Hi Lynny
Not sure why the emails are not getting through - try nicky@adconomy.co.nz or info@adconomy.co.nz, i emailed you a week or so ago, did you net receive that either - strange things going on in cyber space.
Now to answer your question, it would be great if people posted what proportion of their revenues they spend on advertising and promotions, as it can give you an indication of what people do. BUT, i dont like any rule saying you should spend 3% of profits, or 7% or whatever because it is competely pie in the sky kind of stuff.
You could spend 10% of your profits on a TV campaign or you could spend 0.10% on an email campaign, it is not to say which one will work better or worse than the other, it just shows that every advertising medium has a differnet price and different returns.
I have helped business to grow using only a few hundred dollars and supporting their local school newsletters and noticeboards down at the local squash clubs etc. If this works for your business and you are earning 100k a year in profit but spending $100 bucks a year on advertising then great if it works for you. Another busienss may need to spend 20k in advertising to bring in that same 100k.
Basically it all depends on the industry you are in, your specialty (or your technicoloured coat i call it - the thing that makes you stand out), and your current repuation in the eyes of your target market.
So i really would not recommend setting yourself a nation wide average spend percentage or something like that as your advertising budget. Think more of your business, and what it is going to cost you to effectively get your message to the people who need to get the message.
Hope that helps Lynny, and if you cant get through to me on email, give me a buzz 021 64 65 77.
Nicky

Hi Lynny

Nicky's advice is pretty similar to what our team would recommend, but I agree that it often helps to have a benchmark to enable you to determine whether you're overspending or underspending vs the industry average.

We work with a broad range of businesses, from multi-nationals to tiny start-ups, and the general rule of thumb we use is to allocate 6-10% of your expected annual turnover to your marketing fund each year. For a young and growing business, I would err towards the higher end of this range.

Naturally, this is only a rule of thumb. Your actual expenditure will depend very much on your industry, and the margins you operate on within that industry. However, we find this works as a pretty good average for many businesses.

The real trick though, as Nicky says, is to make sure you're spending every cent of this wisely, which is where the advice of an experienced marketer can be worth its weight in gold.

I hope this helps

Megan Denize
www.themarketingteam.co.nz