This Tuesday, corkscrews at the ready for some marketing budget advice.
Depending on your financial year or budget cycle, you are probably in budget planning for next year or maybe soon you will be. It’s a topic we discussed a few weeks ago over on the Rockstar CMO podcast, but while you are planning, have a glass of wine, as I have an analogy for you.
I live in the UK, and I’ve always heard that the more you spend on wine, you get disproportionately better wine the more you spend.
The taxation regime in the UK on alcoholic drinks, as it is in many other countries, means when you buy a bottle of wine here, the majority of what you spend goes on excise duty (like federal taxes – applied to specific products like alcohol), VAT (sales tax) and margin for the seller, only a tiny fraction goes on the wine itself.
According to this article in Decanter magazine in the UK, because of the way excise duty works, if you spend £5 on a bottle of wine, 25p goes on the wine, and if you spend £20 on a bottle, £7 is wine.
And, of course the wine is the reason we’ve made the purchase.
So, it looks like good advice: the more you spend on wine, the value of the wine increases disproportionally.
So treat yourself.
And what does this have to do with marketing budgets?
Well, aside from helping us both justify our wine budget, I think there is something similar in our marketing budgets; you get more return once you get past the tax.
Woah there, tiger, I know, comparing marketing spend to a business tax is verboten; it only encourages those that don’t value marketing as an investment and those that say things like “coloring in the department”.
But, roll with me on this, there are some things we know we need to do that don’t offer so much of a return.
There are operational costs, people and technology, including the website, CRM and all of that, that are, and I say this carefully, maybe in a whisper, the cost of doing business.
And chuck in some things that are not operational costs, but we just got to do them as they demonstrate we are a real, credible vendor in our category. A blog for the sake of having a blog, for example, or the event we’ve got to attend and sponsor as everyone else does, that sort of thing.
Then, what’s typical with a marketing budget, is there are other things being skimmed off the top too, like discretionary entertainment spend, branded merchandise for staff, HR marketing.. etc.. etc.. etc..
All good things, and valuable, don’t get me wrong – but, any budget you have after that is the real marketing budget.
The bit we can invest in campaigns, events, paid ads and all that stuff. The working cash that brings the return that will justify the rest of the spend and the reason why we go marketing.
So, increasing the marketing budget, we get disproportionately more of the good stuff.
Or, to return to my analogy.
Aside from my ongoing argument about my casual writing style and curse words with Grammarly, robots did not write any of this copy, but they did create the image, which was created with NightCafe Studio.
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I’m a 3xCMO, now a marketing strategy advisor and podcast host at Rockstar CMO. Although, I’m not a rock star, but a marketing leader, strategist, content marketer, columnist, speaker, industry watcher, and creator of ART (Awareness, Revenue, and Trust) for the companies I work with. But most of all, I am an enthusiastic tea drinker.
The half-baked thoughts shared on this blog may not reflect those of my employer or clients, and if the topic of this article is interesting or you just want to say hello please get in touch.