(Note: New blog posts about startup marketing can be found on my ME Consulting Website.)
How much should startups spend on marketing?
It’s a difficult to answer question to answer because many startups think that anything spent on marketing is a challenge to justify, whether it’s $100/month for a digital tool or $25,000 for an extensive media and blogger outreach program.
The reality is most startups see marketing as a luxury or something that solves a point of pain, rather than a need-to-have or an exercise that has solid ROI. As a result, establishing a marketing budget can be a daunting exercise.
The easy answer is how much to spending on marketing is do more than nothing. Every part of a startup requires an investment in time, money and/or people, so spending on marketing is a no-brainer.
So how much makes sense?
This depends on a number of variables based on your budgets, objectives, target audiences and where your startups sits within the growth cycle.
For early-stage startups with limited resources, a reasonable budget could be $250 to $1,000/month. This would involve using a handful of free tools such as Tweetdeck and Hootsuite for social media monitoring and publishing, social media services (Facebook, Twitter, etc.) and Website optimization tools such as Kissmetrics, MixPanel or SEOMoz.
A budget of this size doesn’t involve having a part-time or full-time marketing person but it provides ground cover and establishes a solid marketing foundation that can be built upon as growth accelerates and a marketing plans expand.
Over time, the marketing budget can expand to $1,000 to $10,000/month by adding a part-time or full-time marketing person to handle social media and create content for blogs, case studies, white papers, press releases and marketing and sales collateral. This kind of budget lets a startup use premium services such as Hubspot or InfusionSoft. And it may accommodate having a PR agency on a project basis or on a small retainer, although I’m not a fan of early-stage startups having monthly retainers for PR.
As a startup accelerates it growth and begins to drive brand and product awareness, it is not unreasonable to be spending $10,000 to $25,000/month on marketing. At this stage, a startup has expanded its marketing team to two or three people, it is aggressively leveraging social media and content marketing, it’s sending people to conferences and perhaps sponsoring key events, and it has a solid media and blogger outreach program.
As much as spending money on marketing can be difficult for a startup to grasp and make happen, marketing is a key and necessary part of running a business. If customers don’t know you exist or understand what you do, it goes a long way to undermine the growth and success of your business.
For startups looking to jump-start their marketing, I provide strategic and tactical services – core messaging, brand positioning, marketing strategies and content creation.