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Marketing Budget: How much should we spend on-line versus off-line?

A study by Spot shows that the Internet accounts for 28% (80 minutes per day) of the media consumption in the Netherlands. The rest (72%) is spent on off-line media like TV, magazines and newspapers. Marketers should allocate a similar amount (28%) to Internet campaigns.

When you make a marketing & advertising budget for a start-up business, one of the more difficult questions to answer is: how much should I spend on-line versus off-line? For businesses for which the Internet plays a crucial role, a logical split is that branding is best done off-line and conversion is done on-line. One of the things that keeps me busy is: is there a rule of thumb to make this split?

One approach is to calculate the required budget for on-line conversions like ‘generate number of leads’ or ‘xxxx amount of sales’.  Unfortunately, to calculate and measure the outcome of off-line branding efforts is more difficult.

To make things a little easier an alternative rule of thumb can be applied. The Internet accounts for 28% (80 minutes per day) of the media consumption in the Netherlands. The rest (72%) is spent on off-line media like TV, magazine and newspapers.  Let’s apply these facts to the marketing and advertising budget as well: 28% on-line, 72% off-line.

Off course there are factors that influence this rule of thumb:

  1. Target group: the younger your target group, the more you should spend on-line;
  2. Product category and the role of the Internet in your sales process: for some products categories the web plays a crucial role in the sales process for instance for books, eletronics, holidays and homes. The more important this role the higher the on-line budget.

I will update this post as soon as a better method of budget allocation is available.

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