When it comes to promoting your business, you need two budgets — one for advertising, and one for your communications and PR.
The first covers what you spend on print, radio/TV and web or multimedia advertising during the fiscal year.
The second covers the creative and production costs of material such as customer newsletters, advertorials, brochures, letterhead and business cards, sales letters, news and product releases, direct mail packages, company profiles and website copy. These constitute marketing communications.
Establishing a marketing communications budget is essential. If for example, you decide to have a customer newsletter produced, you first need to know how much it’s going to cost, and whether you can afford it.
A newsletter can cost several hundred to several thousand dollars per issue. You don’t want to find out later that your newsletter blew your whole budget, leaving nothing for the new brochure and the two advertorials you had planned.
How much should your marketing communications budget be? That depends on your bottom line. Plan the communications projects you want to produce over the year, and work out the costs. Once you’ve done that, it’s a good idea to add an extra 20% as a safety net.
Dollars work better than percentages
Working out a dollar figure is better than allotting a percentage of your available budget. Thirty percent of $250,000 is $75,000 for example, but it’s only $7,500 if your budget is $25,000.
Having a budget is especially important if you contract out professional writing, communications and design services, to make your communications look professional and get your message across effectively.
When I quote a project, my first question is, Can you tell me your budget for this project?
Writers, designers and media relations/PR consultants are professional service providers who charge set fees just as your lawyer and accountant do. Different consultants charge different rates for the same projects.
Three important things
Informing your communications services provider of your budget accomplishes three important things.
First, it helps you both decide whether you can afford the services, what can be done within your budget and whether there is a possibility of establishing a long-term supplier-client relationship, which can make taking the project at a lower rate possible.
Second, it helps avoid conflicts over fees or invoices.
Third, it gives you the ability to find a provider within your budget.
Plan your budget around project-based or retainer payments rather than hourly based fees. If you’re charged hourly, and a project takes longer than expected, you may find your budget eaten up. Not a good situation for your budget or the relationship.With project- and retainer-based fees you know exactly how much you’re paying for the project, or every month.
Can you afford a big agency, or should you contract with an independent consultant. Independent consultants often partner with others providing related services and can often manage the entire project from concept to completion.
Establishing a communications budget also will help you distinguish between needs and wants. You may need a new capabilities brochure, but you may find the newsletter you want to produce will have to wait.
by Dean Askin
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