Marketing Costs For Small Businesses: Negligible, Expensive, and Prohibitively Expensive, But Never Free

Most people want to promote their business for free. But the concept of free and to determine the true cost of marketing is very complicated. When it comes to cost, don't be too quick to count it in actual currency. Count cost in resources plus currency.

Some examples of resources are time spent on the marketing, effort of skilled labor, and employee time for which you are paying. And very importantly (almost most importantly), if you choose a wrong marketing strategy, the cost for that mistake is all the revenue and new clients you missed out on during the weeks and months it took you to execute that incorrect marketing strategy and realize that it isn't working.

Now that we established a broader view of cost, let's examine the kinds of costs.

Negligible costs

Actions such as tweeting something or posting a Facebook update, take almost no time and are something people can do during their breaks. The costs in this case are truly negligible. But often so are the results. What does a single tweet get you? Not much at all. And the same is true for a Facebook update.

True marketing cost: almost always expensive

It doesn't matter if you are doing online marketing or offline marketing. To truly market and promote your business you will have to put serious and often long-term effort into it. That means your creative energy will go into marketing and not other parts of your business. It also means that you risk months of effort. And results don't always follow.

For example, SEO (search engine optimization) takes months to show results, door to door marketing takes full days of going door to door during which you cannot do anything else to help your business. PR and social media marketing also take time until you can get press attention or grow a large social media following. And in the best case scenarios, it isn't even certain whether those efforts will bring in paying clients after the marketing campaigns are successfully executed.

As mentioned earlier, all the time and effort needed to give your marketing campaigns a chance is very costly. So choose your marketing strategy wisely and very carefully. Without growth and clients, there is no business.

Some marketing is prohibitively expensive

Many forms of paid marketing are prohibitively ineffective. If a free (meaning it does not cost actual money to place the ad) marketing campaign gives you some lukewarm results, it may be ok to keep using that technique because at least it gives you some clients. But paying to place an ad that gets the same lukewarm results makes that marketing prohibitively inexpensive.

This concept can be applied to many forms of paid marketing. A good example of prohibitively expensive marketing is SEM. SEM is the process of paying Google to place your ad next to search results and pay them for each click-through onto your website.

Considering that most people visit your site and quickly leave, if a click cost $0.05 then it is almost negligible because the cost is so low, and you get those users immediately without having to to wait for a marketing campaign to take months to get you site visitors as you would have to wait in case of SEO. But if the same click costs $2.00 (which is closer to the actual cost) then paying that much for hundreds of clicks can quickly become expensive for a business. And to have that marketing campaign produce thousands of visitors over time, the cost becomes quite prohibitive unless your business model supports it. But few business models support such expensive marketing costs.

Summing up

Next time you try to think through how much a marketing campaign may cost, never use the word free in your vocabulary. Try to stick to negligible, expensive, and prohibitively expensive.

Further Marketing Resources

For more about blogging, check out the Wikipedia entry on blogging and the main blog about blogging with blogging tips for beginners. One site you might find helpful are SEO Moz to learn about SEO. Another site that might be helpful is Mashable which focuses on social media marketing. And here are some more marketing videos that you might find helpful.

Article by Alex Genadinik