How Much Money Does Effective Marketing Really Cost?

With so many different marketing channels available today, knowing just which is right for your business and how much budget to allocate can feel like an overwhelming task for many marketers and small business owners.

Putting an exact number on this question is pretty difficult, as so many factors affect the outcome. However, this article should give you some idea of just what you can expect to spend on your marketing.

Before you start, knowing what you hope to achieve is important; setting realistic goals will help with your focus and will narrow down the costs. It almost goes without saying that a good solid marketing plan will help with this, as will having the data you need at your fingertips.

Marketing analytics will assist you with understanding your audience, effective targeting and with proving value. According to research by The CMO Survey, spending on marketing analytics is expected to increase a whopping 83 per cent in the next three years. Current levels see companies allocating just over 6 per cent of the marketing budget on analytics, so there’s plenty of scope for increases.

Small or large business?

Of course, a company’s marketing needs – and in turn spend – will depend hugely on its size; a small one-man independent is going to have very different needs to a larger organisation capable of hiring a whole marketing team. Many good marketing companies will understand this and so will offer packages tailored to the size and needs of your business, along with rates to match.

Budget should ideally be calculated based on revenue, but despite this, businesses with £20million or more in revenue are still only dedicating an average of 0-5 per cent of their revenue on marketing.

SMEs, on the other hand, are spending an average of 20 per cent here. A survey at the end of 2014 found that small to medium-sized enterprises were not only spending more than the previous year, but more than half (59 per cent) had increased their budgets between 2013 and 2014. This growth is forecast to continue, at least for the coming years.

The different channels

Traditional marketing

In this digital age there still exists a place for traditional marketing avenues such as print magazines, leaflet drops, direct mail and fliers. In fact (and bucking predictions), door-to-door marketing is still going strong, with UK companies spending a whopping 1.5 billion on paper-based direct marketing. A statistic from the Direct Mail Association claims that 48 per cent of adults take action as a result of direct mail.

The Royal Mail offers a door-to-door mail-drop, and there are many small local companies providing a similar service. Prices are usually based on the size of the leaflet and the number of properties targeted; generally it will work out more cost effective the more you send. Like any type of marketing; knowing your target audience and segmenting properly will help direct mail really get you value for money.

Event marketing

Events, for example booths at trade shows, can pull together all the other channels of marketing seamlessly and are ideal opportunities for reaching out to a wide audience. While they can be expensive, the ROI will be satisfactory – providing enough research is done in advance to ensure the events allow you to reach your desired target audience.

SMS and mobile advertising

CRM giant Salesforce has already stated a notable increase in businesses using some form of mobile marketing; whether it’s SMS, push notifications or mobile apps. Specifically, 46 per cent of businesses utilise this channel; a huge increase on the 23 per cent recorded in 2014.

When it comes to SMS, most plans will offer flexibility, so generally you need only spend as much or as little as you like. Proper segmenting and carefully managed lists will mean you don’t need to send millions of messages to your whole database; making your money work harder as you target those individuals most receptive to your product. With Textlocal, for example, messages cost as little as 2.4p per text on the Classic pay as you go plan, which is ideal for smaller businesses. With no contracts or commitments, the more texts you send the cheaper the rate that’s available to you.

For larger companies, the Corporate plan costs just £29.95 per month for a yearly contract, or £39.95 on a rolling monthly plan. This flexibility allows you to budget SMS into your marketing plan effectively.

Digital marketing

As we roll towards the second machine age, digital marketing is becoming an integral part of strategy for marketers. In fact, according to Gartner, companies’ digital marketing budgets will increase by eight percent over 2015.

Digital marketing covers a whole spectrum, including content and social marketing, SEO (search engine optimisation) and PPC (pay per click). It also extends to email marketing, online adverts, mobile advertising, websites (of course), and much more. In reality, companies that ignore digital marketing do so at their peril, though that’s not to say it’s the only type of marketing on which to focus. In fact, studies have shown that many successful companies use an integrated approach; using a blend of different marketing channels for maximum impact.


Laura McLellan, research vice president at Gartner, summed up a marketer’s approach to an integrated strategy when she said: “The line between digital and traditional marketing continues to blur. It’s less about digital marketing than marketing in a digital world.

“Hence, marketers manage a much more balanced and integrated marketing mix than in previous years, which were characterized by online and offline silos. The resulting digital experience moves customers toward a more self-service buying model, allowing reductions in sales budgets that were designed around older, physical models.”

Times are clearly changing and so are marketers. Using data effectively will mean marketers can decide more strategically how they can best utilise their spending; whilst operating in an integrated fashion will help with the balance. Data will also help with budget allocation, but it is important that marketers invest in good quality marketing companies to help them make the most of their budgets.

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