Question

Topic: Research/Metrics

Marketing Budget Benchmarks

Posted by Anonymous on 8/17/2004 at 12:52 PM ET 250 Points
What's an appropriate guideline for the Marketing Budget of a $2.7 billion financial institution? Obviously, that depends on the specific corporate objectives, but I'm talking "in general."

I've seen a number of benchmarks: 4%-5% of operating expenses, 3% of total operating budget, 1% of assets, 1.5%-4% of gross income. I'm not sure who makes these recommendations, but I'd like to know what reliable organizations with marketing expertise recommend. Can you help?
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RESPONSES

  • Posted by Peter (henna gaijin) on 8/17/2004 at 9:42 PM Accepted
    Here are a few articles on the subject.

    https://www.score.org/m_pr_11.html

    https://www.killianadvertising.com/wp10.html

    On the whole, I think you will find there is no best number that anyone can say for your business.
  • Posted by SRyan ;] on 8/18/2004 at 8:01 PM Accepted
    I've seen some SEC filings and financial reports for companies that include their breakdown of spending on marketing. I've never looked one up for a financial institution, though... but perhaps you could find similar reports filed by your COMPETITORS to do more than just set a benchmark. You should be keenly interested in seeing the difference in budgets for the whole spectrum of winners/losers in your industry.

    And of course, I can't stop myself from suggesting that you try the Search Questions link here and use the keyword "budget." I know some Q&A threads have addressed this question (but not necessarily for banking).

    ¤ Shelley ¤
  • Posted by Mushfique Manzoor on 8/19/2004 at 8:55 AM Accepted
    Hi syoder

    echoing simone, the budget depends on a lot of factors. i would a say for a Fin Inst of $2.7 billion, the marketing Budget should be at least 5% of revenue.

    then again this all depends on the market scenario. if your competitors (depending on their market share) are spending more than that percent, then you also have to match to maintain your position, if not increase.

    hope this helps

    cheers!!
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