How much does Marketing cost?
A lot of people want to know and always ask us “how much does marketing cost?”
Well, a lot of experts out there say 7-10% of your revenue should be spent on marketing and advertising. And whilst that’s a good but very rough guide, I don’t believe the answer is that easy. And that’s especially the case if you are a mid-sized business. It is easy for massive companies to throw millions if not billions at ad campaigns known as ‘branding’ to reinforce their brand. It’s easy because they have the revenue coming in so they, therefore, have the budget to spend.
This of course is a form of traditional ‘outbound’ marketing. Often it is ego driven and because we have grown up seeing this type of advertising and/or marketing from these big companies like Coca-Cola, Nike, Mcdonalds, and more, we think this is what we have to do to get our name ‘out there’.
But the traditional outbound – or scattergun approach is not sustainable for small and medium businesses – not even in the short term. So if you’re still advertising on the radio or in the newspaper, STOP!
There’s a better way. You need to stop throwing your hard-earned money away on marketing and/or advertising that is nothing more than an expense… Small and medium businesses need to adopt an Inbound marketing philosophy.
How much does Inbound Marketing Cost?
At the end of the day, it depends on a variety of factors… It depends somewhat on the size of your business, your customers (target market), and your goals.
But most importantly – how can you measure the returns or ROI? And even more so what do the returns look like? If you could buy a $100 note for $20 – how many would you buy? As many as you could afford right? So if your marketing and advertising can return 5x what it costs – is it still a cost? NO! it’s an investment. So the question should be how much should you invest in marketing!
How much should you spend on Marketing?
It is easy to for me to sit here and say (well write) that you should spend X amount and marketing cost should be $1000 or $5000 per month… But it is too subjective to give a definitive figure. Much like the analogy above where you could buy $100 for $20 it depends on what you have to spend, upfront and ongoing. What you need to also weigh up is whether can you afford to pay an expert and sustain the investment until it starts to pay off. In general terms, it’s best to start the investment smaller and grow it once you can get the right data to see what actually works best – and what doesn’t.
Without a purpose, or strategy thought you’re essentially driving along with a blindfold. So the first place to start is with a plan. A Roadmap. At back9 we offer a simple digital marketing roadmap, that helps clients define their audience and their goals. A roadmap helps you see the destination, which gives you direction. Then all you need is the drive to get there.
Our digital marketing roadmap is 1495 + GST and is eligible for up to 50% government funding in NZ.
Good Marketing Costs you nothing!
Whilst of course nothing in business is guaranteed, If you have a good product or a good business model, then there’s no real reason why marketing and/or advertising should be a cost. Good marketing is and should be measurable, and therefore it should also pay for itself. And if it pays for itself, it is an investment. Knowing what to measure and how to do that is a little more complicated, and may require working with a marketing expert if you want to reach your full potential. How do you choose the right marketing agency for your business? Well good old-fashioned research, Choose someone you connect with and share values with. Someone with proven results too.