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How to calculate an advertising budget

How to calculate an advertising budget

Every company must stake its own space in the marketplace to survive. In order to successfully interact with your customers, each business must decide on the best course of communication. This function is facilitated by your company’s marketing budget.

Each business owner is an expert in their given area of practice. Everyone needs customers, yet often, stakeholders haven’t been provided with a game-plan of how to reach those customers through advertising.

We’re providing a roadmap for your future marketing budget. The purpose is to help the business owners focus their resources for the best ROI on their investment. If you begin with a focused process, your odds of success greatly increase.

When deciding on a typical marketing budget, there is no definitive answer on the dollar amount a business should spend. How much you plan to allocate depends on a number of variables including the industry you are in, the size of your business, its growth stage, your annual revenue goals, your projected sales, your cost per acquisition, whether you are willing to spend on websites, mobile apps or some other long term project.

It may be helpful to examine some methods of determining marketing budgets and average percentages that companies use in their calculations. You need to determine your marketing budget wisely and not depend on what is left over after your business expenses are covered. We are here to give you some guidelines that you can use to determine your marketing budget.

As a general rule of thumb, Colure Media suggests that the marketing and advertising budget should be on an average 10% of the company’s overall revenue. This budget should be split between brand development costs including the channels you use for marketing and the costs of promoting your business (campaign, events, and advertising etc.). The percentage of revenue calculation should account for possible additional factors such as new product launch, new market entries, and mergers/acquisitions.

For companies who are unsure of their revenue goals or don’t know their exact overall revenue, we suggest calculating their marketing budgets using cost per acquisition (or CPA). Using a CPA, we help companies reverse engineer their budgets by understanding their sales goals. For example, if a company wants to sell 10000 units of something and if they know their CPA, they can calculate their marketing budget by multiplying their sales goals of 10000 by CPA.

It is very important to re-examine your CPA, as this is a number that you want to optimize. Your goal is to make it lower since you want to receive a higher rate of return on every dollar you spend on marketing. Continually look around for new and more effective methods of reaching out to your target market. The use of new and improved technology can help you optimize your cost per acquisition.

If you are seeking out the development of projects like mobile applications, website development, and mobile marketing (or some other long term project), our advice is that you pull that project out of your total budget and calculate its own budget as a separate line item. The reason being is that these long-term (5 to 7 years) marketing tactics require an initial heavy investment and small investments later on. You are better off doing an initial investment of around 8 to 10% on these large projects and then 2% of your annual revenue towards web development for the next 3 years. After that, you need to put money only for updates and maintenance for the next couple for years.

Once you have set your marketing budget, remember that it is not a fixed value. There might be times when you will be throwing in another unplanned event or campaign. The main thing is to know whether your spending is giving you your required ROI.

One of the biggest issues facing new and existing businesses is that they may not know what their marketing and advertising budget should be. Often, businesses don’t understand the process of media planning. Many times budgets are set blindly, with a number just being thrown into the air and hoping that it lands on the success outlined in their business plan (if they have created one).

There are three components to every business:

     1. Unique product/service

     2. Profit

     3. Marketing/Advertising/Sales

At the end of the day, a business with unlimited funds can spend plenty of money and time running test after test, but they may sacrifice market share to competitors (who may have inferior products/services) who are knowledgeable and have navigated these seas time and time again. Blindly throwing money at your advertisements is not the answer. Define your goals. Examine your numbers. Start with a solid plan that can be modified, with purpose, as time passes. We hope that this will help your gain a better perspective on your marketing efforts.

If you want to discuss your advertising needs, contact Colure’s Project Managers to help you reach your target audience.

Protecting Your Brand Identity

Protecting Your Brand Identity

The increasing digital nature of the world has been a blessing to marketers. SEO-focused blogging and social media marketing have allowed companies to focus awareness and dramatically increase their profits for little cost. At the same time, the consumer-focused nature of this digital world has also threatened one thing, brand identity.

Establishing Your Brand Used to Be Simple

Before the internet placed so much power in the hands of consumers, your brand identity was in your hands. Businesses could control the messages about their company. They could control content, ensuring the perception of their brand remained positive and on-point.

A Plethora of Voices

Today anyone can go to social media and criticize your products and brand. They can write a blog posting that ranks higher in Google’s search results than you’d like. Control has left the hands of the marketer. The issue is multiplied in the service industry, where review sites like Yelp, TripAdvisor and Angie’s List – all designed to improve customer experience – can seriously threaten your brand’s credibility and identity.

The consumer has a direct voice to connect quality to value. Now branding efforts must address both macro and micro management strategies. Companies must be responsive to individual voices of dissatisfied consumers, while focusing resources toward broader quality efforts and branding.

This is the price of doing business. Rightfully so, consumers can now put their mouth where their money is. The business community must do the same.

What Can You Do?

Successful companies leverage positive reviews into word-of-mouth advertising. This remains the single most effective type of advertising today.

If your company is being battered with negative reviews, what can you do? Here are a few ideas to start:

  • Find them. Use focused social media searches to discover what consumers are saying about your company. 
  • Respond diligently. Once you’ve found complaints, don’t just dismiss them. These reviews are actively read by consumers. Consumers are often more likely to embrace a review than an advertisement.  Respond to the feedback openly and solve the issue. Deal with it.
  • Improve. Don’t just make empty promises. Empty lip-service is the worst response you can provide to a complaint. If you have an issue, deal with it. If you get called on the carpet because of poor service – deal with it. If the customer is upset – deal with it. Don’t dismiss the complaint, resolve the issue. Even if it costs you a few dollars and a bit of time – solve the problem. At this point, damage from the mismanagement of a complaint only escalates.
  • Grow from your mistakes. Learn what the consumer wants. It’s that simple.
  • Take feedback. Make this an opportunity to improve your brand – your customers will thank you for it.

Contact Colure’s marketing team. Discover the art of crisis management. Learn from a team that can help you properly manage your corporate image.

Audience retargeting in social media

Audience retargeting in social media

Advertisers use the practice of ‘audience retargeting’ in order to market a product to the most relevant audience. Social media has become one of the most vital parts of modern society because of its focused ability to meet this need.

The practice of retargeting allows companies to specifically target consumers who have previously demonstrated an interest in their goods or services. Manipulated content allows companies to place their brand freshly into the audience’s mind.

It is significant to focus on consumers who are truly engaged with a brand. In order to grow a business, it is critical to interact, stand out and appeal to your audience.

Facebook is extremely successful in terms of rebranding. They have access to critical data covering a fifth of the entire population of the planet. Because of this powerful information, they are able to place a specific ad in front of a specific person at a specific moment.

The data entered on Facebook pages such as personal preferences, searches, interests, and likes is identified, indexed and stored. Once the information is processed, they match commercial clients to your interests. It is not coincidental that as you search the web for a new computer, ads from electronic companies begin appearing.

The concept of retargeting is essentially a cycle. It begins when a potential customer visits a website and make a request. An association is established between that person and certain markets. As that person continues to ‘surf’, greater amounts of detail about that individual is gathered by various groups. As that person spends time on the internet, much of the commercial results surrounding that person will be molded to their tastes. The cycle both begins and returns to the individual.

By placing focused advertisements in front of a specific audience, companies are able to achieve a couple of critical goals. They maximize the effectiveness of their advertising budget. They’re able to place their advertisements directly before the audience most apt to make a specific purchase decision.

In the end, retargeting is the main tool used to manipulate consumer traffic towards your website. Contact Colure’s marketing staff to discuss the most effective exposure for your company. 

Why Content is Critical to Your Audience

Why Content is Critical to Your Audience

Relevant content is critical to grabbing your audience on an emotional level because they’re searching for answers to their questions. If your content is nothing but bologna, you will lose your audience in a matter of seconds.

So, how do you engage your audience? Take the proper steps to ensure valuable and easily readable content

Three things you need for strong content:
  1. A goal: Provide a focal point of the article. All ideas will contribute towards this central theme.
  2. A voice: Define your point of view and express yourself in the content. Make your statement and provide examples to support your statement. People will need to understand why they should believe what you think.
  3. A lesson: Remember, you are the author. You may not be in a classroom, but be sure to enrich your readers. Be sure that they gain something from reading your work. You are educating and entertaining them by providing information they may not have.

The average Internet user will view a web page and determine whether to continue reading or visit another website in approximately 8 seconds. Even if the user stays longer than those 8 seconds, they have the tendency to skim through, reading only about a quarter of the article. Your content needs to stand out and grab their attention quickly. You must understand your audience.

A short attention span is a dangerous thing. Like the bull that charges a red flag, Internet users flee when they are distracted. They’ll begin to scroll down the page to see a picture or a video. If they notice that the article is going to take 10 minutes to read… Bon voyage! They’ll be gone in a flash. Why would they waste their precious little time reading an elongated article, when they can go visit another web page that tells them what they want in half the time?

Quality content is critical to your audience because it’s the only thing that engages your reader.

Contact Colure to discuss your project’s content, vision and scope.