Sexy Little Numbers by Dimitri Maex

Author:Dimitri Maex [Maex, Dimitri]
Language: eng
Format: epub
ISBN: 978-0-307-88836-5
Publisher: Crown Publishing Group
Published: 2012-09-03T16:00:00+00:00

And nothing much has changed over the last thirty years. Most marketers just pick one of the fifteen methods listed above, with the research showing—and my own experience confirms this—that marketing as a percentage of sales is the most popular approach. I am often surprised by how frequently simple, crude, and not very accurate rules like these are used by some of the biggest companies in the world to make decisions on how to create huge advertising budgets.

There are more scientific methods, such as the last two in Harry Henry’s list. And the funny thing is, most have been around for decades. However, companies seem to struggle to incorporate them in the decision making process. Science is often seen as a black box—too hard to understand. As a result, I have even seen companies that invest heavily in science to create their products—such as the pharmaceutical industry—revert to very basic rules, such as advertising as a percentage of sales, when the actual marketing budgeting decisions were being made. This is a real shame. The fact that rules such as advertising as a percentage of sales are easier to explain doesn’t mean they are better for decision making. And it certainly doesn’t mean that they should replace more scientific approaches.

There is no single best approach to budget setting. But let’s look at a few of the best. We’ll begin by looking at spend/get curves.

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