Marketing Is an Investment, not an Expense

Jun 15, 2020 | Digital Marketing, All, Marketing

This article is about marketing and how businesses should look at it as an investment and not an expense. Marketing has long-term benefits that cannot necessarily be measured with short-term ROI.

When you are listing your probable expenditures before starting a business, one of the things you would invariably note is marketing expenditure. For startups as well established brands marketing is often looked as a necessary expenditure for which funds need to be allocated. But that’s not true. In fact business gurus for the longest time (think of Peter Drucker – the Father of Business Consulting) have reiterated that marketing is an investment, never an expense. If you too think it is an investment, you will stop scorning at every budget report highlighting the “exorbitant” marketing expenditures.

What Marketing Does
The basic tenets of marketing define a product that is innovative, price that is competitive, ideal place where it is sold and an integrated marketing strategy to promote the product. Popularly known as the four P’s of marketing, they are the foundation on which every plan is devised, every action taken and ROI (return on investment) measured. But sadly, businesses equate marketing to simply promotion – which means that they are always seeking tangible results, mostly in the form of measurable ROI.

It is important to understand that marketing is more than that. You cannot cut down marketing budget when sales are low and expect your products/services to reach their end users. However this is one of the most common mistakes made. In fact what businesses should do when sales go down is to invest more in marketing efforts so that the intended message reaches newer audiences and garners more customers.

Marketing Is An Investment

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Focusing on Long-Term Goals
Whenever any marketing plan is charted, the idea should be to focus on long-term goals. In all likelihood marketing efforts won’t give tangible or immediate results, except for a probable increase in sales. But that can only be short-term. Marketing pays off in the long run and persistent marketing efforts means you are creating a moat for your business which comes to your rescue even when things aren’t in your favor.

Many consider a website as a marketing gimmick which though necessary, does not offer any ROI. Maybe it is true. Maybe the value of a well-designed, informative, interactive website cannot be measured in terms of increased sales, but it is surely an investment that gives your business a solid foundation and credibility. This also holds true for social media marketing. They should be treated as a part of a comprehensive long-term marketing plan without expecting immediate returns. Such marketing plans are a part of a complex web of information that you want your audience to grasp without necessarily expecting immediate action from their end.

Once you start looking at marketing as a necessity and do not link it to direct and immediate returns, you will see that it is not an expenditure. However it must be mentioned that bad marketing decisions can choke your future growth trajectory. Also if you start becoming obsessed with returns, then all your marketing efforts will fall short of expectations. The key here is to strike a balance that can be achieved by establishing KPIs (key performance indicators) that can help track your growth and progress without always relying on ROI.

To sum up you must look at marketing as an investment and not analyze how every penny is spent but see it as a strategy that will help in improving your brand’s visibility and add to your brand equity. To learn what are viable marketing options for you, feel free to reach out and we’ll gladly assist!

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