How is marketing an investment in your business?
As you can probably guess, the investment we haven’t covered yet is marketing.
In part, we’ve held off on marketing because it doesn’t fall in the “obvious” category of investments you can make in your company.
Those other examples are—for the most part—quite tangible in nature:
- When you purchase new laptops, drill presses, cash registers, etc., you can see and feel the respective objects.
- If you own the building housing your business, it’s (in all likelihood) literally concrete.
- Even investing in employees basically meets this criterion, since (with apologies to Rene Descartes) people clearly exist in physical reality.
Being an abstract concept, marketing doesn’t fit the bill.
If we consider the definition of investing to be “expending resources with the intent of improving an existing state,” however, it absolutely does.
See, the reason companies use marketing is to create new sales leads. In turn, this can lead to increased revenue. And since it takes resources to effectively market a business, all criteria of that definition are covered.
There’s another reason we didn’t lump marketing in with investments like capital expenditures and real estate: the importance it plays in your company’s success.
Is marketing the ultimate business investment?
Yes, marketing is the ultimate investment you can make in your business.
That said, the answer to that question might have been different as recently as twenty years ago.
So, what changed?
Here’s a hint: we’re talking about the biggest technological advance of our lifetime (and perhaps even in human history).
Yep, the internet.
And because the internet has become such a pervasive entity in our lives—to the point everyone carries around handheld tools that enable 24/7 connectivity—the nature of marketing itself has expanded greatly.
Whereas once upon a time marketing was mostly a matter of having ads in periodicals and on television and the radio, nowadays we’re talking about things like:
- Sophisticated email marketing campaigns
- Social media marketing that strengthens and promotes brand identity
- Websites that convert visitors into sales leads
- Techniques and efforts to boost SEO
- Videos that can be hosted on a variety of platforms
Clearly, this isn’t your grandmother’s marketing anymore!
Going back to how the internet has pervaded our personal lives, the simple fact is that pretty much everyone goes online to find new products and services.
When they do, you benefit greatly if they’re finding/liking/connecting with your company.
That alone would be a convincing case as to why marketing is an outstanding investment—but it only taps into half of what constitutes investing.
The other half of the story is the amount of resources you invest.
Back in the day, you had to pay a ton if you wanted your commercials and ads to be seen by people. That was expensive. Even worse, it wasn’t incredibly effective.
Casting an incredibly wide net—like airing a television commercial or having an ad appear in a newspaper—could certainly generate some results. (People wouldn’t have used these methods if they didn’t!)
The thing is, though, that you can get considerably better results for even less money by using online ads, which target people you know are already interested in the products and/or services your company provides.
It doesn’t take an economics professor to realize that getting more for less is the quintessential definition of optimal ROI.