How to define the right level of Marketing Investment

The amount of resources that a corporation commits to marketing operations is referred to as marketing investment. Marketing expenditure can enhance a company’s sales, earnings, and market share, but it can also be a source of waste and inefficiency. But, how can a business identify the best level of marketing spend for its objectives and goals?

What is marketing return on investment (ROI)?

Marketing ROI is commonly defined as the ratio of net profit to total investment cost. ROI is most relevant to business goals when it refers to something solid and measurable, such as identifying the gains and financial returns of investment. The most common way is to analyze investments in terms of monetary cost because it is the easiest to measure, but it is also possible to calculate ROI using time as an investment.

How to improve ROI

The greatest strategy to increase profits will differ depending on the type of investment you wish to make. However, there are a few general tactics you may use before making investments to increase your chances of a great ROI.

• Make analytics your ally
• Know your market
• Know your risks

One of the most effective strategies to increase your ROI is to effectively engage with your target audience using tools such as social media marketing. Investing in your target market’s understanding or increasing their involvement with your brand will likely yield great returns because these are the people who are most inclined to buy from you.

Ideal marketing investment

There are no single criteria that may justify the investment level, as an optimal investment depends on a variety of factors such as the company’s objectives, the product under consideration, the demographic location, the targeted audience, and the length of marketing, among others. It is not an easy task for a digital marketing service company to select the proper medium at random, but with experience in the area and extensive knowledge about the company objectives, it is much easier to forecast a fair investment level. However, according to many firms, the ideal marketing spend is 5% of revenue. This figure is reasonable for a business. Marketing expenditures should be spaced out across a year or so. It should cover the majority of continuing marketing operations, but some businesses will require more in the beginning.

Affective marketing

Affective marketing is an effective method of persuading customers to make purchases by appealing to their sentiments. Affective marketing’s ability to persuade and inspire consumers to take action is predicated on its ability to strike an emotional chord with them. Depending on the intended audience and the nature of the content being sent, affective marketing strategies may employ a variety of emotions. A firm might employ feelings of happiness to encourage people to think positively about their product, or feelings of terror to make them feel like they need to buy the goods immediately. Storytelling is a powerful tool for affective marketers because it helps them connect with their target audience on an emotional level and makes a lasting impression.

Conclusion

Marketing investment is a strategic decision that demands careful preparation and execution, it is rarely easy or simple. Designing and executing efficient marketing initiatives that achieve results needs a high level of experience, creativity, and innovation. That is why many businesses prefer to partner with professional marketing firms to assist them with their marketing difficulties and prospects. We, at Cactus Media Group, a Vancouver-based company that focuses on digital marketing, are one such firm. Contact us now to set up an appointment.