Do you have an advertising budget? If so, is it considered an expense? If you answered yes to those questions, you are letting the wrong person control your marketing.

Accountants and Marketers are notorious enemies in the corporate world. Accountants are constantly fighting to keep budget control, and Marketers keep singing the old "spend money to make money" tune.

Treating your marketing budget as an expense is completely wrong. It should be considered a form of credit line if anything. You should certainly start by setting aside an amount that is to be used for marketing. But in order to make sure that you are not shooting yourself in the foot, this amount must be allowed to replenish on its own merit as it earns money. This will allow your marketing to become self funding and it will also give you much better insight in what works, and what doesn’t.

If you run an ad, costing you $500, then that money should be taken out of your marketing/advertising budget. Just like the accountant would want you to. That’s however where the accountant is right for the last time.

If you have a $1200 advertising budget, you can afford to run a $600 ad twice if you work on a straight budget. After you’ve run it twice, you are out of money and have to stop. However, if that ad brought you $800 in profits, you are bidding for a dunce cap if you don’t run it again and again.

When that ad brings you $800 in profits, start by replenishing the marketing budget before you consider what your real income was. In essence, you made $200 but your marketing budget is back to its original level.

Should the Ad bring $500 in revenue, don’t run it again, but stick that money back into the advertising budget. "Pay" your marketing account first, and you will always be able to continue your efforts.

Doing this carries two major benefits.

1. It gives you a better understanding of your marketing ROI, Telling you which efforts are good and which are bad.
2. When done over time, it allows you to compare several ads. In other words it allows you to find the ads that are outperforming the others, tweaking your message so that you will slowly see better and better results from each ad you run.

You should end the year with the marketing budget at the same amount as you started. That will be your best indication that your advertising has justified itself.