What To Do With A $100, $1,000, $10,000, Or $100,000 Marketing Budget

by Dave Bascom


The title of this post is a bit misleading. I am not going to tell you exactly what to do with your marketing budget. I don’t know your business, and because marketing boils down to understanding specific buyer personas, I can’t tell you the best way to reach each of them.



Marketing Budget



The goal of today’s blog post is not to tell you how to spend your money. Rather, we want to teach you how to think about your spend. This blog post’s headline is a bit of a trick question.


“What do you do with a $100, $1,000, $10,000 or $100,000 marketing budget?


The answer is the same at all four budget thresholds: you do everything you can to optimize your ROI. You spend as much as it takes to drive meaningful profit margins.


Lesson 1: Marketing Budgets Are False Constructs

Marketers are inclined to believe that marketing budgets keep business risks to a minimum. To some extent, this idea is true. You wouldn’t sail across the world without charting your path first. You wouldn’t throw darts in the dark.


A $100 marketing budget will allow you to test new advertising channels and campaign ideas. You’ll quickly learn the ropes and evolve that spend into $1,000. When you’re able to validate an ROI at that level, you can release the floodgates to boost your spend to $10,000 — then $100,000.


What you’ll quickly learn is that your marketing budget doesn’t really matter. If you spend $1,000 and lose $1,000, you’ve still lost $1,000. If you spend $100,000 and make $101,000 — you’ve made a $1,000 profit.


Underwater Audio, a company that sells waterproof iPods, exemplifies this trend. The company’s founder, Scott Walker makes it a point to leave the company’s PPC budgets uncapped.





“The guiding principle for advertising spending since we started Underwater Audio is not to cap our budget,” Walker said in an interview for Dell’s TechPageOne website. “As long as you’re making more than you’re spending, you should feel good about your investment. It’s like a money machine.”


As Walker implies, Underwater Audio will spend — whatever it takes — to make a profit.


Lesson 2: Add value at every stage of the buying process

I’ve got some bad news: Not everyone that comes to your site is ready to buy.


In light of this fact, you need to be certain that you are offering some sort of value to people that aren’t ready to buy. This could come in the form of interesting blog content, a eompelling infographic, or an encompassing piece of premium content.


Zibtek, a company that provides businesses with teams of U.S. managed international developers, recently created an ebook to educate website visitors about how to nail a minimum viable product.




Cache Merrill, the company’s founder and CTO, said that within the first week of the ebook being on the site, he started to notice people were downloading it almost immediately after speaking with him on the phone. He said it was good way to gauge how interested the prospective customers were, and he was happy to be able to provide them some value when they went to his site to learn more.


Regardless of what budget you’re working with, if your mindset is always, “How can I provide future customers with something of value?” you will end up delighting prospects as well as your bottom line.


Lesson 3: Quality Is Everything

It doesn’t matter what you’re spending on marketing. Every dollar spent must have a clear objective attached to it. Usually, this is translated the ROI that you earn. As a marketer, your goal is to generate the highest value leads and sales at the lowest possible cost.


Especially when it comes to lead generation, ‘spray-and-prey’ is a marketing technique of the past. Consumers demand quality — and that’s a good thing for marketers who are looking to focus on fewer, higher value customers. Shopify is a great example of a brand that is constantly putting out high quality marketing materials, how-to videos, and guides for its e-commerce clients:





AdWords quality scores provide a key example of this principle in action.


For those unfamiliar with AdWords — this paid advertising channel allows marketers to purchase advertising spots at a cost-per-click (CPC). These rates are auction-based and vary based on demands in the marketplace (i.e. popularity of the keyword and seasonality, for instance).


Google wants to maintain a high quality experience for both advertisers and customers. That’s why the AdWords platform weights landing page quality as a variable that affects CPCs. In other words, higher quality scores mean lower CPCs.




Let’s say, for instance, that you are paying a CPC of $0.05 and that your high quality score brings your CPC down to $0.04. A penny, at first glance seems like — well, a penny. Let’s say, however, that you scale your marketing campaign to one million clicks. A $0.05 CPC translates into a $50,000 spend. A $0.04 CPC? That’s a $40,000 CPC. With just a penny’s difference in CPCs, you’ll save $10K (which you can reinvest into amplifying your marketing).


Lesson 4: Prioritize Learning

No matter what you’re spending on marketing, learning should be a key priority. The fact is that not every test will scale successfully. You might end up blowing through a $10K spend. Six-figure budget blunders happen more than you may realize.


Hopefully, you have safety mechanisms and checkpoints in place to avoid disasters. But if something goes wrong, your best solution is to embrace the learning opportunity. Ask yourself the following key questions:


  • What went wrong?
  • What processes or systems need to be put in place?
  • What learnings can we apply to our next marketing spend?
  • What additional metrics or KPIs should we be prioritizing?
  • Are there any leading metrics we can track that we alert us to trouble before it is too late?
  • What wasn’t a fit with this marketing channel?
  • What marketing channels might be a better fit?
  • Were your goals unrealistic or out of reach?


Mistakes are what cultivates a marketer’s strongest asset — the ability to think quickly and be extremely agile to the rapidly evolving digital landscape. Remember that what you learn now can help you recuperate costs down the road.


Let’s say that you spend $10,000 on a paid channel spend that is slightly unprofitable. Instead of shutting down the campaign, figure out what adjustments you can make to improve the efficiency and ROI. Over the long-term, you’ll make your money back.


Final Thoughts: Plan for the Long-Term

The marketing landscape is becoming increasingly competitive — and competition for your audience’s attention is fierce.  Initial sales are only half the marketing equation. The more you’re able to retain long-term customers, the more efficient your marketing spend will be. In addition to reaching new customers, smart marketers will also invest time, energy (and budget) towards re-engaging past customers. Lessons 1 through 4 will be crucial here.




Dave Bascom is the CEO of Fit Marketing. Dave has been doing SEO since the pre-Google days, helping top companies like Dell, Volkswagen and Mrs. Fields get found online.






Photo Credits

Ricardo Villela| Courtesy of Dave Bascom