September 4

How Much Should You Invest In Marketing? (PROVEN Strategy)


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Hey everyone, it’s Neil Patel here for another q and a Thursday video. I’m here with Adam LoDolce from

This week’s question is:

This is from Sagar Sangam. Thank you for your comment and your question, and this is a simple one, but I’m interested in getting Neil’s opinion. How do you decide on a marketing budget? For a startup, it’s hard to convince his boss to invest in marketing.

As a startup, you should invest only small amounts of money on marketing. I understand as a startup you need to invest in growing. If you’re venture funded, that’s a whole different story. Based on the question, it looks like there wasn’t a ton of money there, so what I would do is as a startup, I would run small experiments. 50 bucks, 100 bucks, a lot of little ones, until you find things that are working and getting traction.

That traction, whatever that marketing effort is, it doesn’t have to be profitable. More so, you have to be getting traction from it. So if it’s driving a lot of traffic and sales, even if it’s not profitable yet, but you can see how you can fine-tune, improve your convergence, eventually make it profitable, cool. Double down on the ones that have potential. The ones that don’t, put them off to the side, don’t bother your time spending trying to tweak or modify them, just go after the ones that are already showing somewhat of a traction, double down on them, grow them, get them profitable, and then when your boss will say if something’s profitable, he won’t be like, “Hmm, I don’t know if you should spend 10 grand “or 100 grand.”

If you’re spending a dollar, making two dollars for every dollar you spend, your boss is gonna be like, “How much can you spend?” Because you pay your credit cards 30 days later, so it’s not like your expenses are hitting you up front. A lot of times, your cash is coming up front. If it’s not, but a total of the lifetime value of the customer, if it’s profitable, you can easily get investor dollars. VCs will gladly write a check if you’ve already figured out the economics and your marketing and scaling it up. So as a startup, you shouldn’t have crazy marketing budgets.

It’s not about, “This quarter we’re gonna spend this. “Next quarter we’re gonna spend that.” You’re venture funded, sure you can try all that stuff out and have your quarterly budgets, but as a startup that’s bootstrapped or with very little money, go and just run very tiny experiments with very little cash. From there, you’ll figure out what’s working. Double down on that. All the stuff that’s not working come back to it later on, maybe six months or a year from now.

One number that I’ve always looked at a lot in my business, whenever I think about especially pay-per-click advertising, how much money to put into that, is how quickly can you recoup that money. Like Neil said, if it can be done within 30 days, that’s amazing. Just recoup the money and keep reinvesting, and then before you know it, within a year, you’ve built a really big business, but if you can get that done in seven days, then just sky’s the limit.

That’s the value of branding, that’s the value of doing billboards, television ads, creating press. It’s really hard to track, easier for larger corporations because they have huge budgets like the Geicos of the world where you see all their television ads. I think they spend over 100 million a year on TV ads.

There you go, you have a question, you want an answer, next week’s q, and a Thursday video. Leave a comment below, I’ll answer it, and it may show up on next week’s video. In addition to that, please like, share, comment, subscribe. Appreciate you guys watching. Thank you.


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