Team of women discussing if marketing is an investment

Marketing is an Investment, not a cost

Marketing is an investment into the brand and its future. 

Before we discuss exactly why marketing is an investment for a brand rather than a cost, it’s worth unpacking the difference between the two. 

Commodities are a cost. Water, electricity, rent, professional fees, technology tools – essentially the items that no business can do without but don’t, except perhaps very indirectly, return any value back to the business.

An investment, on the other hand, is spend that is expected to return value. It’s stocks, products, resources that scale and solutions and services that deliver a return to the business – known as return on investment (ROI). 

Marketing certainly comes at a cost, but is it a commodity? Some businesses will say yes, others categorically no. What is undeniable is marketing is an investment. 

Marketing delivers measurable returns to the business. But if the business sees marketing as another line on the budget sheet, as a ‘grudge spend’ that is always seen as an expenditure, then this can impact on the efficiency of marketing. Restrictive budgets and poor line of sight into overall business strategy can, all too often, result in lacklustre campaigns. And, budget definitely impacts on marketing strategy and creativity – the same budget often leads to the same strategy, and simply more of the same. 

When marketing is seen as an investment into the growth of the business, as a cost centre that delivers a return on cost, particularly in measurable ways, internal attitudes and strategic approaches tend to reflect this view. 

Proving marketing is an investment, not a cost

The first step is to implement toolkits that allow for marketing, procurement and finance to fully realise the value of marketing spend and investment. This means putting systems in place that allow for teams to track and monitor marketing spend and use the data generated to refine and hone spend moving forward. 

ROI should not just measure how well a campaign performed. It also includes the cost to realise the campaign itself, however this part is often overlooked and not built into the true ROI.

When marketing teams have visibility into how their spend delivers measurable value to the business, they can translate this into metrics and key performance indicators for the C-Suite. And, when the board can clearly see the value, they are more likely to engage with marketing. And, that’s when the business strategy, creativity and vision can truly align.

CMOs with this level of insight are also more likely to try out new ideas, explore new markets, track and monitor their results, revise KPIs, and use data and benchmarking to determine the true impact of their marketing investment. 

Data empowers marketing and the business

Data is perhaps one of the most powerful assets available to marketing teams. It can be used to shine a spotlight on how marketing engages with relevant markets, meets campaign targets, aligns with business strategy, makes the right decisions and chooses the right agency partners.

Using the right data, marketing teams can focus their expenditure in the right place and empower negotiations with their roster of agencies. With access to benchmarking data marketing procurement teams have a detailed yardstick against which to measure their spend and ROI. Demonstrating that marketing is an investment, with data and analytics.

Data is also used to track, monitor and evaluate performance;  assessing how well spend, campaigns and agencies are performing. In the same vein, data can be used to assess where marketing spend will thrive, and how to best optimise to deliver an advanced ROI before any campaign activity is even undertaken. 

When decision makers have transparency into marketing costs and how they track back to brand strategy and deliverables, then they can change how marketing is perceived as a whole. Using tools to dive deep into the data changes the entire dialogue around marketing as a cost versus an investment because an accurate picture can be painted – one that’s measurable and relevant to the business, and, of course, pays for itself in the value delivered. 

Using the right tools, approaches and data, means the ROI conversation becomes a holistic ecosystem of return and value that benefits both business and marketing.  Smart use of data embeds ROI into every part of your evidence that marketing is an investment.   



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