How Much Should I Spend on Marketing?
Contributor Phil Robinson. Partner, Founder + CE
How much should I spend on marketing is a pretty common question we get asked. And it’s a fair question. But like anything in the marketing world, it’s like asking: How much does a good logo cost? Or How much does a website cost?
The short answer is… It depends… Not very definitive is it? It depends on what your goals and budget are and whether you see marketing as an investment or a cost. Fortunately, there are some guidelines that can help you decide.
What do the experts say?
While there is no hard and fast answer about how much to spend on marketing, there are some guidelines and general rules of thumb that can help you make the decision about what’s best for you.
Well how about this. According to figures from a recent CMO survey published in February 2021, across all industries the spend averaged 8.9% of revenue on marketing. In theory, this money spent should generate more revenue. When it’s done right, it’s money well-spent.
Finding the sweet spot for spending can be a challenge though. Ultimately it comes down to what you believe the purpose of marketing to be. And if you see it as an expense or an Investment.
Marketing is an Investment
The important thing is to see any marketing spend as an Investment. Not an expense or cost.
Sometimes investments return a lot, sometimes they return a little. Sometimes investments return nothing and sometimes they end up losing you money. However, if you look at any long-term investment, whilst there are always peaks and troughs. In the long run, if you understand what you are trying to achieve, monitor and measure results, and adapt when necessary, most of the time you will see a good ROI.
Marketing is no different. If you define really good SMART objectives, it is much easier to put measures into place to get to the destination.
If you’re throwing money at various activities with no real plan or direction, and not measuring the results, then you are just throwing money away. Marketing without a plan is like driving with your eyes closed. You’re probably going to crash.
