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How much do I need to spend to increase my brand health?

This is a great question. It’s really the holy grail question that Tracksuit is aiming to solve as we collect more data: being able to quantify the amount of investment needed for a desired change in brand health.

The longer answer is that it really depends on a number of factors. And smaller budgeted companies capture market share from bigger budgeted companies all the time! So there are definitely ways to grow despite having smaller budgets.

Here are a few things to consider:

Marketing Effectiveness

You can spend a lot on a campaign that isn’t effective, or spend less and see huge growth in awareness.

It depends how clever / exciting / creative / viral your marketing is.

Spending across the category + share of mind:

Awareness measures the share of mind that your brand holds, and that takes into account the spending and activity of other brands in the category.

It reflects whether you are capturing more of your consumers’ mental availability than other brands.

  • If you operate in a category where other brands are not investing in brand-building, your awareness campaigns will stand-out and you’re likely to see a greater ROI on your spend.

  • The opposite is true for categories that are highly competitive with many brands investing in awareness.

Category norms and movements

Some categories are full of big-budget players. Others have a mix.

Sometimes, awareness will improve with relatively less spending. You might see this in a category where there is a lot of PR and mainstream media attention.

Mature categories will generally need greater investment to shift the needle.

Also, categories grow and shrink themselves — so any change in awareness can be impacted by whether your category size is shifting. This is particularly true during large macro events like a recession or COVID.

Suggested allocation of budget

Many of our brands have annual marketing budgets of between $1m – $5m.

This split of brand to conversion can change between categories.

We have attached a report called Effectiveness in Context that describes some of the category differences here.

It includes points on things such as how leading brands need to spend more on brand building to maintain their leadership position.

In the Effectiveness in Context report, they even address the question of budgets directly:

  • "When comparing subgroups of campaigns with differing relative budget levels, it is clearly important to take budget into account. Previous research has shown that share of voice (SOV) is a more relevant measure than absolute spend. An even better measure is the difference between SOV and market share, referred to in this report as ‘extra share of voice’ (ESOV). ESOV is an important determinant of how fast a brand can grow.”

In other words:

  • If you invest $50k in a competitive category (where your share of voice is low), you might see very little return.

  • In other categories, if your share of voice is high, you might see higher growth in awareness for the same level of investment.

Effectiveness In Context.pdf
23.8 MB