Know-How Exchange : Other

Industry averages are more likely to mislead you than help. By definition half the companies spend more and half spend less.

Your spending level needs to be consistent with your objectives. If you're trying to gain market share or expand into new markets, you'll probably need to spend more. If you're just feeding the cash cow, you'll want spend less.

Furthermore, companies that comprise the "average" don't all do their bookkeeping the same way. Some include sales commissions, and some don't. Some capitalize certain packaging investments, while others expense them as they are incurred. Etc. Etc.

If I told you that the average temperature in the world is 58.3 degrees (Fahrenheit), would you know whether to put on an overcoat or shorts when you go outside today? Of course not. Same with the average spending level in your industry.

Don't waste your time looking for a meaningless average.

Thank you for your answers -

Of course, there are many variables in this question and in my practice, objectives always drive the marketing budgeting process. However, I'm sure you've all had a client or two who really wants something to "justify" a gut-feel budget to a management team that doesn't understand marketing and doesn't want to understand marketing - but wants to benchmark where they might fall in a field of their peers. Sometimes anecdotal information is useful in this situation...