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Is Marketing an Expense or Investment

Is Marketing an Expense or Investment?

It is an age old debate that goes right to the core of marketing: is marketing an expense or an investment?

An investment is an asset that is expected to grow over time, eventually producing a profit for your business. A restaurant may ‘invest’ in produce which it then sells to customers at a profit. Expenses are the opposite of an investment. Overtime they will depreciate in value, and even though they don’t necessarily produce a direct return on investment, they are vital to your business. Expenses for your company might include paper, a car, or a laptop.

Marketing, depending on how you look at it, can be considered either an investment or an expense. It isn’t a matter of spending too much or too little, it is where it is spent, and what it is doing for you. Some companies spend peanuts and get away without, others spend a disproportionate amount to what they see in return.

What is your brand worth?

Some companies think that if they spend $1,000 on branding, then they should see a direct return of $10,000, but the fact is branding simply doesn’t work that way. Building a brand takes time and money. Even though you won’t be able to track a direct return on investment (ROI), you will still benefit in the long run.

Apple’s brand alone is worth $93.3 billion. That means even if they didn’t have a single store, or sell a single iPhone, their name and image alone are worth more than most companies. Just like you can’t run your business without a laptop (and your laptop doesn’t directly generate a return on investment) you can’t build a brand without spending money on marketing.

Your brand is your biggest asset. Even if you were to lose all of your merchandise in a fire, you would be able to rebuild your business as long as you and your brand were recognized, and respected.

Community engagement

Viewing marketing as an expense allows you to give back to your local community by sponsoring tournaments, holding raffles, or advertising at local events. You won’t see a direct ROI overnight, but don’t be surprised if people start recognizing you and giving you their business.

In life and business, the more you give the more you get. The more you help people the more likely they are to sing your praises and refer you to their friends, family and colleagues.

It takes time

Building a brand takes time and even though it may seem like an expense at first, in the long run it is an investment. But what if you can’t wait? There are ways to track and measure your marketing campaign’s direct return on investment (ROI).

Building an attribution model is the best way to measure marketing as an investment. Digital marketing is well suited for tracking leads, sales and ROI through automated analytics. Traditional advertising campaigns can be tracked using customer surveys or trackable coupons.

Ultimately marketing is both an investment and expense

Even the best attribution model won’t be able to accurately predict the future brand value that your marketing generates. There is no substitute for getting your name out there.  Getting involved in the community – and no way to attach a value in dollars and cents. Good things come to those who wait. If you’re ready to start investing in your brand give us a call. At AS Advertising we make your good ideas great!