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Question - Topics: Advertising, Marketing
GEO: World Wide
ManzanitaBeach

Joined: 2016-05-21
Location: United States
Points: 12 | Trainer

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Posted On: 2016-05-21 01:17:10
Viewed: 564
What percentage of my profits should go towards advertising?

I am a small business owner, trying to figure things out in this digital age of SEO and all the rest.

My question is this: as a general rule, what percentage of profits should go towards marketing and advertising?

Answers & Comments: 22

GurdMuller


Points: 84 | Teacher

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1 week 2 days ago

I would say 10% of your Sales, not Profits, should go to Advertising.
Since Advertising is one of the Key elements in making Sales and growing Sales possible.
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Fardoush 1 week 1 day ago

I think 10% is too much.
5 to 7% Max should go toward Ads. But more like 5.


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bkkescortmodels


Points: 13 | Trainer

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1 month 3 weeks ago

It depends on your product or service and how much your competitors advertise. If you are new you have to spend more than them.
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Sherpa


Points: 10 | Trainer

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6 months 1 week ago

I would first start by analyzing what the average lifetime value of a customer is. This will help determine an advertising budget.
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WirSind 6 months 1 week ago

Yes, and that is why most Small Businesses never make any Profits by Advertising on
Google or Big Wall Street Media, since the cost of Advertising via these Big Wall Street
Media outlets generally exceeds the profit potential per Customer earned via these
Advertising.

Dano11 5 months 1 week ago

First year you should put back into your business 150% of your profit in order to have
lasting business

WirSind 5 months 1 week ago

Dano11, makes very good advice.

Dano11 5 months 1 week ago

You should think of your first year as lost and advertise , advertise , advertise, that is
the key for the business to be successful by doing this the business will pop remember the
key is to advertise 150% of your profits for the first year. It will work

Dano11 5 months 1 week ago

If there is no profit you should put as much as possible into advertising no percentage
just as much as you can do the more you can advertise the more will come back as profits
I have never heard of over advertising just bad advertising that why we custom fit
companies so they get what they pay for nothing crazy just down to earth advertising.

Sherpa 5 months 1 week ago

Whatever amount invested in advertising, it is critical to monitor of effectiveness of
each advertising effort. At some point you want to stop investing in low performers and
redirect that money to top performing advertising/marketing channels. The value of a
customer remains important: If the value of customer is $100 and you're spending $200 to
convert, you'll need to get that conversion cost down.

WirSind 5 months 1 week ago

I quite agree with Dano11 that during your 1st year, and really 2, you need to spend at
least 150% of your projected Sales on Advertising. Think of it as investing in your future
business growth and profits.

On that note, what do you all think about Advertising on this not-for-profit Anoox
search engine?


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uk_man_009


Points: 9 | Trainer

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9 months 3 days ago

I think you should really think of What percentage of Sales should go toward Advertising, since many businesses do not show any profits for some time before they become cash flow positive.
And on that note, I think you should budget to spend 15% of sales on Advertising toward a growing viable business. So then the next question becomes, where you should spend your Advertising Dollars or Euros on, because not all Advertising are equal. And on that note, I say this Anoox offers the best Advertising value by far, that is compared to Google, etc. because amazingly Anoox is operated on not-for-profit basis so that they give us small businesses a real low cost Advertising option which we did NOT have until Anoox. Now I am not saying that put all your Advertising money into Anoox, but it should certainly be a key part of your Advertising buy. Hope this Helps :)
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Regal 9 months 2 days ago

I totally agree with U that the more appropriate focus should b on what % of Slales should
be set aside for Advertising and not what % of profits. Since many specially start ups
have little profit until few years into business which business will only become
profitable if they have been Advertising the necessary amount.

WirSind 9 months 2 days ago

Uk_man, I also agree with these key points:
1- to have a viable healthy business one needs to allocate 15% or so of Gross Sales to
Advertising
2- Question then becomes where to Advertise
3- If you are Wall Street funded business, Google is way togo. But for a small business
Google Advertising will easly take 300% of sales which is not realistic. Which is why
Anoox Advertising is so great since it is only not for profit search engine to give small
business low cost Advertising

uk_man_009 9 months 2 days ago

WirSind; Yes exactly. I could not agree more with all 3 points you have made. In regarding
to the 3rd point, it is amazing how many people I know have not heard of Anoox and the
fact that it is a not for profit search engine to give much lower cost of Advertising
possibility to small businesses. Now I see you are from Hamburg Germany, how about people
you know? That is do you run into many that know of Anoox?

WirSind 9 months 1 day ago

UK, when I joined Anoox a few Years back, there were few people here in Hamburg that knew
of Anoox. So they would always ask me what it is and why I joined it. But now a days, I
meet more and more People who are aware of Anoox and realize that it is best option for
Networking with new People and getting more Free well as paid Traffic. People here in
Hamburg and Germany at large, really appreciate that Anoox is not another Wall Street
company like Google, McDonald, etc.

patrice711 1 month 2 weeks ago

If you are sure of your SEO strategy i would recommend investing everything in SEO,
because once you start draining organic trafic, it won't cost you anything any more. The
main problem is that you don't get instant returns, so you might have to wait a year or
two before starting to see the effects...
I have invested a lot in Google AdWords and for me it was a total failure. Google
Shopping gives good results.

Regal 1 month 2 weeks ago

1st, I had the same experience as you with Google AdWords. That is it was TOTAL ABSOLUTE
failure, as it produced no new sales or leads for us, but it frustrated us to HELL to use
it as we had to deal with Support out of India, Philippine, etc. whose language (accent)
we could not understand. And then Google kept charging us, and when we contacted them to
cancel, they kept putting us on Hold and then Hung up :(((

I think this Anoox non-profit Advertising is best. What you think?

WirSind 1 month 2 weeks ago

We had the same disappointing and rather hellish experience with Google, from their
support staff whose accent we could not understand to Google charging us over and over
with no way of canceling out on our own and no answer from Google support :( And to
think that they are 200-Billion company!

As for Anoox Advertising, I am also curious to know how others think of it?
Sounds very interesting.


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Roblon


Points: 9 | Trainer

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9 months 3 days ago

If it was me I would invest half of my profits when first starting out.
Robert Allan
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mrmel


Points: 12 | Trainer

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9 months 3 days ago

I always feel to re-invest your first earnings if you can. Then afterwards, at least 30%. More if you can.
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rog1_uk


Points: 3 | Trainer

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9 months 3 days ago

Any business needs growth and you must put all back in to be successful at the start !
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