5 Tips for Planning Your Distributed Organization’s Marketing Budget

November 6, 2014 Deb Griffith

distributed marketing budget

This is the season of football, leaf watching, trick or treating and for most marketers, wrapping up your marketing plan and budget for 2015.  This can be quite the challenge nowadays with the media and marketing landscape changing constantly. And if you are a distributed organization?  Even more complicated.  Hang tight -- there are a few things you should keep in mind when creating your marketing budget and plan for 2015:

  1. Setting Your Marketing Budget Amount

Do you know the right number that you have to work with? 10% of your company’s revenue is the general rule for assigning a marketing budget.  As a B2C company, that number trends higher -- between 6% and 12% -- while B2B companies range a little lower, from 2% to 6%.  

Questions to ask yourself:  

  • Are you staying current with your annual revenues to know how much you should be planning for? If not, get cozy with your CFO.
  • What is the commitment level from your Executive Team/Company Leadership? Do they like to maximize marketing as part of the overall business strategy, or do you need to reign in spending to allow for other expenses?
  1. Determine the Best Allocation of Spend Between Brand Promotion and Channel Support 

The standard split of your marketing budget between your brand activities and those that support your local distributors can vary, but according to a recent study, more than three-quarters of brands spend 25% or less of their budget on distributed marketing support.  

Considering that in some industries 80% of sales take place locally, you might want to make sure that you are creating robust marketing assets and allocating enough to drive sales to your channel partners.  

Questions to ask yourself:

  • What are the factors you use to determine your split?  How much of your sales happen locally?  
  • Are you a consumer brand?  If so, your brand strength might already be enough, and your best play could be driving traffic to your channel partners. 
  • Have you created a variety of local marketing campaigns that cover the majority of pain points your partners have?  If not, allocating local funds might be a waste of money.
  1. Use a Co-op Fund Management System that Automates and Tracks Local Spend 

This is key if you want to have an easy life.  Anyone that has tried to manage and reconcile co-op or MDF funds manually will tell you thats it’s time-consuming, complicated, and frequently wrong.  

But solving those headaches is just a happy by-product of the real benefit.  By moving the management of your co-op funds to an automated platform, you’ll have real-time information on your balances and can make adjustments to maximize those dollars throughout the year.  No more setting funds aside for programs that end up going unused!

Questions to ask yourself:

  • Do you have co-op funds that you allocate annually that end up unspent?
  • How effective is your co-op marketing program?  Do you have lots of adoption? 
  • Are there lessons you could learn about your marketing and co-op allocations if you could view the dollars spent in a snapshot view or compared from one campaign to the next?
  1. Research New Marketing Channels! Traditional or Digital: What’s Your Split?

Are you trending towards more digital advertising now?  The average split is 70% to traditional and 30% to digital -- with more shifting to digital year over year.  

If you aren’t increasing that digital allocation, you might be missing out on new marketing technologies that yield better results than traditional advertising. This isn’t a one-size-fits-all approach, but dabbling with some emerging digital advertising vehicles just might be a secret weapon for new lead generation.  Be sure to set aside some resources to try out some of these.

Questions to ask yourself:

  • How much did you spend in 2014 on digital vs traditional advertising?
  • How many new digital marketing advertising activities have you tried for your channel partners?
  • Are your channel partners asking for digital marketing to drive their local success?

Note:  Automation again will be the key here for a distributed organization, so that you can manage multiple localized campaigns through these digital services and not go crazy.  

5.  Have you Adjusted your Balance of Creative Production vs Media Placement ?

Another new trend is a significant shift in the split from the cost for creating advertising vs the cost to place it, as its now at about 50/50.  

Traditionally, 10% of a marketing budget went to creation and 90% to media placement.  But now it’s much easier to produce new creative, and placement is much cheaper, especially for digital use.

Questions to ask yourself:

  • Have you reevaluated how much you are spending on each of these lately?  Where were you 5 years ago? 3? last year?
  • If you are adding more digital advertising placement to your mix, are you supporting it with enough varied or localized creative?

It’s never an easy task to create a budget and action plan -- especially when the current marketing landscape is so volatile.  But staying on top of these emerging trends will help keep the plan for your distributed organization on the leading edge of your industry and can make you a Marketing Superhero!

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Co-op Funds Management
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Follow these 5 tips to make sure your distributed organization develops a marketing budget that will grow your business in 2015.

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