Marketing Spend is at the core of any organization’s strategy. If you don’t have a grasp on your marketing spend, chances are you aren’t setting yourself up for success.
In this post, we are going to help you figure out how much you need to spend on marketing. But before we do, let’s take another look at the actual definition of marketing spend and what expenses it consists of.
According to Trackmaven, “Marketing spend represents the amount of money a marketing department spends on activities such as content marketing, paid advertising, SEO, social media, trade shows, and more.”
Marketing spend is so much more than just how much you spend on an agency or on your paid ads. You’ve got to factor in so many different expenses that it can be easy to get lost.
We‘ve broken these down into 4 categories that make it easy to trace where you’re spending on marketing.
Digital Marketing Spend
Anything that you spend online is going to fall under digital marketing spend. The only exception to this would be the tools and software that you use for your website. Any marketing, advertising, content creation etc is going to be classified under digital marketing spend.
Here are the 6 areas of digital marketing spend that you should be investing in for your business:
1. Advertising Spend
2. Social Media
3. Video Content
4. Link Building
5. Search Engine Optimization
6. Pay-Per-Click Marketing
Advertising Spend
This is probably the main source of your marketing spend. Anything you spend advertising your website, product, or service on Social media, search engines, YouTube, Outbrain etc. will fall under your advertising spend.
We classify this group as digital advertising only. Anything offline such as radio ads, TV ads, print etc will go under your traditional spend.
You want to segment your spend because it will let you calculate your ROI based on the medium you’re targeting. You can’t track click-through-rates or cost-per-click for an offline ad. So why group the spend together with your digital efforts?
Keep it separate, keep it simple.
Advertising spend is also going to make up the majority of your marketing spend depending on the industry you’re in. You can access almost anyone in the world thanks to the internet. If your business isn’t leveraging that, you’re missing out big time. If you aren’t sure how digital marketing spend can be beneficial for you, get in touch with our team for a free marketing consultation.
Social Media
When dealing with social media, you’ve got to remember that not all networks are built equal. They also don’t work for every industry either. We’ve had clients who swore by Facebook advertising only for it to fail spectacularly for another
We even had one client in particular who refused to spend a dime on Facebook advertising for selling products.
That is until this year when a campaign we launched lead to 2,500 leads over a 30 day period!
Just because you’ve tried it before, doesn’t mean it won’t work now. That being said, you also should understand that you can’t just throw money at the problem.
You need to know which social networks you should invest in for your industry.
We won’t jump into this just yet but if one network is swallowing up your cash and not giving you an ROI, you should consider moving your budget to another network.
Video Content
Have you spent any time investing in video content? If not, you definitely should consider it for 2019. Video is the future of engaging your audience.
Did you know that 54% of people would like to see more video content from marketers?
Why wouldn’t you leverage that? Video marketing is going to play a crucial role in 2019.
What are you spending it on?
Anything related to your equipment, cost of producing the video, like that cool drone video for your promo! Any advertising related to promoting the video or even if you pay for video hosting. All of those costs are part of your video marketing spend.
Track everything, you want to stay on top of your marketing spend and video can have a lot of hidden costs if you haven’t broken it all down.
Link Building
We all know that quality link building is tough. Sometimes it’s easier to outsource this instead of investing your in-house resources to build the links.
That’s actually a great move, not just because it gives us a job ;), but because it’s considerably more expensive to link build in-house than it is to outsource.
The simplest method to track this spend is to create a Google Sheet that can house your link building report as well as however much you’ve spent on the resource that built those links.
We’ve created a free document that you can use as a guideline for this purpose. You can download that here.
Keep in mind that you only want to work with reputable companies when dealing with link-building.
We work with some great industry partners and even perform our own manual link building in-house now too. You can set up a consultation with one of our experts today
SEO
This is a huge investment in your business but don’t mistake this for Google Ads! That goes under the next section
What’s included with SEO spend? You could argue that link building and video marketing should fall under this too but they’re now so big that we think they should be kept separate.
SEO would contain any digital marketing spend that goes towards expanding your online visibility through organic traffic.
Did I make that confusing? 😅 Let’s simplify.
Did you hire an in-house writer to develop fresh content for your website?
That’s digital marketing spend for SEO.
Have you got a graphic designer that builds fancy images and graphics for your site and content?
That’s digital marketing spend for SEO.
Got an in-house resource performing on-page SEO tasks?
You got it. Digital marketing spend for SEO.
If it affects your organic rank or traffic, it most likely belongs under this section of your Advertising spend breakdown.
If you are spending a lot on these in-house resources, you could save a ton by hiring a marketing agency.
PPC Marketing
Google Ads, Bing Ads and any other online advertising not related to Video and Social media should go in this category
This would also include the cost of creating any graphics that you use on the display network too!
Did you hire a content writer to create content for the landing page? That digital marketing spend goes under Paid Search as well.
How about that landing page you built? Put the cost of that under Paid Search too.
Remember that we want to be as comprehensive as possible.
Pro Tip: Always optimize your keywords & landing pages in Paid Search campaigns and focus on keywords you’d want to rank for organically. This is a great way to improve your performance and you can then target those keywords organically to reduce your PPC spend later on.
Digital Technology Spend
Categorize any expenses related to any technology you pay for use on your website. This includes backend technology such as hosting, CDN, plugins, etc.
It’s relatively easy to get caught up wanting to purchase the latest and greatest tools, but also keep in mind that when it comes to plugins, the more you have, the more it slows down your site.
We’ve seen plugins for simple things like installing Analytics code on WordPress. You could just throw the code into your website code and save your site from loading another resource.
It’s a common occurrence and one that can be easily avoided by having a knowledgeable web maintenance person on hand for your site.
We recommend including your website under marketing spend as it is the first point of contact any customer or potential customer usually has with your business.
Every marketing campaign you run is most likely sending users to your website. Campaign success is measured by the effectiveness of your website’s ability to convert traffic into leads and customers.
Traditional Spend
This is not applicable to every industry. If you’re primarily an online business and you don’t spend on offline marketing, you can skip this section.
If this does apply to you, let’s dive right in! (If we miss anything, let us know in the comments below and we can get that added to the list).
Billboards
These can be a big expense for branding. We are huge advocates for increasing brand awareness and billboards are a fantastic way to achieve that.
Expensive. But effective.
Particularly if you get a few in high traffic areas. Orlando Health has several along the I4 corridor as well as throughout downtown Orlando. It makes a big difference when people are repetitively seeing your name everywhere.
This can even indirectly help your SEO as Google now looks at branded searches as a ranking factor for your website!
If you utilize services such as from Blipbillboards.com, you can put that expense under here too.
You should also include any costs in developing and printing the billboards as well as any installation fees you may have to pay.
Radio & Television Ads
If you advertise on traditional television stations and radio stations, this is the section for your spend. All production costs, salaries, editing costs etc. can be included in this section.
These are still hugely important for boosting your offline brand recognition. If you can afford it, you should advertise here provided it fits your target market.
There’s a reason you don’t see Ferrari, Lamborghini, or Rolls Royce advertising on TV or Radio. They know where their market is and go straight to the source.
Keep this in mind when you decide to take your marketing to the next level. Just because others are doing it, doesn’t mean it’s the best method for you to reach your audience.
Print Media
Flyers, direct mailers, banners, promotional items etc. They belong here. These are great especially when you attend conferences. Anything you get printed, include those costs of design, materials, and production.
Don’t get carried away when you’re planning this out though. It’s easy to overspend unnecessarily. Vistaprint can get you $1000 business cards? Awesome, do you know 1000 people to hand those cards out to though?
Sometimes it’s better to pay a little more for a higher quality print like something from Cutting Edge Signs and Visuals.
As you grow, you’ll need to attend more events to help keep your brand awareness higher. We especially love visiting Chamber of Commerce events as they’re a hotbed for meeting small businesses.
Most Chamber’s give you the option to have a display table at some of these events. Take advantage and push your brand awareness to the next level.
Vendor Retainer
Got an agency to handle each aspect of marketing for you? That’s exactly why you need to track and monitor these numbers. Note how much you spend on each vendor and enter it into this section.
We do recommend consolidating as much as possible if you hire an SEO agency, you probably want them working on your PPC too so they create an integrated marketing plan.
If you’ve got several agencies between SEO, Paid Search, Display Advertising, Social Media, and email marketing, chances are your campaigns aren’t as optimal as they could be if they were all working together.
Consolidate and be more agile with your campaign tactics and strategies. You should also keep in mind that hiring experts in each field can be expensive. Full-service agencies do all of this already and so you’d save massively by hiring a full-service agency.
Why You Should Track Marketing Spend by Channel
If you’re a small business, it’s essential for you to track how much you’re spending on each channel. It’s easy to overspend which can lead you to feel constrained at the worst of times
Yes, it’s important to get your name out there. But if you aren’t employing best practices and running efficient campaigns, you’ll find yourself spending thousands per month for mediocre results.
Why is this so important for you? Even though corporates can afford to spend tens of thousands or even hundreds of thousands per month on marketing, the agencies they hire may not be focused on spending as efficiently as you.
They don’t need to.
When you’ve got a blank cheque, it’s easy to just throw more money at the problem to drive results.
We’ll discuss how a small business can better compete against larger organizations. Once you know about the essentials of marketing spend, it’ll be easy to understand how you can manipulate that to drive great results.
The ringer? Corporates literally cannot keep up fast enough to compete with you if you employ those tactics.
More on this later though!
Understand the limitations of budget
By tracking everything you’re spending, it enables you to keep a finger on the pulse of your marketing
You’ll better understand why you’re not getting as many impressions as a competitor especially if they’re able to spend more than you.
Unless you’re tracking your spend, there’s no way to know where you can cut spend and allocate it to more important areas.
You’ll be better at understanding the limitations of your budget. If you’re maxed out at $1000/month, you can’t effectively have a campaign across 4 different channels.
You could, however, pick the best marketing channel for your organization. Once you know which channel works best for you, focus your efforts on growth. Once you’ve got a process in place, you can scale across other channels and continue growing.
Static or Dynamic Marketing Spend
Should your digital marketing spend remain the same every month? Should you alternate how much you spend on certain channels?
The short answer is, yes. Confused? LOL.
You want to have some of these strategies remain constant. For instance, all of your static marketing spend would include things like tools, retainer fees, cost of software and hosting etc.
Dynamic marketing spend would most likely be your advertising spend which you can change at any point to better suit your tactics.
For example, if you know you receive more leads in the summer as an HVAC company, you can ramp up your spend from March-September and then reduce spend from October-February.
So now let’s dive into some info we’ve pulled together from several resources. We’re going to break down marketing spend by industry so that you have a clear idea of what to expect when building your budget.
This isn’t just a post for small businesses though, even as a corporate, you should keep an eye on what industry benchmarks are in terms of marketing spend. If you’re way under, or way over, chances are you might be doing something wrong.
In our next post, we’re going to dive in to break down how much you should spend on marketing based on the industry you’re in. Stay tuned for: Marketing Spend Part 2: How much should I spend on Marketing