How much should you spend on your marketing?

How much should you spend on your marketing?

If you are setting your marketing budget you might be asking that question. The answer is "It depends". There is no magic number.

It depends on a few things – the competitiveness of your market, your position within the market and your place on your growth curve.

And it’s the wrong question. The better question is “How effective should your marketing be?” For example if you are getting a 5 to 1 return on your marketing then spending $1,000 would generate $5,000 of business. At that return, why not invest $10,000 to get $50,000 of business?

The reason we ask “How much should I spend on marketing?” is because it is easier to measure that number. Most of use don’t measure the effectiveness or return on marketing because it is more difficult. So we do what’s easy and not what’s best.

So to answer the question, “How much should you spend on marketing?” my response is, “How much did you spend last year?” and “How effective was it?” If you were happy with that return then do the same, (unless the market has changed). If you want more then either increase your spending or improve the effectiveness of your marketing – or both.

So if you want an easy answer – just pick a number, any number. It’s just like playing craps. Pick a number and pray for lady luck.

If you want to improve the profitability of your business – measure what’s important –your marketing effectiveness.


George Torok

Marketing Speaker

Personal Marketing