How do you decide how much to spend on marketing? Do you have a formal plan or is it just based on your results? How do you track your success? What has been your best investment?

Alot of questions but I thought it would provide us with some thoughts on how to make better use of our marketing dollars.

Our marketing budget comes out of our plan. We do mostly online advertising and look at our CTR and our sales and try to find the right balance and return on our investment.

We use PPC as well and we set the upper limit per day. I would suggest that you start off low and see what your results are often it takes weeks to refine the marketing programs. You will find that keywords that you did not think would do well do well and vice versa. You have to watch your click through purchase ratio to make sure you find where the break off is where you are spending enough (but not too much) to meet your sales goals.

We have a fairly limited budget most of it goes to billboard advertising and about 20% goes to discretionary spending and we are increasingly looking to go online for advertising opportunities. We usually only have about a 10% discretionary fund but we are looking to more rapidly grow our business.

We are pretty informal about our budget but if we exceed it we go over the reasons and about 2 or 3 times a year we sit down and evaluate the effectiveness of the campaigns.

Do you know which marketing avenues you are going to take (online, traditional)? A common practice is a percentage of sales, say 30%-45% depending on the industry.

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We are doing about 80% of our advertising online and about 20% offline.