Marketing is a very important part of business management. However, many business owners are not very familiar with the best practices of fund allocation for marketing. Therefore, they end up spending a major portion of their funds on marketing programs that do not bring in many returns. This article discusses the best fund allocation practices concerning marketing.

Marketing Budget

A marketing budget is the most important aspect of fund allocation for marketing. Ideally, 10% of the revenues generated by your business should be set aside for marketing. You also need to keep in mind the following while allocating a marketing budget.

Marketing Budget: Tips

While allocating funds for marketing, you must consider the following:

Measure marketing activities in dollars.

The marketing allocation needs to be 1-10 percent of total sales for B2B operations in the first year, when business is just picking up. In the second and third year, the funds allocated for marketing should be lowered.

Instead of basing your marketing budget solely on a percentage of your turnover, try to allocate as much funds as your competitors put in for their marketing programs.

If you have a startup business, then you need to spend a major share of funds for your business on marketing.

An advertising war could mean all-out business losses, so try not to overdo the competition.
Keep in mind the goals of the advertising program.

Let us go more into the details of fund allocation methods based on competition as well as revenues generated.

Kinds Of Allocation Of Funds For Marketing

Fixed Advertising Budget

Simply put, the marketing budget is a fixed percentage of revenues generated by the business. This is a safe funding method, since you need not up the ante every time your competitor decides to allocate more funds for their marketing campaign.


You can try to match the advertising budget of your competitors. This kind of marketing benefits all players, as the market is evenly distributed among the competitors.


Funds allocation for marketing depends on what the advertising campaign aims to accomplish. The goals could be to increase the number of queries from potential customers, increase in brand visibility, or increase in sales volumes.


Funds for marketing are allotted only after all other aspects of the business have been considered on the budget. This approach is the least efficient way of allocating funds for marketing and can harm your business in the end by giving your competitors the edge.

The simple tips outlined above can help you allocate the right amount of funds for your marketing campaign. You should also target the right aspects of the marketing campaign, as this will enhance the effectiveness of the program.