Marketing Expenses: Methods, Examples and Importance

By Indeed Editorial Team

Published June 15, 2021

Marketing and promotional efforts can help businesses grow their customer base and increase brand recognition. Like most business operations, these efforts can cost money and companies usually consider these expenses in their budgets. With organization and planning, you can track expenses and stay within a predetermined budget. In this article, we explore methods for tracking marketing expenses, provide eight different marketing expenses with examples and explain the importance of tracking them.

What are the methods for tracking marketing expenses?

Creating a marketing plan includes developing budgets and tracking marketing-related expenses. Here are two specific methods for tracking marketing expenses:

Allocation approach

This method suggests that companies allocate or set aside a specific amount of money for an area of the business. For example, the amount set aside would specifically focus on promoting marketing efforts. Then the marketing team can determine how to divide that money among each of the expenses in their plan and adjust the plan as needed to fit within the budget.

Expense-first

This method recommends that companies establish a list of what they want to accomplish in an area of business in the next year, which, in this scenario, refers to marketing goals. Then the company can estimate how much money accomplishing those goals could cost. Depending on the estimate, revisions or adaptations to marketing, changes may occur until the team feels the plan is financially feasible.

Related: What Are Expenses?

8 types of marketing expenses and examples

Marketing expenses are any costs that occur when promoting a company and its products or services, which can include expenses from both traditional and digital marketing efforts. When strategizing for upcoming marketing budgets, it can help to understand the different expenses in order to consider how each one fits within your budget. Some marketing categories and expenses can include:

1. Advertising

Marketing promotions may focus on using advertising to bring attention to the brand or the products and services it can offer. Advertisements may use traditional marketing, digital marketing or both. For example, you may consider using a combination of both print and online advertisements. Examples of potential advertising efforts to consider in marketing budgets are:

  • Newspapers and magazines

  • Billboards and posters

  • Direct mail and email

  • Television and radio

  • Social media and pay per click

The advertising efforts a company focuses on may differ depending on its goals and the best way to meet them. For example, a company wanting to bring more attention to its website might use pay-per-click advertising to promote it. Pay per click refers to promoting your company's website on search engines and paying a set amount each time a customer clicks on the ad, which is usually near the top of the search results. The costs for advertisements may vary depending on the slot, required software or production materials.

Related: What Is the Difference Between Marketing and Advertising?

2. Printing

Print promotions are a major component of traditional marketing strategies and can distribute information to consumers in a tangible way. Some print marketing efforts in business plans may include:

  • Brochures

  • Flyers

  • Posters

  • Business cards

  • Catalogs

  • Banners

These print items may vary in cost depending on dimensions, color or quantity.

3. Design and Development Services

Marketing teams may need the expertise of different individuals to help reach their highest return on investment (ROI), which can include contracting:

  • Freelance designers or artists

  • Freelance developers

  • Freelance writers or editors

  • Paid advertisement consultants

Contracting specialists can provide marketing benefits if companies have a specific goal they're interested in reaching. For example, if they wanted to gain more traffic on their website, it may benefit them to contract a search engine optimization (SEO) specialist. These professional service providers might require either pay per hour or per project.

4. Promotional merchandise

Company merchandise can help increase brand recognition and provide opportunities for organic marketing. For example, suppose a company sells sweatshirts with its logo and someone who sees it looks up the brand, browses the products and makes a purchase. Examples of promotional merchandise are:

  • Clothing

  • Office supplies

  • Sunglasses

  • Bags

Merchandise can provide businesses with daily advertising each time a consumer wears their clothing. Materials like these might also benefit a business's efforts to expand brand awareness if they're hosting or attending events because they can sell or give away merchandise to event attendees. Costs for each may depend on production or quantity.

Related: What Is Branding? Why Branding Is Important for Your Business

5. Tools and technology

Tools and technology can help marketing teams streamline operations and create high-quality promotional materials. Commonly used tools and technology for marketing are:

  • Design software: Marketing teams can use digital design software for graphic creation, photo alteration, video and audio production or animation.

  • Website domain: A site domain is the key point of access for consumers to reach a business's official website.

  • Automated platforms: Automation platforms can help streamline promotional communications because it eliminates having to send these communications manually.

  • Customer relationship management (CRM) systems: CRM systems provide teams with a central place to manage customer experiences and interactions.

These tools and technology may charge monthly or yearly service fees.

Related: Guide To Understanding Types of Marketing Tools

6. Equipment

Creating marketing and promotional material usually requires equipment like:

  • Computers

  • Smartphones or tablets

  • Printers

  • Cameras

  • Video production light or sound devices

  • Monitors

The physical equipment that a company's marketing team uses can vary depending on its specific marketing goals and needs. For example, if a company includes producing a new commercial in their budget, then they're more likely to need video or audio production equipment. Teams may use company equipment or rent equipment as needed, which can influence equipment costs.

7. Research

Research is important for developing informed marketing and promotional campaigns because it may result in a higher chance of reaching target audiences or persuading customers to engage with a product or service. Research costs might include:

  • Access to reports or journals

  • Developing and distributing surveys

Research material or software costs might charge per individual use or charge a fixed service or ownership fee.

8. Event expenses

It's important to remember that even if your company doesn't host events, it may still incur event expenses from attending events. Comprehensive event expenses can include:

  • Registration fees

  • Travel expenses

  • Booth or display costs

  • Supplies for hosting events

Depending on the location and length of an event, the costs a company pay can vary for both attended and hosted events.

Importance of tracking marketing expenses

Tracking expenses can help marketing teams plan and prepare for upcoming operations and stay within their established budgets. Tools to help track your business's marketing expenses include:

  • Templates: Budget templates can help monitor and track expenses from day to day and provide something for marketing teams to reference when making decisions about future expenses.

  • Spending management systems: These systems track all company expenses in one place and provide each team member with real-time budget information.

Expense tracking tools can also help marketing teams keep their budgets up to date and avoid confusion about what they have left to spend. Another reason it's important to track marketing expenses is that expense numbers can contribute to marketing analysis by providing a cost to compare to success. For example, if one marketing initiative did well and another didn't, it might be beneficial to compare the cost of each to see if the financial cost might make a difference in campaign success.

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