Marketing Money: Where, How, & How Much to Invest

 

You’ve probably heard the phrase tossed around the office or on social media, but to be clear—a “marketing spend” refers to how much money a business allocates within their operating budget to marketing efforts, which can include Google advertising, social media and email campaigns.

For many business owners, deciding how much money to dedicate to marketing can be a challenging task. Some view marketing expenses as an added cost, rather than an investment vital to their future success.

We know how quickly expenses add up, but if you understand marketing as a necessary investment, it will change the way you feel about marketing spends. And when you see return on your investment, you will be glad you earmarked some of your budget money as marketing moola.

With the right approach and guidance, a well-planned marketing campaign is one of the most powerful tools for attracting new customers, building brand awareness, and ultimately driving business growth.

Determine your marketing budget as a percentage of revenue
What to include in a marketing budget
Make the most of your marketing budget
How much money to invest in each type of campaign

  

Determine your marketing budget as a percentage of revenue

According to recent HubSpot research, “The amount of revenue businesses allocate to marketing has grown over the past 12 years, with the average at 8.7% of overall company revenue in 2022.

“B2B product industries allocate, on average, roughly 7.8% of revenue to marketing. This is similar to B2C services (6.5%) and B2B services (5.9%). B2C Product allocates the highest amount at 15.1% of total revenue.

“Small businesses are also spending. In a survey of 85 small business owners and marketers, 52% said they’re spending $5–$15,000 per month on marketing.”

How much you allocate will depend on your annual revenue and the type of industry you’re in. Learn more about budgeting by industry.

  

What to include in a marketing budget

There’s no secret sauce to a successful marketing campaign because each one will differ business to business. There are staples to consider, sure, but you can’t go out and copy what someone else did and expect it to work miracles. Instead, carefully evaluate the following items and their impact on your overall marketing goals—that’s how the magic happens.

• Advertising spend: This includes paid advertising on various platforms, such as Google Ads, social media ads, display ads, and video ads.
• Printed materials: This includes creating and printing brochures, flyers, business cards, posters, and other marketing collateral.
• In-house team salaries: If you have an in-house marketing team, you’ll need to budget for their salaries and benefits. However, many businesses do not include these expenses as part of their marketing budget.
• Freelance-marketers: Depending on your strategy and your in-house team, you may need to hire separate freelancers for design, content creation, video production, campaign management, etc.
• Events and trade shows: If you plan on attending industry events or trade shows, you’ll need to budget for booth rentals, promotional materials, and travel expenses.

If you’re working with a marketing agency, you’ll need to budget for their fees, which can vary depending on the scope of work. The following spends are usually covered as part of a monthly fee when you work with a marketing agency:

• Software and tools: You may need to invest in marketing automation software, email marketing platforms, or other tools to support your marketing efforts. Most of those costs are already covered when hiring a firm.
• Content creation: Creating blog posts, videos, social media content, and other forms of content to engage with your target audience.
• Research and data analysis: You may need to invest in market research, data analysis, and customer insights to inform your marketing strategy.
• Website and SEO: Website design and development, search engine optimization (SEO), and website hosting fees.
• Social media management: Managing and growing your social media presence, including content creation, community management, and social media advertising.
• Public relations: Managing your company’s public image, developing media relations, and executing PR campaigns.
• Email marketing: Creating and sending email campaigns to your subscribers, managing your email list, and tracking email marketing metrics.

  

Make the most of your marketing budget

Once you’ve decided on a marketing budget, you need to know where to invest your money to get the best results. We’re not talking about the stock market (or Google; although, if you have a time machine to the 1990s, for sure invest in Google!) You, or the agency you’ve hired, should choose campaigns and platforms based on the goals of your particular marketing strategy. Here are some of the most common strategies that deliver great return on investment.

• Website design: As the foundation for most digital marketing strategies, building or redesigning your website is crucial. Your website must be visually appealing, user-friendly, and optimized for search engines and conversions. It needs to have clear call to actions (CTAs) to turn visitors into leads.
• Pay-Per-Click (PPC) advertising: Paid search ads can be highly targeted and quickly drive traffic to your website or landing pages. They target people who are actively looking for your product or services. The most well known platforms are Google Ads and Microsoft Ads.
• Social media advertising: Social media platforms offer a variety of advertising options to reach your target audience, create engagement, and build brand awareness. Take advantage of the information that platforms like Facebook, Instagram, LinkedIn, and Twitter already have about their audience to help you target the specific audience you are looking for.
• Email marketing: Building an email list and sending regular newsletters and promotional offers can help you stay top-of-mind with your customers and drive conversions.
• Content marketing: Creating high-quality content such as blog posts, digital newsletters, and infographics can help attract and engage your target audience.
• Video marketing: Creating engaging videos and using video ads can help you connect with your target audience and drive conversions.

  

How much money to invest in each type of campaign

There is no standard solution or blanket advice to tell you how much money to invest in different campaigns. The answer for you greatly depends on your goals and strategy, as well as where your target audience is. It’s usually recommended to strike a balance between lead generation ads and brand awareness ads, as they are the two most important pillars of a campaign.

If you’re a new company, awareness campaigns are crucial to introduce your product and lodge your brand in your audience’s mind. These are visual campaigns that include graphics, animations, and videos that run as social media ads, Google Display ads, and video ads. “Out of sight, out of mind,” isn’t just something people say. It’s true! So make it work for you!

If you’re a well-known brand, then you can tilt the scale of your budget more into lead ads. The most common lead ads are Google and Microsoft search ads because they show up when a user is actively searching for what you have to offer. Social media platforms like Facebook, Instagram, and LinkedIn also offer lead-generation ads when users fill in a form directly on the platform—without even visiting your website.

If you need help prioritizing your needs or specific information on how to decide where and how much to invest in marketing, Liquid Creative can help. Contact us today to plan next steps for your marketing strategy and make the magic happen!