Here’s how companies decide their advertising budget:
- Last year’s number plus 10%
- Some percentage of revenue (because that’s what we’ve always done)
- Whatever’s left after everyone else gets their slice
Sound familiar?
Here’s the thing: that’s not strategic planning. That’s just budgeting on autopilot.
And if you want marketing to be seen as a growth driver instead of a necessary evil on the P&L, you need a better conversation with your CFO.
The Budget Conversation You Should Be Having
At The Media Ant, we’ve worked with hundreds of brands (especially challenger brands and B2B teams) who struggle because they don’t have clean market share data. So they wing it. Or worse, they defend their budget with “trust me” instead of “here’s the math.”
What we’re sharing here is a framework that changes that conversation entirely. It’s built on Share of Voice, awareness tracking, and market reality. And yes, your CFO will actually like it.
First, Stop Thinking About Money
We know that sounds weird when we’re talking about budgets, but hear us out.
Byron Sharp and the team at Ehrenberg-Bass have shown us that brand growth comes down to two things: being easy to think of (mental availability) and easy to buy from (physical availability). The B2B Institute at LinkedIn puts it even simpler: you need to be “easy to mind” and “easy to find.”
So your budget planning shouldn’t start with a dollar amount.
Your advertising budget is just the price you pay to buy presence in people’s minds.
Two types of presence matter:
Mental Presence: When someone enters buying mode, do they think of you?
Physical Presence: When they’re ready to buy, can they find you and choose you without friction?
Here’s what trips people up: advertising builds mental presence. But distribution, your platform experience, sales enablement, pricing, product quality… those build physical presence.
Build only mental presence? You’ll be famous but will cap your growth.
Build only physical presence? You’ll be available but ignored.
You need both.
Turn The Theory Into Numbers
“Mental presence” sounds like marketing fluff until you put metrics on it.
Good news: you don’t need 20 dashboards. You need a handful of decision-grade inputs:
Mental presence signals:
- Awareness percentage (from brand tracking or Brand Lift studies)
- Branded search and direct traffic trends (shows if people are actually thinking about you)
- Consideration signals (are you making shortlists?)
Market reality signals:
- TAM (Total Addressable Market): how many people could buy from you?
- TAM growth rate: because next year’s opportunity is bigger (or smaller)
Competitive pressure signal:
- Share of Voice (SoV): your ad spend versus your top 3-4 competitors
Once you have these, the budget question becomes crystal clear:
What level of presence do we need next year, and what does that cost versus what our competitors are spending in a growing market?
Share of Voice: Your Starting Point
Here’s where the real math begins.
Share of Voice is simple:
SoV = Your ad spend ÷ (Your spend + competitors’ spend)
Why does this matter so much?
Because advertising doesn’t happen in a vacuum. Your audience isn’t just seeing your ads. They’re seeing you alongside your competitors. Mental presence is relative.
If your SoV drops, you become less visible even if your spend stayed the same. If your SoV rises, you’re buying more presence in the category conversation.
The reality: You’re not competing against your internal budget. You’re competing against what the category is spending.
SoV shows you where you stand.
Connect SoV to Awareness (This Is The Missing Link)
SoV tells you how loud you are. But the business question is: does that loudness actually translate into awareness?
Use two tools together:
Brand Tracking: shows your baseline
- Current awareness level (pick aided, unaided, or top-of-mind and stick with it)
- Trend over time
Brand Lift Studies: shows what’s working
- How much awareness moved among exposed vs. control groups
- Which creative, format, or market conditions drove the strongest lift
Tracking shows where you are. Lift studies show what actually moves the needle.
This prevents the classic mistake: assuming awareness changed because you spent money, when it might have been seasonality, a competitor pull-back, PR buzz, or channel mix.
Turn Awareness Into Real Business Numbers
Awareness percentage is just that—a percentage. But here’s how you make it real:
Aware Audience = TAM × Awareness%
And because markets grow:
TAM (next year) = TAM (this year) × (1 + growth rate)
This is critical: even maintaining the same awareness percentage might require more investment next year if your market is expanding.
The SoV ↔ Market Share Rule (And What To Do If You Don’t Have Share Data)
If you have Share of Market (SoM):
Use the classic formula: ESOV (Excess Share of Voice) = SoV − SoM
- Negative ESOV? You’re probably under-investing relative to your size
- Positive ESOV? You’re investing ahead of your current position (more likely to grow)
If you don’t have Share of Market (totally normal!):
Use Share of Awareness instead: SoA = Your Awareness% ÷ (Sum of awareness% across your competitive set)
Then: ESOA = SoV − SoA
It’s not perfect, but it’s practical when market share data isn’t accessible.
What if you don’t have awareness tracking?
Here’s where Share of Search (SoS) becomes incredibly valuable.
Share of Search is the percentage of organic branded search queries for your brand relative to all branded searches in your competitive set. Research shows an 83% correlation with market share, making it a surprisingly accurate proxy.
The big advantages of Share of Search:
Real-time data: You can pull it from Google Trends for free, right now.
Faster than tracking: Updates continuously instead of waiting for quarterly brand studies.
Shows actual intent: It sits between brand salience and consideration, capturing people actively looking for solutions, not just claimed awareness.
Quick example: If PayPilot gets 500 monthly branded searches and the competitive set totals 10,000 searches, PayPilot’s Share of Search is 5%. Compare this to your SoV (also 5% in our example) to see if your paid presence is generating proportional organic interest. If your SoV is 8% but your SoS is only 3%, that’s a signal your advertising isn’t translating into brand pull.
Let’s Make This Real: A Worked Example
Let us walk you through a fictional scenario with real math.
We’re planning for a fictitious B2B category: HR Payroll SaaS for Indian SMBs.
The Players
Our brand: PayPilot
Competitors: HireHalo, SalaryStack, WorkWave
Last Year’s Ad Spend (₹ Cr)
- PayPilot: ₹10 Cr
- HireHalo: ₹60 Cr
- SalaryStack: ₹80 Cr
- WorkWave: ₹50 Cr
Total category spend (competitive set) = ₹200 Cr
Step A: Calculate Last Year’s SoV
SoV = Brand spend ÷ Total category spend
PayPilot SoV = 10 ÷ 200 = 5%
Step B: Awareness Baseline from Brand Tracking
PayPilot runs brand tracking quarterly and sees:
- Aided awareness (current): 12% among SMB decision makers
- Category TAM this year: 25 million decision makers
So current aware audience:
Aware audience = TAM × Awareness% = 25M × 12% = 3.0M people
Step C: Use Brand Lift Studies to Connect “More Presence” to “Awareness Movement”
Last year, PayPilot ran 2 major campaigns and measured lift using Brand Lift Studies:
Campaign 1 (Q2):
- Spend: ₹4 Cr
- Temporary SoV during campaign months: ~6%
- Awareness lift measured (exposed vs control): +0.6 percentage points
Campaign 2 (Q4):
- Spend: ₹6 Cr
- Temporary SoV during campaign months: ~8%
- Awareness lift measured: +1.1 percentage points
Now we have a practical calibration:
- At ~6% SoV gives about +0.6pp lift
- At ~8% SoV gives about +1.1pp lift
This tells us something useful:
For PayPilot, increasing SoV by ~2 points (6% to 8%) is associated with roughly +0.5pp additional awareness lift (assuming creative quality and targeting consistency remain constant).
This is why Brand Lift Studies matter: they give brands a real-world “response curve” instead of guessing.
Step D: Set Next Year’s Awareness Goal and Account for TAM Growth
Leadership goal: Move aided awareness from 12% to 16% next year. That’s a +4pp awareness increase.
Also, the category TAM is growing at 10% YoY.
So next year TAM: TAM (next year) = 25M × 1.10 = 27.5M
Target aware audience next year: Aware audience target = 27.5M × 16% = 4.4M people
Today we’re at 3.0M. Target is 4.4M.
That’s an increase of +1.4M more people aware of PayPilot next year.
Step E: Convert Awareness Goal into Required SoV and Next Year’s Spend
From last year’s Brand Lift calibration:
- A “strong” burst at ~8% SoV gave ~+1.1pp lift
- We need +4pp over the year
So a reasonable plan is:
- 3 to 4 strong bursts OR an always-on layer + 3 bursts
- That generally requires higher annual SoV than 5%
Let’s decide a target:
- Defensive brands stay near SoV ≈ current SoM/SoA
- Growth brands plan for higher SoV
For PayPilot, we set next year SoV target to 8% (up from 5%) to fund consistent presence plus strong bursts.
Now apply the category spend inflation. Suppose category ad spend is expected to grow 15% next year.
Category spend next year: ₹200 Cr × 1.15 = ₹230 Cr
So PayPilot’s next year budget becomes:
Budget = Target SoV × Category spend (next year)
= 8% × ₹230 Cr = ₹18.4 Cr
The Answer
PayPilot should plan ~₹18-19 Cr next year (vs ₹10 Cr last year)
And we can also show the “ambition bands”:
- 7% SoV gives you ₹16.1 Cr
- 8% SoV gives you ₹18.4 Cr
- 10% SoV gives you ₹23.0 Cr
This makes it CFO-friendly because it’s not one magical number. It’s a set of defensible scenarios tied to competitive reality and market dynamics.
Where Finance Actually Fits
Budget planning is always a balance between ambition and affordability.
But instead of starting with “How much can we afford?”, we recommend starting with:
- What awareness level do we need to be meaningfully considered?
- What’s the highest awareness target finance can comfortably support?
Once you agree on that target, everything else becomes structured:
- Awareness target to Aware audience (via TAM)
- Required presence to Target SoV (vs. competitors)
- Target SoV to Next year’s spend (accounting for category inflation)
This is how marketing leads the conversation.
Finance defines the constraint. Marketing defines the awareness outcome that’s fundable within that constraint.
Make It Executable
Most winning plans split the budget like this:
Annual budget = Always-on + Bursts
- Always-on prevents decay (you lose mental presence faster than you think)
- Bursts win peak windows, launches, and high-intent moments
Final Thought
If the goal is growth, your ad budget shouldn’t start as “5% of revenue” or “last year plus 10%.”
It should start as a presence decision:
- What mental and physical presence do we need next year?
- What Share of Voice gets us that presence versus our competitors?
- What does that cost in an expanding market?
That’s a budget conversation both marketing and finance can stand behind.
Because it’s not a guess. It’s a plan.
At The Media Ant, we help brands turn this framework into reality. Whether you’re a challenger brand fighting for visibility or a B2B team trying to justify next year’s spend, we’ve seen what works when you connect competitive intelligence, market dynamics, and awareness goals into one defensible story.
What’s your experience with budget planning? Are you still fighting for budget with gut feel, or have you found frameworks that actually work? Would love to hear what’s landed with your CFO.
Key Assumptions and Caveats
This framework is grounded in marketing science (Ehrenberg-Bass, ESOV studies) but relies on approximations that should be calibrated to your category:
Metrics and Calculations
Relationships between spend, Share of Voice (SoV), and awareness are planning heuristics, not precise laws. Links can vary by creative quality, channel mix, targeting, and competitive activity. Always refine with your historical Brand Lift and tracking data.
Share of Awareness Proxy
Share of Awareness (SoA) as a stand-in for Share of Market (SoM) works in stable categories but may break down in:
- B2B/high-consideration buys (awareness ≠ sales due to long cycles).
- Price-driven/commoditized markets (low-awareness brands win on cost).
- Fragmenting categories (new entrants dilute awareness).
- Poor creative/targeting (high SoV yields low lift).
ESOA is a practical workaround when SoM data is unavailable—prioritize sales share when possible.
Response Curve and Goals
Awareness lift estimates (e.g., from 2 campaign data points) assume linearity and consistent execution. Real curves often show diminishing returns at high SoV/GRP levels. Test incrementality (lift per ₹) regularly.
Competitive Dynamics
Targets like “defensive SoV ≈ SoM/SoA; growth > SoM/SoA” are directional. Actuals depend on category inflation and competitor reactions—monitor and iterate quarterly.
