The 70/20/10 Rule That Keeps Your Marketing Budget Fresh
An effective strategy to keep your marketing budget dynamic.
1Why Marketing Budgets Go Stale
Most marketing budgets are set once and forgotten. Companies allocate funds to the same channels used the previous year and review results in December. By then, the market has shifted, top channels have become more expensive, and new ideas remain unfunded. This approach leads to a stale budget and missed growth opportunities.
2Budgeting Process
The first step in creating a marketing budget is determining the total spend. A recommended starting point is 10% of projected gross sales for the upcoming year. This percentage is higher than the 7-8% suggested by the U.S. Small Business Administration and is suitable for growth-focused companies. The budget should be based on future goals, not past revenues.
3What is the 70/20/10 Rule?
The budget is divided into three categories: 70% to proven channels, 20% to promising channels, and 10% to new experiments. The 70% portion is allocated to reliable, customer-generating channels. This portion forms the foundation of the business and must be protected. The 20% portion is allocated to channels showing potential but not yet fully proven.
470%: Proven Channels
The 70% budget is allocated to the most effective and reliable marketing channels. For example, Google Ads might be a steady customer generator for a home-services company. This channel should be fully funded and protected as it forms the core revenue stream. This portion provides the financial foundation for exploring other channels.
520%: Promising Channels
The 20% budget is allocated to channels that show potential but are not yet fully proven. For instance, a small test on a new social media platform might yield positive results, justifying further investment. This portion keeps the budget dynamic and supports the discovery of future successful channels.
610%: New Experiments
The 10% budget is allocated to entirely new and untested ideas. This portion is used for new ad formats, platforms, or creative concepts. Most of these experiments may fail, but that is expected. This portion allows the business to explore innovative ideas and evaluate future opportunities.
7Keeping the Budget Dynamic
The 70/20/10 rule ensures the marketing budget remains dynamic and flexible. While proven channels are protected, new opportunities are explored, creating a pipeline for future success. This approach enables the business to quickly adapt to market changes and gain a competitive edge.
8Conclusion and Recommendations
The 70/20/10 rule is a powerful strategy for effectively managing a marketing budget. It allows businesses to protect existing successes while exploring new opportunities. The budget should focus on future goals and be managed dynamically. This approach ensures long-term growth and competitive advantage.
Original article: Entrepreneur – Latest — Pazarlama Bütçenizi Taze Tutmanın 70/20/10 Kuralı