It’s a new year, and you are likely to be in planning mode. If you’re working out marketing budgets for the year, have a quick read – this will give you insight into how businesses benefit from marketing in different ways, what the market suggests, advertising channels that are proving popular, a wee bit about how we compare to the rest of the world, and how to measure success.
Before jumping on the marketing bus…
All businesses are different, and depending on how your business works, you may be sales or marketing focused. Even if your business has different needs and goals, marketing is still important way to increase brand awareness, and grow your business.
Business-to-business (B2B) companies tend to be more sales focussed, and spend less on marketing, in comparison to business-to-consumer (B2C) who usually have larger marketing spends, and generate more sales through marketing.
Getting the mixture right can be challenging, and justifying marketing spend can be tricky, especially when some activities cannot be directly attributed to a sale. However, if you want to be top of mind when someone is looking to fulfill a need – being known, seen and heard is where marketing comes in handy.
What does the market suggest?
Based on our experience many small New Zealand businesses do not spend large amounts on marketing. However, the global market suggests businesses do spend 7-8% of their gross revenue on marketing and advertising. If you are new, looking to grow, or gain a larger market share, then research suggests you should spend over 10%.
Even though every business is different, there are clear trends in the allocation of marketing budget that demonstrates the importance of marketing to business success.
Marketing budgets vary by industry. For example, if you are in a highly competitive industry such as retail or consumer products, some can spend up to 20-50% of their revenue on marketing. Here’s a quick summary of what US industries look at spending on marketing:
What about New Zealand?
The New Zealand advertising standards authority released advertising figures for 2016, and we spent $2.572 billion on advertising. With Digital Advertising taking the top spot, followed by Television, and Newspapers. We can see here, digital is the space to be advertising.
According to the Neilsen Media Trends Report 2016, New Zealand consumers are engaging with media across a variety of advertising channels and devices.
Digital Advertising is gaining momentum over other advertising channels, and it is very likely, your target audiences are spending a lot of time online. Facebook, YouTube and Google dominate digital advertising, and are worth considering for your marketing plan this year.
Allocating your marketing budget to different advertising channels, entirely depends on your business, what your goals are, and where your target audiences are hanging out. The key thing here is to have engaging content that will capture your audience’s attention, no matter what advertising channel, or device they are watching it on.
Should I, or shouldn’t I?
We’re a small market in NZ – making it even more important to get your brand out there. Your target audiences should know who you are, and what you do. If you are jumping into overseas markets, investing in marketing is worth considering.
If your goals are to grow the business, or raise brand awareness, you need to be highly visible in the market. Whether it be attending events, employing a sales team, networking, advertising on Facebook, showing up in search results in Google, or appearing on TV/Newspapers.
Marketing is as much as an art, as it is a science – you cannot always measure its effect on your company’s growth, or how many sales your marketing has attributed to. However, unlike more traditional forms of advertising, digital advertising offers unique insights into the impact of your marketing. Using conversion tracking tools allow you to track actions that attribute to sales, including phone calls, emails, online purchases, and other actions.
If you need help with a marketing plan, or would like to find out more about the different digital advertising channels, and how they can help you with your goals for the year – get in touch!