The appropriate level of Marketing Investment

Investment is the pivot of every business. The amount may differ from place to place and the business type.

Introduction: Investment is the pivot of every business. The amount may differ from place to place and the business type. Return on Marketing Investment (ROMI) is a general term used in reference to online marketing which is used to estimate the outcome of a particular marketing campaign. There is a definite allocated budget for investment in marketing and it is recommended to make it judiciously used, in order to get the target range of profit. Marketing is the key function ensuring the success of the business in this competitive era.

The investment level which is appropriate for the investment in marketing thus requires due attention.

The investment depends upon the choice of marketing media used. It is a general practice to justify the investment by Return on Investment as an outcome. With the cost reduction agenda, the budget for marketing is squeezed sometimes. This leaves the markets to make try to maximize the ROI within the budget.

At present days we have a wider range of media access and a variety of marketing activities, so the whole outcome cannot be estimated by ROI alone. The pace to learn and adopt the effective marketing strategy most suited to the business type need to be very quick to cope with the competition in the market.

Investment according to Turnover: There are more media options available so we must try for a majority of them to produce results. This can be obtained in a linear relation form till the occurrence of the infection point. On a particular trial of a media, the minimum investment is to be initiated and the effect must be measured in terms of corresponding revenue increase. With desired revenue increase we must increase the investment till we get a saturation point after which more investment will not yield to increase the revenue.

Investment according to ROI: ROI is dependent on the investment made; it reaches its peak at a level. This relation is not linear over the entire investment. So due mathematical calculation is required to decide the optimum level of investment. Optimization is required for various available options to be used in order to maximize revenue. Relying on only a single one is not recommended and adopted as in order to make reach to the larger audience all potential channels need to be adopted.

The decision of the right amount of investment in the right media is to be carefully taken by Online Marketing experts, as it is not justified to over-invest in one media beyond its saturation point.

Ideal Investment Level: There is not only a single factor that can justify the investment level, as ideal investment depends upon multiple factors such as the company’s objectives, product in consideration, demographic location, targeted audience, a span of marketing, etc. It is not an easy task for a Digital Marketing Service Company to randomly select the right media but experience in the field and detailed information about the company objectives helps a lot to get a justified investment level to predict. Conclusion: in order to be effective in marketing the expertise in exploring the various media channels helps a lot. There is the need for an in-depth study of the process and random pumping of budget in single media can be risky so the optimum or saturation level estimation and using relevant media platforms to cater to the objectives of the organization. This is to be taken into consideration whether marketing is to do with an objective to get better ROI or focused on Profit.

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