How do I choose a marketing channel?
You always need to start with your target audience by defining who they are, how they spend their time, and what influences their decision to buy. Once you have the persona mapped out, you evaluate marketing channels (of all kinds, not just paid ads). List out these channels and assess the minimum investment needed (including costs for creative production) for each and calculate the cost-per-thousand. Do research on the channel(s) on has worked for others, what hasn’t, and why. At this point, you should have a pretty good idea of where to start.
How much should I spend on marketing?
Your investment in marketing starts with the lifetime value of your customer. What is the average purchase of your customer and how long do you expect them to be loyal to your brand? Knowing the LTV will give you an idea of how much you should spend to acquire a customer (CAC). Some experts say you should spend 15% of the LTV for CAC, but if you are in a stage of growth it can be higher. If your new to the market, you need to consider the associated “cost” of getting your name out there. Once your brand becomes known, you can look at your marketing spend as an investment that will bring in return.
Take a look at your business objectives, not just marketing expectations. At what stage is your business? Are you a seed, start-up, growing, expanding, or mature? How big is the market and who are the competitors? Factors that drive up the marketing investment are competition, brand equity, and market coverage.
Tactics and channels perform differently and the buying of marketing channels is different. Some channels/tactics require minimum investments and some need long term commitments. So take a look at what you can really afford at this time, what you expect for a return on that investment, and be sure to set your expectations right on when the return will hit the bottom line. If you have a long buying/sales cycle, you have to plan to not see the return until the cycle is complete.