Source: National Institutes of Child Health

and Human Development, Back to Sleep

Campaign, “Safe Sleep for Your Baby: Ten
Ways to Reduce the Risk of Sudden Infant
Death Syndrome” (n.d.), accessed October 31,
2006,
http://www.nichd.nih.gov/publications/pubs/saf
e_sleep_gen.cfm#backs.
Step 9: Budgets and Funding Sources
Step 9, the budgeting process, is “where the rubber hits
the road.” You are now ready to determine price tags for
strategies and activities that you have identified in your
plan, those you believe are key to reaching quantifiable
behavior change goals. Once this number is totaled, you
will evaluate this potential cost by referring to anticipated
benefits from targeted levels of behavior change,
comparing this with current funding levels, and, if needed,
identifying potential additional resources. This chapter
section will take you through each of these budgeting
phases.
Determining Budgets
In the commercial as well as nonprofit and public sectors,
several approaches are often cited as possibilities to
consider in determining marketing budgets.19 The
following four have the most relevance for social
marketing:
The affordable method. Budgets are based on what the
organization has available in the yearly budget or on
what has been spent in prior years. For example, a
county health department’s budget for teen pregnancy
prevention might be determined by state funds
allocated every two years for the issue, and a local
blood bank’s budget for the annual blood drive might be
established each year as a part of the organizational
budgeting process.
The competitive-parity method. In this situation,
budgets are set or considered on the basis of what
others have spent for similar efforts. For example, a
litter campaign budget might be established on the
basis of a review of media expenses from other states
that have been successful at reducing litter using mass
media campaigns.
The objective-and-task method. Budgets are established
by (a) reviewing specific objectives and quantifiable
goals, (b) identifying the tasks that must be performed
to achieve these objectives, and (c) estimating the costs
associated with performing these tasks. The total is the
preliminary budget.20 For example, the budget for a
utility’s marketing effort for recycling might be based on
estimated costs for staffing a new telephone service
center to answer questions on what can be recycled,
providing plaques for recognizing homeowner
participation, and promotional strategies, including
television ads, radio spots, statement stuffers, and
flyers. These total costs are then considered in light of
any projections of increased revenues or decreased
costs for the utility.
Cost per sale. Commercial marketers often set budgets
based on sales goals, having (what may seem to social
 marketers) the luxury of knowing what it has cost in the
past to generate leads and then convert to sales. In this
case, costs are typically those associated with
promotional activities. A company wanting to sell 5,000
more of one of their products may have historic data
indicating it takes $10 of advertising to generate one
sale, a rate meeting targeted profit margins. This metric
would be used to establish the advertising budget for
the campaign (e.g., $50,000). For social marketers, the
math is similar, with “cost per behavior” substituting for
“cost per sale.” Consider, for example, a Fish & Wildlife
campaign to increase usage of crab gauges to
determine whether or not a crab should be retained.
Program managers would, ideally through a pilot, divide
the total promotional costs for an effort by the number
of crabbers they observed, or determined, used a crab
gauge as a result of the promotional effort. Future
efforts could then use this amount to estimate budgets
for desired behavior change goals.
The most logical of these approaches, and one consistent
with our planning process, is the objective-and-task
method. In this scenario, you will identify costs related to
your marketing intervention mix strategy (product, price,
place, and promotion) as well as evaluation and monitoring
efforts. This becomes a preliminary budget, one based on
what you believe you need to do to achieve the goals
established in Step 4 of your plan. (In subsequent sections
of this chapter, we discuss options to consider when this
preliminary budget exceeds currently available funds,
including sources to explore for additional funding as well
as the potential for revising strategies and/or reducing
behavior change goals.)
A more detailed list of typical costs associated with
implementing the marketing plan are listed in the Research
Highlight of this chapter, citing examples from cases
mentioned in this text. The following brief example is
included to further illustrate the nature of identifying
strategies with budget implications. In this example,
assume a hospital has developed a draft marketing plan to
decrease the number of employees commuting to work in
single-occupant vehicles (SOVs). The campaign objective is
to influence employees to use public transportation, car
pools, or van pools or walk or bike to work, with the goal
being to decrease the number of SOVs on campus by 10%
(100 vehicles) over a 12-month period. The hospital is
motivated by a desire to build a new wing, an effort that
will require land use permits granted, in part, based on
impacts on traffic congestion in the surrounding
neighborhoods.
Product-related costs are most often associated with
producing or purchasing any accompanying tangible goods
and developing or enhancing associated services needed to
support behavior change. Costs may include direct costs
for providing these goods and services, or they may be
indirect costs, such as staff time. Product-related cost
considerations for the hospital will include the need to
lease additional vans from the county’s transit system,
install new bike racks, and construct several additional
showers for employee use if marketing goals are in fact
met. Incremental service charges as a result of increased
efforts might include costs for temporary personnel to
provide ride share matching or to build and maintain a
special online software program for ride sharing.
Price-related costs include those associated with
incentives, recognition programs, and rewards. In some
cases, they include net losses from sales of any goods and
services associated with the marketing effort. Price-related
costs for the hospital may include incentives, such as cash
incentives for carpooling, reduced rates for parking spots
close to the building, free bus passes, and occasional free
taxi rides home promised to staff if they need to stay late.
The draft plan also includes providing recognition pins for
name tags, a strategy anticipated to make members of the
program “feel good” as well as spread the word about the
program to other employees during meetings, in the
cafeteria, and the like. The hospital might also decide to
reward those who have stuck with the program for a year
with a free iPod in order to make their ride home on the
bus or in the van more pleasant and encourage others to
stick with the program.
Place-related costs involve providing new or enhanced
access or delivery channels, such as telephone centers,
online purchasing, extended hours, and new or improved
locations. There may be costs related to distribution of any
tangible goods associated with the program. In our
example, there may be costs for creating additional parking
spots for car pools close to the main entrance of the
hospital or for staffing a booth outside the cafeteria for
distributing incentives and actual ride share sign-up.
Promotion-related costs are the costs associated with
developing, producing, and disseminating communications.
Promotion-related costs for the hospital might include
developing and producing fact sheets on benefits, posters,
special brochures, and transportation fairs.
Evaluation-related costs include any planned measurement
and tracking surveys. Evaluation-related costs for the
hospital might include conducting a baseline and follow-up
survey that measures employee awareness of financial
incentives and ride share matching programs, as well as
any changes in attitudes and intentions related to
alternative transportation.
Justifying the Budget
First, consider how those in the commercial marketing
sector look at marketing budgets—it’s all about the return
on investment. We begin with a story from Kotler on
Marketing that illustrates the marketing mindset, as well as
a potential budget analysis:
 The story is told about a Hong Kong shoe manufacturer
who wonders whether a market exists for his shoes on
a remote South Pacific island. He sends an order taker
to the island who, upon cursory examination, wires
back: “The people here don’t wear shoes. There is no
market.” Not convinced, the Hong Kong shoe
manufacturer sends a salesman to the island. This
salesman wires back: “The people here don’t wear
shoes. There is a tremendous market.”
Afraid that this salesman is being carried away by the
sight of so many shoeless feet, the Hong Kong
manufacturer sends a third person, this time a
marketer. This marketing professional interviews the
tribal chief and several of the natives, and finally wires
back: “The people here don’t wear shoes. However they
have bad feet. I have shown the chief how shoes would
help his people avoid foot problems. He is enthusiastic.
He estimates that 70 percent of his people will buy the
shoes at the price of $10 a pair. We probably can sell
5,000 pairs of shoes in the first year. Our cost of
bringing the shoes to the island and setting up
distribution would amount to $6 a pair. We will clear
$20,000 in the first year, which, given our investment,
will give us a rate of return on our investment (ROI) of
20 percent, which exceeds our normal ROI of 15
percent. This is not to mention the high value of our
future earnings by entering this market. I recommend
that we go ahead.”21
As described in Chapter 15 in the section on ROI, consider
the marketing budget as an investment, one that will be
judged based on outcomes (levels of behavior change)
relative to financial inputs. Theoretically, you want to
calculate your costs for the targeted levels of behavior
change and then compare them with the potential
economic value of the behaviors influenced. The following
examples are the types of simple, but not necessarily easy,
questions you will want to answer for yourself and others:
What is it worth in terms of medical and other societal
costs for a health department to find 50 HIV-positive
men in one city as a result of their testing efforts in gay
bathhouses? How does that compare with the proposed
marketing budget of $150,000 to support this effort? Is
each “find” worth at least $3,000 ($150,000 ÷ 50)?
What is the economic value of a 2% increase in seatbelt
usage in a state? How many injuries and deaths would
be avoided, and how do savings in public emergency
and health care costs compare with a $250,000 budget
for promotional activities proposed to achieve this
increase?
How does a budget of $100,000 for a state department
of ecology to influence and support remodelers and
small contractors to post their materials on an online
exchange website compare with the value of 500 tons of
materials being diverted from the landfill the first year—
the goal in their marketing plan?
If a county’s campaign to increase spaying and
neutering of pets is anticipated to persuade 500 more
pet owners this year, compared to last year, how does a
budget of $50,000 sound? Is it worth $100 for each
“litter avoided”?
You may be surprised how grateful (even delighted)
colleagues, funders, and management will be when you
provide estimates on these returns on investment. This is
possible only when you have estimated dollars saved for a
specific behavior change; established specific, measurable,
attainable, relevant, and time-sensitive (SMART) goals for
behavior changes; developed calculated strategies to
support these goal levels; and then determined a budget
based on each marketing-related expense. In Chapter 9,
the case branded Road Crew was presented. This can be
used as an example of the ROI calculation process.