That interesting question is at the core of our mission at Permanent Campaigns Consulting. We think the number should be much higher than what most agencies are spending today! But we don’t know what percentage of the budget most agencies are spending now (though I suspect it’s rather low), and we believe the return on investment in terms of revenue from fare sales and political support justifies a higher investment in marketing and communications.But what percentage is right?Well, the City of Calgary recently grappled with this question and Cindy Pickett, the city’s Director of Customer Service and Communications, had this interesting point in the Calgary Sun:
“If you go to a company that spends on marketing and communications, they range between three and 11 per cent spent on their targeted revenues,” said Pickett.
So…since revenues are usually about half the agency budget (the other half comes from taxpayer support), does somewhere between 1.5 and 5.5 percent of the agency budget to spend on marketing and communication sound about right? Seems right to me. For an agency like the Chicago Transit Authority with approximately a billion dollar annual budget (give or take), that’s about $15M to $55M annually on marketing and communications. For a much smaller agency with an annual budget of $20M, that would be $300,000 to $1,100,000 spent on marketing.Does that seem reasonable? Sure seems like any growth-oriented business would budget that way.
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