Marketing Costs

Marketing Costs

Marketing Costs Jonathan Poland

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.

Marketing Overhead

The all-in fixed costs of your marketing and sales teams including things like salary and rent for office space.

Advertising

Paying to reach an audience with a message in broadcast, digital and print media.

Sales Incentives

Performance based pay for salespeople.

Partner Commissions

Sales commissions paid out to partners.

Sponsorships

The cost of sponsoring media influencers, events and other entities such as sports teams.

Promotions

The cost of promotional activities such as a product launch event.

Media Production

The cost of producing marketing media such as a television commercial or social media post.

Consulting Fees

Fees for consulting and other services provided by marketing, creative and advertising agencies.

Marketing Locations

The cost of marketing locations such as a product showroom.

Events

Costs related to holding or attending events such as an industry conference.

Marketing Technology

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.

Business Travel

Travel costs related to any marketing or sales activity.

Training

The cost of training marketing and sales teams.

Branding

Costs related to branding such as redesigning a logo.

Merchandising

The costs of displaying merchandise including things like promotional in-store displays.

Distribution

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.

Public Relations

The costs of public relations including crisis communications may be viewed as a marketing cost or as a general corporate cost.

Menu Costs

Menu costs are costs related to changing prices such as the signs required for a price promotion.

Promotional Items

The cost of promotional items such as a cup with your logo on it.

Direct Mail

The cost of direct mail campaigns such as a catalog you send to customers.

Marketing Collateral

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.

Selling Costs

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.

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