Limited Marketing Budget ROI

Ever wondered why old fashioned businesses dread to invest in advertising?

Firms are scared to invest in the unknown, and as we all know, marketing isn't exactly the most predictable science.  Due to prior misplaced ads, companies become reluctant to put a real investment. 

Here's a tip to better invest your marketing dollars:

Make sure that a fair amount of your reach get enough frequency to get converted into a potential lead.              

 Think of it this way, if you aim for a return on your limited marketing investment, you will have to translate your advertising into sales. >>>>To be able to gain sales, you need to really impact your target audience. >>>>If your advertising dollars are spread out too thin over a large period of time or over a large audience, they are likely to go to waste.

To say it clearly, if you are on a limited budget, try to limit your target audience and increase frequency over a short period of time, for better marketing ROI.

Measuring Your Marketing Efforts

I have been reading about economics in relation to marketing. In general, the marketing effectiveness is measured as a relation between the marketing budget invested and the sales returns. The formula is simple MR=MC.

Sounds logical? Maybe, but it isn't quite so.

Marketing efficiency depends on the marketing campaign's success. A marketing budget is only relative to the marketing costs (graphic designer, medium, marketing research... etc) which in their turn change under different settings. Meaning? The same marketing budget can be translated in campaigns of different sizes, depending on the market costs. Thus, a marketing budget is irrelevant in the calculation of marketing efficiency.

Moreover, sales in $ is not representative of the response to the marketing efforts. The same amount, let's suppose $3,000 of total sales, can be a sale of 3 products of a value of $1,000 each or 300 goods costing $30 each. Moreover, the profit margin on the products can be different; thus looking at the sales profit makes things even more complicated.

The real criteria that one needs to look into are frequency and reach of the campaign...