Marketing Strategy

How Much Does Marketing Cost?

This is a very important question for business owners wanting to attract clients to their products and services, or put together a marketing budget.

This question can probably be aligned with a similar question – How long is a piece of string?  When it comes to determining the cost of marketing or the money to be spent on marketing the answers vary a lot.

What Marketing is Not…

When putting a price on marketing, it is important to understand what marketing is not.   “Marketing” is not a physical product that you can buy.  It’s not something you can go into a shop, take off the shelf, and purchase at the register.  It’s not a piece of software that you can download.  And then once you have it, you can say “Phew… that’s the marketing bought for my business”.

So if you cannot buy half a kilo of marketing from your favourite store, can you buy it as a service?  Can you order “1 x Marketing Service” from a person or a company, and then all your marketing is taken care of?

Basically the answer to these questions when determining a neat and tidy price for marketing is “No”.

Business Marketing Needs

So how do you determine how much your business needs to spend on Marketing?

Firstly, you need to understand that marketing is everything your business does to reach your target customer.  Marketing is your A to B.  So you cannot put a price on this, but you can set up some rules and guidelines in your business, for all the staff to follow.

Secondly, marketing is a process, with many sections and steps.  You can choose to purchase tools and resources, or the services of a consultant or co-ordinator to assist with these steps.

Here are a few ideas of marketing services you can buy in terms of physical tools or services:

Marketing Research

  • You can buy various research reports
  • you can pay for a Market Research company to conduct research for you
  • you can buy software to help you research – like Survey/ Poll services

Marketing Plan

  • you can buy Marketing Planning software
  • you can pay a Marketing Consultant to compile your company plan for you
  • you can pay a Marketing Coach to assist you to compile your company plan

Marketing Strategy

  • you can pay a Marketing Consultant to devise a strategy for your business
  • you can pay a Marketing Coach to help you devise a strategy

Marketing PR (Public Relations)

  • you can pay a PR agency to manage your PR
  • you can pay for enhanced Press Release submission services online
  • you can pay a freelancer to write your press releases

Marketing Promotions – Traditional

  • you can pay a marketing consultant to run your offline promotions
  • you can buy newspaper ads, magazine ads, tv ads, radio ads
  • you can send direct mail
  • you can buy a mailing list
  • you can sponsor a school/ charity/ event
  • you can attend a conference/ tradeshow/ seminar
  • you can buy business cards, leaflets, brochures, and letterhead

Marketing Promotions – Digital

  • you can pay for a custom designed website, or you can use or buy a template
  • you can pay for an SEO Expert to optimize your website
  • you can pay for PPC (Pay-per-click) Advertising
  • you can buy banners/ ad boxes
  • you can buy an email list
  • you can pay for a Social Media Manager to set up and manage your Social Media profiles
  • you can pay a Freelance Writer to write articles and blogs for you

Actual Cost

With so many options to choose from when you are allocating your marketing budget, how do you decide how much your budget should be?

The amount you choose to spend on marketing may not be a fixed amount.  It’s difficult just to decide which to spend:

  • A percentage of your business income or revenue
  • A percentage of your business profit
  • A percentage of your start-up capital
  • A certain amount – say $5,000 per year

Research has shown that technology companies tend to spend the highest in terms of a percentage of their revenue – around 20% on sales and marketing.

But the CMO Council’s 2010 survey figures showed only 16% of companies spend between 5-6% of revenue on marketing, with 23% spending over 6%.  This shows there could be huge opportunities being missed in terms of business marketing, and attracting new clients.

It’s important to remember that you need to get the greatest return on the money you spend on marketing.  Just because you spend a lot, does not automatically mean you will get a lot back in terms of revenue or new customers.  This is why marketing is so complex, part science and part creativeness.

You either need to spend time on marketing, or money.  Preferably both.  I would advise that your marketing budget should be in line with your business budget, taking into account the cash you have available and the running expenses of your business.

In today’s market, an initial budget of $2,000 would be a good place to start for a small or start up business.  Medium businesses set a budget around $10,000 – $50,000 per year. Larger businesses will likely start around $100,000 and go upwards from there.

Feel free to share your thoughts, and comment below.

Marketing Manager, Content Strategist and Writer driving Engagement and ROI. On weekends I'm a Property Investor, Traveler & Coffee Snob


  • Roberto - Tijuana

    “Either you pay with your time, or with your cash”

    So true, many people think that the internet is the place to get free marketing. The open up facebook and twitter accounts, post stuff in the first week, and then stop. Then they complain that internet marketing does not work. It won’t if you don’t pay the price.

    Great post, as always!

  • Paula Pollock

    Great post! Really helps the average business realize that there is a bit more to pricing their marketing services. As I market in North America, there are definitely differences in our marketing boundaries. Thanks for adding one more quill to our quiver with clients who cannot justify marketing’s cost.


    BTW, I was in Sydney for the Olympics – fantastic place! If I ever run away from home, I’m going straight to Bondi.

    • Fiona

      @Paula Pollock, Hi Paula,

      Thanks for your comment. Yes a lot of businesses still tie marketing and advertising together, and they do not realise there is so much more.

      How do you feel marketing is perceived in North America? What are the marketing boundary differences that you notice?

      And I’m happy to hear about your Aussies travels, and that you had a great time in oz 🙂

  • Anne

    I really liked how you break it down to actual components. Marketing can be intimidating, simply because it’s so huge and vague. It’s nice to look at it in concrete terms.

    • Fiona

      @Anne, Hi Anne, Thank you for your feedback. So many things fit under the one heading of “Marketing” that it can seem a bit daunting when facing the “Marketing Plan” or “Marketing Budget”.

      This is probably because each business is different, and needs to approach marketing in different ways. Also it a much more common term for big business, rather than small business. A lot of small business owners tend to think – I’ll look at marketing once I have some spare cash, or when I have some free time. Which is like shooting yourself in the foot, because small business owners rarely tend to have spare cash, and even less have free time. So they get caught in a cycle, and there marketing is working in the background with very low efficiently.

      Only once small business owners start taking marketing seriously and investing the right amount of time and money, do their businesses really take off.

  • Mike Pedersen

    In my opinion marketing should be at the top of the list of importance because you can have the best product or service, but if no one knows you exist you will not make it. So many business owners don’t get that. They look at marketing as more money being spent, and not from the standpoint that it will help grow their business. This was an excellent post describing marketing needs. It’s not rocket-science, but business owners need to treat it like a necessary.


    • Fiona

      @Mike Pedersen, Hi Mike,

      Yes, it’s amazing how many businesses do not invest enough time and money in marketing, when it truly is the key to survival. How good you are at something, or how great your product is, is really meaningless if no-one knows about you and your business.

      Yes, businesses tend to shy away from the marketing “expense”, but do not realise that they have the wrong focus. They need to stop looking at expense and start looking at ROI (return on investment).

      For example: I spend $1,500 on a marketing consultant, and from following their suggestions and implementing their recommendations, they earn an extra $10,000 in income over a set period of time, then this is a great ROI.

      Or if you spend $1,000 with a PR company, and you get a tonne of new traffic to your website, and increased phone call enquiries, resulting in more sales. Then if each new client is worth $600 to your business, and you get 3 clients, the return on investment is more than worth it.

      A lot of business owners don’t like numbers, but in marketing, numbers is key! Knowing the cost to acquire each new customer, and knowing what each new customer is worth to your business is paramount to making marketing work, and having an efficient marketing strategy and budget.

      Yes it’s not rocket science, but unless the fundamentals are known and understood, business owners will struggle to make it work.

      Thanks for your comment.

  • Linette Daniels- The Youth Success Doctor

    Figuring out an effective marketing plan for your business is hard enough, then when you throw in budget development many business owners fall short. Marketing needs are very unique but I appreciate you giving a ballpark figure that I can share with my clients.

    I find myself constantly saying “you either have money or you have time”. I hope people hear you because it’s true.

    Most things can be self-done if you have time to do it, learn it, fix it and re-do it several times; otherwise pay the money.

    • Fiona

      @Linette Daniels- The Youth Success Doctor, Hi Linette,

      Yes developing a budget into your marketing plan can be tricky, especially if you are considering trying marketing channels you have never tried before. Some business owners just get stuck because they really don’t know how much they should allocate to a certain endeavour.

      This is where marketing consultants can be worth their weight in gold, because they deal with so many businesses, and they see so many marketing plans and budgets, they really have a great understanding of how to quickly decide your costs and budget. Getting the marketing set up quickly, and starting the implementation asap, can generate for a business much more that the cost of a few consulting hours.

      I’m glad you share my opinion on the “freebie” issue, and the money vs time. It is SO true. 🙂

  • Sheila Atwood

    Wow! I would never have guessed that the difference in the amount that tech companies spend compared to the rest. It does leave the door wide open especially since technology is the new marketing wave…for example, marketing on cell phones.

    • Fiona

      @Sheila Atwood, Yes, Sheila I was surprised too. But it’s funny if you look at the types of companies receiving large amounts of investment, and moving forward in the business marketplace. Tech companies are once again leading the way. Imagine if other businesses spent even close to that on marketing, how quickly they would move forward…

      And yes, marketing on cell phones/ smartphones IS the next big thing. I wonder what percentage of businesses are getting ready?

      Thanks for your comment.