The debate on marketing costs for companies reignites every year, with entrepreneurs and managers wondering about the ideal amount to invest in their promotion strategies
Understanding how much to spend on marketing is crucial, but the truth is that there is no universal figure or percentage that fits all businesses.
Marketing should not be viewed simply as a cost, but as an essential strategic investment for business growth and innovation.
In fact, it is necessary to consider how in the current corporate landscape the creation and care of digital spaces such as the website, social media pages and, when necessary, landing pages – in this regard the in-depth analysis by Luca Orlandini, a professional in the sector, provides an overview of the costs of this conversion tool – they play a crucial role in marketing terms as they allow companies to increase their online visibility, establish a direct relationship with potential customers and promote its products and services in a targeted manner.
The percentage of turnover in marketing
Traditionally, it is suggested that companies allocate around 5% of their total revenue to marketing to maintain their market position, while those looking for growth or greater market share should consider investing up to 10%.
However, this percentage can vary greatly depending on the sector it belongs to and the stage of growth of the company, with some industries, such as retail and pharmaceuticals, which can get to invest between 20% and 50% of their net marketing revenue.
These numbers may seem intimidating, but it’s important to remember that your marketing budget includes several expense items, such as staff, printing, online and offline advertising, and the use of external resources. Each company must therefore carefully evaluate how to allocate these resources to maximize your return on investment.
Factors that influence the marketing budget
Different circumstances require diversified approaches to the marketing budget. For example, companies venturing into new markets or launching new products may need to invest well over 10% of their revenue to become known and gain market share.
Likewise, unique challenges such as fierce competition, the need to overcome a crisis, or expansion nationwide or via e-commerce may require a significant increase of investment in marketing.
On the contrary, there are situations in which a company could justify an investment in marketing of less than 10% of turnover.
This can happen when the company has manufacturing limitations that prevent rapid growth, operates in an industry with few competitors, or relies heavily on referrals and existing relationships to acquire new customers.
Additionally, businesses that are part of an affiliate network could benefit from the parent company’s marketing efforts, allowing them to reduce their own marketing budget.
Strategic considerations
Determine your ideal marketing budget requires a deep understanding of business objectives, target audiences, competitive environment and internal capabilities. A holistic approach that considers all aspects of marketing, from online and offline advertising to social media promotion, email marketing to content marketing, and beyond, is essential.
Furthermore, digital evolution has expanded marketing opportunities at relatively low costs but with a high potential return on investment. Social media platforms, search engine marketing (SEM), the SEO e il content marketing they offer companies powerful tools to reach their audiences in an effective and measurable way.
There is no single answer to the question of marketing costs for companies, since each company has specific needs and objectives. However, viewing marketing as an investment rather than just a cost can help frame the picture spending strategies correctly.
A careful analysis of the market, the competition and your own internal resources, together with a constant monitoring of performancewill allow you to allocate the marketing budget in an optimal way, thus maximizing the return on investment and contributing to the sustainable growth of the company.