BY MEL DUNN
The ultimate goal—in life and business—is to play the long game. In other words, set yourself up for long-term success. If you establish a retirement investing strategy early in your career and stick to a plan, your future self will thank you. However, while saving a certain amount every month is a good start, it’ll be difficult to reach your target without putting that money into the stock market. Similarly, in business, you won’t achieve your goals without actively investing in the promotion of your product or service.
As marketers, we know firsthand that within an organization marketing can be undervalued by some (we won’t name any names) or viewed as just another line-item expense. If you need to convince a CEO, CFO, business partner, or even yourself about the importance of investing in ongoing marketing, we recommend taking a page out of the 401(k)-investing playbook.
Like contributing to your retirement fund is an assurance of a financially stable future, marketing is a necessary investment in the long-term health of your brand and business. In both cases, the reward doesn’t come without a little risk.
Not sure where to start? Let’s review how a retirement investing strategy can teach us a thing or two about investing in marketing.
Determine an Initial Amount to Invest
Typically, the first budgeting question is: how much will it cost? Financial experts recommend setting aside a certain percentage of your total income for retirement. When setting an initial marketing budget, you’ll want to use a similar rule of thumb—choose a percentage of the company’s total budget and revenue that is sensible and sustainable for the long term.
Most B2B companies allocate between 7% and 12% of revenue to marketing efforts, but like any sound financial decision, use data to lead you to the right amount. As each individual’s retirement strategy depends on their unique situation, you’ll need to consider a variety of factors—industry, company size, age of the business, target audience, product or service being sold, and revenue performance—to determine how much to allocate to marketing.
Diversify Your Marketing Portfolio
Once you’ve determined how much to spend, you’ll need to decide how to spend it. As the proverb says: don’t put all your eggs in one basket. A financial advisor would never recommend putting all your savings into a single stock. Likewise, we would never advise a business to spend its entire marketing budget on one campaign, video, or event, or to only promote its brand on one channel. A healthy marketing plan includes the creation of numerous assets—blog posts, landing pages, ads, videos, newsletters, published articles, and more—shared across various paid, free, digital, and traditional channels.
Like stocks and bonds, not every marketing channel will perform well, all the time. To minimize the risk of frivolous spending, choose a mix of different marketing assets and channels in your marketing strategy. We recommend performing small tests before making any significant investments. For example, if you have 15% of your budget to spend on a digital ad campaign but you aren’t sure which platform—Google, LinkedIn, or Facebook—will perform best, you could spend 5% on each platform. If one campaign fails, you can reallocate your budget for a better return on investment moving forward.
This is why successful marketing strategies, and retirement portfolios, are multifaceted. If you have a diverse marketing mix, not only will you reach a wider audience, but you’ll quickly determine what works and what doesn’t work for your objectives.
Stay the Course Through Economic Uncertainty
At the early signs of a volatile economy—high inflation, interest rate hikes, and rising unemployment—your first instinct may tell you to move your money to safer, less risky assets, or to stuff it under a mattress. Similarly, when the going gets tough, some businesses are tempted to have their marketing teams cut costs and conserve cash.
But not so fast. Research shows that successful companies continue investing in marketing through the good, the bad, and the challenging economic environments. In some cases, doubling down on marketing efforts during unstable periods can be beneficial once the market shifts again. One study determined that increased advertising during a downturn can contribute to financial performance for up to three years post-recession.
Generally, financial experts discourage making sudden moves that could contradict your long-term retirement goals—and you should follow the same advice for your marketing investments. However, sitting on the sidelines isn’t the right answer either. Those that persist don’t cut spending, but instead shift their strategy and reallocate their investments to better suit the economic context.
Remember, marketing can be a slow burn. By turning off ongoing marketing activities, you risk weakening your efforts to increase brand awareness or improve search result ranking. If you stop adding fuel to your brand fire, it will eventually go out.
Marketing is a Rebalancing Act
Regular rebalancing, another word for maintenance, is a key principle of investing. Like a 401(k) account, your marketing investments need oversight and regular upkeep. Most importantly, you want to avoid the “set it and forget it” approach. If your budget allocations become unbalanced, you may get off track from meeting your goal.
Take the digital ad campaign as an example; if you run a LinkedIn ad campaign for 30 days, you wouldn’t want to launch it, leave it, and only check back at the end of the campaign. Especially with new marketing activities, it’s important to check in frequently to assess performance, check the budget, and adjust as desired.
Call in the Experts for Advice
Retirement planning can be overwhelming. Unless you moonlight as a certified financial planner, you may need to seek out an expert who can provide investment advice or manage your assets. Likewise, at some point, you may need to hire a marketing agency to help you create a marketing strategy, allocate your budget, and reach your goals.
If you want to explore more about investing in marketing, let’s chat. And if you want financial advice, go talk to the experts.