Marketing and advertising activities are essential for every business that wants to develop, expand its market, and increase revenue and profits. However, how much does marketing and advertising cost something that companies worry about to ensure the best results? Stop reading this article and listen to the experts’ sharing to better understand!
Learn about marketing and advertising
What is marketing?
There are many definitions of marketing, but you can understand it as a process of discovering needs and meeting customer needs with products and services. This process includes steps such as research, analysis, planning, strategy, budget allocation, statistics, and optimization, … If marketing initially consisted of 4 variables: Product, Price, Place, and Promotion, marketing has now been supplemented with many other factors: People, Process, Physical evidence. Marketing is now not only limited to 7P but also developed into many 4C, and 4E models.
Before marketing strategies focused on traditional channels such as print, television, and telephone, … With the development of technology today, marketing strategies have developed significantly thanks to the advent of digital marketing. It has changed the way businesses communicate with customers. Technology makes it easier to collect information, behaviors, needs, and desires of customers. Popular types of marketing include Digital Marketing, Social Media Marketing, brand management, …
What is advertising?
It is when businesses pay to place brand messages and promote products and services in a specific location. Businesses often use advertising to introduce products, and services and establish a corporate culture. If used properly and planned, advertising will promote conversions and increase sales. Advertising is a means to stimulate demand and create brand loyalty. It increases the consumption of a business’s goods by providing customers with the necessary information and useful solutions to persuade customers.
Similar to marketing, advertising has developed significantly in the 21st century when digital technology reigned. This opened up new advertising avenues for advertisers through media, websites e-commerce stores, etc. Compared to traditional advertising, online advertising has many outstanding advantages. High flexibility, wide reach, strong viral effects, and much more cost optimization. Some advertising channels that are often used by businesses are PPC advertising, outdoor advertising, television advertising, Facebook advertising, and mobile advertising. In addition, please see more information about How to set up ads manager for a Facebook page?
What is the difference between marketing and advertising?
To know how much marketing and advertising costs, let’s find out the difference between marketing and advertising as follows:
Structure
Suppose marketing is likened to a big cake consisting of many small parts such as market research, customer research, experience building, collecting customer reviews, etc. Each part will form a marketing process that is implemented through many stages so that units can achieve the set goals.
For advertising, it is understood as promoting and introducing products, services, or brands on many different channels and implemented in many forms. When building an advertisement, there will be many steps but it is not a large process like marketing.
Objective
Whether it is a marketing or advertising activity, the goal is determined from the beginning and it is the measure to evaluate the success of the campaign.
With advertising, the goal will be to introduce, repeatedly notify, and persuade customers to choose products, and services or increase brand awareness. The goal of marketing is broader than just increasing the closing rate and increasing sales, but also building relationships and loyalty with customers.
Target
Advertising is often aimed directly at potential customers, usually individuals who have a need, interest, and ability to spend on the business’s products and services.
For marketing, the target is not only the target customer but also everyone, including competitors.
Time to create results and measurement indicators
Advertising is a part of marketing, so it will bring results and profits faster. Marketing activities will have long-term significance and strengthen the brand in the future. If advertising is measured by indicators such as impressions, interactions, conversions, reach, ROAS, … In marketing, it will be measured by indicators such as market share, lifetime value and customer satisfaction, revenue, …
How much does marketing and advertising cost today?
As a business owner, you are looking for ways to increase revenue and grow your business. Marketing and advertising are two important parts of your strategy to expand your market and grow your business. However, you need to consider the costs associated with both areas.
Marketing and advertising costs will vary depending on the type of marketing and advertising you do. It includes many types of costs such as online advertising, media advertising, public relations, sponsorship, etc. Marketing and advertising costs depend on the industry, target market, competitors, business goals, and product life cycle. To determine the appropriate amount to spend on advertising and marketing, you need to follow these principles:
Development stage and financial resources
To determine the amount of money you should spend on advertising and marketing, you need to determine what stage your business is in. In addition, you need to consider financial factors and the competitiveness of the business. Specifically, if your business is in the expansion stage with very high competition, invest more resources in advertising and marketing. If your business has large financial resources aimed at strong growth, you can invest a large budget in advertising and marketing campaigns.
Start with a small advertising budget
You should start spending on advertising and marketing with a small budget of about $500 per month until you achieve great performance, then consider increasing the budget. Whether you are a small business or an established business with high revenue and profit, starting an advertising and marketing campaign with a low budget is the safest and best. You should not spend all your budget on advertising, you can start with an amount of 20 – 50 USD per day for online advertising, which is still effective.
5% revenue rule
It is a good idea to reinvest revenue back into the business through advertising. Getting new customers allows your business to grow and helps diversify your business so that you are not dependent on a few customers. However, not all businesses have the revenue to support their advertising and marketing budget. Ensure that your advertising budget complies with the regulation of 2 – 5% of revenue.
Determine a reasonable spending threshold
In case your business is in the early stages of development, you should start with an advertising budget of 300 – 500 USD per month. In addition, you need to consider spending on advertising and marketing based on advertising & marketing platforms, and conversion rates. Moreover, you need to pay attention to conversion rates and competitiveness between different industries. If your business is already operating stably, there is no need to always spend 2-5% of sales revenue on marketing. You can spend a smaller budget to ensure that potential customers and sales are generated before expanding.
At this point, you have determined how much marketing and advertising costs are currently. Hopefully, this information will help you in planning a suitable advertising and marketing budget to achieve high efficiency and optimize costs.
Information about “Set Facebook ads daily budget limit? Understanding Daily Budgets for Facebook Ads?” hopes to provide you with additional necessary knowledge. At Rent FB, there is a team of highly qualified and experienced staff and experts who will provide Facebook agency ads account as well as support when you run Facebook ads. Contact us via phone number.
Frequently asked questions
If you want to measure the effectiveness of your advertising costs, you need to evaluate, return on advertising spend (ROAS), and cost per acquisition (CPA) analysis. At the same time, you should track key performance indicators (KPIs), revenue, and return on investment (ROI) to ensure that your costs achieve the desired results.
According to the US Small Business Administration, you should spend about 7% to 8% of your revenue on marketing activities. However, this number does not apply to all industries. Because you ensure that your marketing and advertising costs are at the right level enough for your business to achieve the best return on investment (ROI). Moreover, you need to regularly monitor the effectiveness of your marketing strategy to determine the appropriate budget.
