The Cost of Marketing

How Much You Should Spend on Marketing to Grow Your Business?

The cost of doing marketing might seem high, but the cost of not doing marketing is even higher. Companies that don’t inject a good amount of their budget into customer acquisition and brand awareness will have a harder time than their competition when trying to scale profitably.

Competitors that invest more in marketing get to be light years ahead of those that see marketing as a cost rather than an investment. There is a reason why, in this context, the term ROAS (return on Ad spend) is essentially the same as ROI.

But how much should you spend on marketing?

Well, it depends. There are lots of factors to consider when making such a decision like your company’s overall operating budget, your business objectives, your company’s stage of growth, and the maturity of its product.

A good place to start is by allocating around 3% to 5% of your company’s total revenue to marketing if you’re a startup or small business. If you’re a larger company, you should be spending anywhere from 7% to 12%. And if you’re a large enterprise company, you should be spending upwards of 15% percent.

Of course, these are just rough estimates based on industry comparisons but they do help give you a general idea of where to start.

At the end of the day, the amount you spend on marketing should be relative to your company’s size and its goals. If you want to acquire more customers and grow your business, you need to be prepared to invest in marketing.

It’s an essential part of doing business.