How much to budget for marketing improvement?

Improve your campaigns with marketing measurement.

Improve your campaigns with marketing measurement.


Marketing accrues sales. Marketing improvements pay off, if the profits from increased sales surpass the costs of improvement measures. Typically such measures are training, trying out new marketing methods, focused campaigns with measurable KPIs and post-campaign measurement of impact.


Marketing improvement pays itself back if:

increased sales * profit margin > cost of the improvement measures


increased sales = sales (with improved marketing) ““ sales (with regular marketing)

This formula cannot be plugged to Excel directly because it is hard to guess the exact impact of improved marketing efforts on sales. Still, some conclusions are possible.


Razor-thin margins or growing premium brand?

The bigger the profit margin, the wider the variety of tools that fall under the marketing development budget. Walmart has razor-thin margins and uses 0.4% of revenues for marketing, while growing service companies might market with over 20% of revenues. Consumer marketing strategy and activities differ wildly from B2B marketing.


Try new ways to increase marketing impact

It is only after implementing improvement measures that you can assess if the new marketing method makes sales explode by reaching new customers and appealing better to existing ones. Let’s assume that any new promising marketing method, for which you give a serious try, has a 10 per cent probability of success. This means that after trying N new methods

probability (breakthrough) = 100% – (90%)N

As success depends on the number of attempts, this formula recommends continuously trying new approaches within budget set by the first formula.

Help in marketing measurement and analytics

Partners like M-Brain can help you in this experimentation with post-campaign marketing measurement tools and analysis. M-Adaptive enables you to follow what people say about your brands and hot topics. You can subscribe to a scheduled report with charts and discussion quotes to hear the splash that your campaigns make and to identify real-time marketing opportunities. For larger marketing budgets, Intelligence Plaza collects together all relevant financial and media monitoring measures.


By Simo Härkönen



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