Marketing back on the menu, apparently

Rumour has it the at one of the biggest, if not the biggest, global sportswear manufacturers based in the US spends $1.5bn per year on marketing, promotion and sponsorship. They are a listed company, so it’s pretty safe to assume that the shareholders won’t be picking up the tab. The budget for this is generated through growth in sales; i.e., anyone who has bought into the brand. Cool, eh? All that promotion paid for by someone else. This is what happens when you look at marketing as an investment rather than a necessary evil (or unnecessary evil to some businesses that I’ve met in the past). For a marketing organisation whose raison d'etre is to deliver on the investment, you can imagine the frustration in trying to communicate with the ‘unnecessary evil’ camp.

All is far from lost, it would appear. Despite our being able to provide specialists across the whole spectrum of marketing disciplines, the area where we are seeing the biggest increase in activity is the strategic one: ‘how?’ is the increasingly asked question, and particularly encouraging given that our client base is mainly from the much neglected SME area, it would appear that even the small businesses are starting to ‘get’ marketing.

Now, it is not for us to know, or even speculate how ambitious a particular client is, how much they want to grow, how quickly, or even if at all. However, I've yet to meet a client in any market that wouldn't like to increase sales/profitability, any more than I’ve met a client who is complaining that they are earning too much.

For the record, and for all you small to medium companies for whom global domination is not necessarily the ambition, here is an insight into the typical mind set for an ambitious US company in, say, the IT software arena that is. The CFO – Financial Director if you are this side of the pond – will typically allocate 10% of the previous year’s turnover to the marketing department. Not profit; turnover. If they need any more, they would have to give a very good reason for any budget increase, but the point is, it wouldn't be out of the question. Now have a look at what you turned over last year, and how much you allocated to marketing this year. Clearly, the bulk of you don’t want global domination, and if you don’t, then this level of expenditure is clearly excessive, but you catch my drift, no doubt. At a guess you probably want the same as us; good, strong sustainable growth and some encouragement for your efforts in the shape of your company’s bank balance. One question, though: how do you sell to potential customers if they don’t know that you've anything to sell to them?