“Every person watching here should always be spending between 5 to 20 percent of their money—if that’s what you’ve got—or you’re time, if that’s what you’ve got—on new and innovative things, because they need to be prepping for 2016, 2018, 20, 22.”
-Gary Vaynerchuk, Serial Entrepreneur
MARKETING BUDGET BASIC: ROI, NOT METHOD
The current competitive nature of the marketplace can sink a company quickly. For instance, Inc.com reported that 96% of businesses fail in ten years. Fortune.com reported a similar statistic. Its been a common understanding that most businesses will tank within five years. That trend doesn’t seem to be slowing. The reasons for throwing in the towel can vary. Most of the time it comes down to making enough money to be worth staying in the game. If you are going to grow your business, people will need to know it exists. That requires a marketing budget. How you tell the world your story can be costly. This video helps explain a key concept a lot of business owners can forget: Return on Investment (ROI) should be the deciding factor of how to use your dollars.
WHY SPEND IN DIGITAL OVER TRADITIONAL MARKETING
The basic factor comes down to cost. Gary Vee (that’s how he refers to himself in the video description) explains how the costs of traditional marketing cornerstones, like mail campaigns, have become increasingly less profitable due to a shift in the way people get information. I have to agree. It’s pretty simple: if less people use something, it is difficult to provide, and the complexity and resource need to make it happen is large, your cost will be higher. On the other hand, if the majority of people use it, it is less difficult to provide and maintain, the complexity and resource needs are smaller, the cost should be lower. Competition in the marketplace will grow and prices will naturally lower. Innovation will also spring up and new ways of using the method will evolve. This is the current state of digital marketing.
You don’t need trucks or truck drivers, planes or pilots, gas and spare parts or sorting machines, baskets, factories, warehouses, maintenance teams, toilet cleaning supplies, or large benefits networks and bank reserves to keep an email going from point A to point B. That’s not to say that digital marketing firms don’t grow to a massive size. No. Digital marketing firms can come in all shapes and sizes. But the postal service doesn’t. It takes a big, clunky, diverse, and widespread organization to make sure mail moves around the country and world. We haven’t seen an alternative business design spring up to correct that yet. Digital Marketing can prove to be more innovative because it is cost competitive. The overhead offers businesses options to maximize their marketing budget dollars. A good product and a well tailored campaign can see a great return. Allocate wisely. Go Digital.