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+--- Thread: How to determine an advertising budget (/thread-776.html)
How to determine an advertising budget - PJ - 02-03-2023
Question: [font=Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"]What is a reasonable advertising budget in terms of percentage of either gross revenue or net profits?[/font]
[font=Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"]Answer: There is no fixed rule for the percentage of either gross revenue or net profits that a company should allocate for advertising, as the appropriate budget depends on various factors such as the industry, target audience, competition, and marketing goals.[/font]
Typically, small businesses might allocate anywhere between 1-10% of their gross revenue towards advertising, while larger companies may allocate more. As a general rule of thumb, companies that are starting out or have a limited budget might allocate a smaller percentage, while established companies with a larger customer base may allocate a higher percentage.
In terms of net profits, some companies allocate between 5-20% of their net profits towards advertising. However, this largely depends on the company's overall financial position and marketing goals.
[font=Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"]Ultimately, the best way to determine the appropriate advertising budget is to carefully consider the marketing goals, competition, target audience, and financial position, and then make a data-driven decision based on what has worked in the past and what is likely to work in the future.
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