Marketing costs are expenses that are related to promoting and selling products or services to customers. These costs can include advertising, sales commissions, pricing strategies, and distribution expenses. The amount of money that a company spends on marketing can vary, but mature firms typically allocate between 4% and 24% of their total budget to marketing efforts. Startups may spend more or less on marketing depending on their stage of development and business strategy. Here are some examples.
The all-in fixed costs of your marketing and sales teams including things like salary and rent for office space.
Paying to reach an audience with a message in broadcast, digital and print media.
Performance based pay for salespeople.
Sales commissions paid out to partners.
The cost of sponsoring media influencers, events and other entities such as sports teams.
The cost of promotional activities such as a product launch event.
The cost of producing marketing media such as a television commercial or social media post.
Fees for consulting and other services provided by marketing, creative and advertising agencies.
The cost of marketing locations such as a product showroom.
Costs related to holding or attending events such as an industry conference.
Expenses for marketing related technology including hardware, software and services. For example, the monthly license fees for a marketing or sales automation platform.
Design & Development
The costs of designing and developing unique marketing technology or media such as a website.
Travel costs related to any marketing or sales activity.
The cost of training marketing and sales teams.
Costs related to branding such as redesigning a logo.
The costs of displaying merchandise including things like promotional in-store displays.
Distribution can be viewed as marketing or operations. For example, a book seller may view the costs of warehousing their products with a sales partner as a marketing cost.
The costs of public relations including crisis communications may be viewed as a marketing cost or as a general corporate cost.
Menu costs are costs related to changing prices such as the signs required for a price promotion.
The cost of promotional items such as a cup with your logo on it.
The cost of direct mail campaigns such as a catalog you send to customers.
The cost of developing and creating promotional knowledge artifacts and media that are used in marketing and sales such as a product brochure or industry white paper.
Any expenses that are directly attributable to selling to a customer including things like travel.
Entertainment & Gifts
The cost of entertaining and giving small gifts to clients. This is a tax sensitive area such that these costs are at risk of being viewed as invalid or excessive. It is also a compliance intensive area particularly where a customer is a government e.g. the Foreign Corrupt Practices Act.
Customer Acquisition Cost
Customer acquisition cost is the total marketing and sales cost attributable to a customer. This may be calculated for all customers or for individual accounts. It can also be examined for different segments.