Budgeting for IMC: setting the total and splitting it

Every integrated plan has to answer two money questions: how much in total, and how to split it. Neither has a formula that works everywhere, but both have a body of evidence that rules out the worst answers.

• Setting the total. The common methods are objective and task (cost what the objectives need), a percentage of sales, competitive parity (spend in line with rivals), share-of-voice targets, and "what we can afford". Surveys find managers mix analysis with rules of thumb¹².
• Share of voice. A brand's share of category advertising, compared with its share of market, is a long-standing guide to whether it is investing for growth or harvesting⁴.
• Brand and activation. Les Binet and Peter Field's work for the IPA put the average best split for consumer brands at about 60:40 in favour of brand building⁸, with different answers by category and for B2B¹⁰¹².
• Disciplines and "non-working" spend. Split the total by the job each discipline does in the journey, and budget production, research and measurement on purpose¹⁴¹⁵.

Five methods, used alone or together:

The research on how budgets are really set is humbling. A survey of UK advertisers found that judgement-based methods dominate, above all "what is affordable", although objective-and-task and return-on-investment methods were also well represented; whether a firm used the more sophisticated methods was largely a matter of organisational culture². Depth interviews with brand managers in multi-brand companies concluded that funds should follow forward-looking objectives rather than historical precedent³. A 2020 study in the Journal of Marketing Research broke the budget decision into baseline spending, adaptive experimentation, the advertising-to-sales ratio and competitive parity, and found, across eight brands, decision-making best described as boundedly rational: part analysis, part habit¹.

John Philip Jones made a related point in the Harvard Business Review in 1990: budgeting accuracy suffered because budgets were tied to sales through a per-case rate, when a better guide was to compare a brand's market share with its share of voice⁴.

How an objective-and-task build-up works

1. Start from the communication objectives, each with an audience and a deadline.
2. Size the audience: how many people in the category the plan must reach, and how often, for the change to be plausible.
3. Choose the tasks: which disciplines and assets will carry the message to them, and which will convert the interest it creates.
4. Cost each task: media, production, people, tools, research.
5. Add the measurement needed to know whether it worked.
6. Compare the sum with the checks below, and decide consciously where to cut or where to raise the ambition.

The method is only as good as the assumptions in step 2 and step 3, which is why they should be written down and tested against results.

A sound practice is therefore to build up (objective and task, using the objectives from objectives and KPIs), then check against share of voice, against past results and against what the business can bear, and to write down the assumptions so they can be tested.

Share of voice (SOV) is a brand's share of all advertising in its category; share of market (SOM) is its share of category sales. Excess share of voice (ESOV) is the gap between the two. See the glossary entry for share of voice.

Jones described brands whose voice is louder than their market share as "investing", typical of new brands, and established brands that keep their voice low while enjoying a larger share as "profit taking"⁴. Binet and Field later turned the relationship into a widely quoted rule of thumb from IPA cases: on average, brands with positive ESOV tend to grow, by roughly half a point of market share a year for every ten points of excess share of voice⁵.

Treat the rule with care. An IPA essay calls ESOV a single-factor model applied to a multi-factor problem, and notes that it is getting harder to calculate because reliable data on competitors' digital spend is scarce⁶. Mark Ritson has argued in Marketing Week that share of search, a brand's share of category searches, should replace share of voice as the tracking measure⁷. Use ESOV to frame the ambition ("are we spending like a brand that intends to grow?"), not to compute a budget to the dollar.

Brand building creates memory structures and preference that pay back over months and years; activation prompts people who are ready to act now. Binet and Field found that the two work best together, and that integrating them beats either alone¹⁷.

The IPA's ten-year review puts the optimum at 60:40 between brand building and activation in The Long and the Short of It, and at 62:38 in the later Effectiveness in Context⁸, a 2018 study of how the rules change with a brand's circumstances⁹. Context moves the number: Ritson, summarising Binet and Field, gives 80:20 for financial services, where customers switch providers rarely¹⁰.

B2B is different again. Binet and Field's 5 Principles of Growth in B2B Marketing, published by LinkedIn's B2B Institute¹¹, found the best-performing B2B split closer to 46:54, slightly in favour of activation¹². The Ehrenberg-Bass Institute's John Dawes added the "95:5 rule": at any one time only a small minority of business buyers are in the market, for example about 5% a quarter in a category where firms switch supplier roughly every five years, so most communication has to reach people who will buy later; Dawes stressed that the exact figures depend on each category's purchase cycle¹³.

Once the total and the brand–activation balance are set, divide the money by the job each discipline does for the objectives and the journey (see touchpoints and the journey): broad reach for memory (TV, online video, out-of-home, sponsorship), credibility (public relations, influencers), capture of demand (search), and relationship and retention (email, CRM and loyalty). Keep a small, named test budget so the split can learn.

The same logic applies across markets. A brand entering a new country is, in Jones's terms, investing there even if it is harvesting at home, so a single global percentage rarely fits every market. Set the split per market from that market's objectives, and keep the shared assets (the brand platform, the core creative idea, the measurement plan) funded centrally so that every market benefits from them.

Then the line items that are not media. Many marketers still track a working to non-working ratio, where "working" is the money that distributes content (paid media) and "non-working" is everything that produces it; an ANA paper notes that most clients define the two differently¹⁴. Another paper published by the ANA argues that no preset ratio works and proposes replacing it with "deploy and develop" allocations¹⁵, and a Campaign columnist calls the phrase itself misleading, because the "non-working" share pays for the ideas and assets that make media work¹⁶.

The practical answer: budget production, research, measurement and technology as their own lines, each with a job, and judge them by the outcomes they enable rather than as a share of media.

1. Start from the objectives and costed tasks; write the assumptions next to each line.
2. Check the total three ways: share of voice against share of market, last period's results, and what the business can afford.
3. Choose a brand–activation balance from the evidence for your category and model (consumer, financial services, B2B), and record why.
4. Split by discipline according to the job each does in the journey; keep a named test budget.
5. Give production, research and measurement their own lines and owners.
6. Track share of voice or share of search as a leading indicator, and review the split each quarter against measured effects.
7. Protect the brand share when cuts come, and write down what a cut is expected to cost later.

• Binet and Field's ten principles¹⁷, the IPA's ten-year review⁸ and Effectiveness in Context⁹.
• 5 Principles of Growth in B2B Marketing¹¹ and the 95:5 rule¹³.
• John Philip Jones on share of voice⁴, with the IPA's critique of ESOV⁶.
• On IMC Institute: objectives and KPIs, planning frameworks, and the objective hub for measurement.