Question

Topic: Research/Metrics

What Is Appropriate Marketing Spend As % Of Sales?

Posted by Anonymous on 6/15/2005 at 3:37 AM ET 250 Points
I am curious to learn what is average marketing spend as a percentage of sales? Or in other words, what "should" a company expect to spend for each $100 in sales or gross margins or net margins (or any other metrics...)

"That depends!" you say./. The answer will vary by:
1. Industry type (Mfg., services, etc.)
2. Vertical (Financial, Advertising, Retail...)
3. Size of company
4. Age/Maturity of a company (startup, growth, cash-cow, etc.)

and so on...

Sure! but the one variable I am most interested in is Geographic Location...

It is my experience that companies in certain cultures spend much much less on marketing than say, for example, similar companies in the US. "Sample size = 1"...Yes.

Do you agree? If so - why is this? If not - what are these "average" metrics?

Are there any models that address this question?

Thanks in advance for your response.
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RESPONSES

  • Posted by ROIHUNTER on 6/16/2005 at 10:44 AM Accepted
    RPM/TMGI,

    I have yet to find a client that is the same. The two most common factors that influence the % for my clients seem to be the following:

    A) View prospects by transaction or life-time-value
    B) Aggressiveness in desire to grow client base.

    I tend to look for clients that use a life-time-value model since it allows me greater flexibility to create longer term campaigns and the client is not looking at each day's numbers trying to figure out how to change their approach the following day.

    Hope that helps.
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