising Ratios & Budgets. This research is derived from more than 4,300 individual companies in 310 industries. Look up your category (for instance, if you’re an amusement park), find the industry norm of sales devoted to advertising (6.2%, on average), and multiply that by your anticipated sales. Presto! One easy ad budget.

But a caution:

YMMV. Sticking with a category average may be easy, but it’s what call the NGNG approach: no guts, no glory. We suggest you read our White Paper, which offers several strategic alternatives.

*We’ll send you the tables so you can use your industry’s average, since you’re probably not an amusement park. Email to ask.