While the total cost of marketing is difficult to estimate, it can be estimated using the following methods: overhead, direct costs, and hidden costs. These are all expenses that aren’t directly related to the profit and loss statement, but are vital to the success of your marketing efforts. Overhead expenses can be substantial, and should be accounted for in the cost of your marketing plan. Here are five types of overhead expense that you should account for:
- Marketing cost: These expenses can be broken down by type. Direct and indirect advertising, direct mail campaigns, and media and sales promotion. These expenses are largely variable, but can be calculated using a variety of methods. For example, you might decide to use one of these methods to determine your total marketing costs. In this case, your marketing cost would be a percentage of your total sales, while the overall budget would be the same as your sales.
- Social network costs: Social networks have their own advertising offices, which make sure that the advertising posts are relevant to their users. Paid advertising is a popular way to reach people, but the fees are not free. You need to pay for the creatives. And, of course, the costs of employing staff are a huge portion of your total marketing budget. Your employees’ salaries, bonuses, and time spent on interviews will also add up. Investing in marketing research will allow you to make more informed decisions.
- Hiring an in-house marketing team can save you a lot of money. Although you’ll need to hire a larger team to reach your target audience, the costs of marketing a large team is still much more affordable. In addition, you don’t have to pay for the salary of a large team, which can add up over time. You can even hire specialists from other industries to work on specific projects. The costs of in-house marketing are lower than hiring a full-time team, so you can easily get started on your marketing efforts.
- Fixed and variable costs: Marketing agencies charge a lower price than an in-house marketing team. However, you should be aware that the agency may not be able to handle all of your business’s needs. This is why it’s important to look for add-ons that meet your specific needs. If your goal is to attract more customers and increase sales, you’ll need to invest in copywriting, photography, and optimization.
- In-house costs: While the cost of in-house marketing team is relatively low, the costs of in-house advertising can add up. For a small business, marketing expenses may include hiring a brand manager, salespeople, and marketing staff. A small business will also need to spend a lot of money on advertising on social media. In addition to hiring these individuals, you’ll also need to hire an accountant to oversee the costs.