Over the past few years I’ve become very interested in investing. Stock market, property, cryptocurrency, it’s all fair game and interesting to me.

This is partially why when I speak with marketers and founders (especially founders), I notice often that their mindset and approach to marketing is one of marketing as an expense instead of as an investment.

As 3xcorp says so well:

An expense costs you money; an investment is supposed to make you money. When viewed as an expense, spending money is perceived as a necessity, a cost of doing business, something you want to be as small as possible. But when you make an investment, it’s an option, a choice you make, one you hope pays for itself quickly and helps to propel the business forward.


As an attempt to begin changing minds and hearts and helping us all do a better job of allocating funds in our business, I want to unpack some main investing principles and how they can help marketers when thinking through deploying budget.

To do this, I am going to outline Vanguard’s “Principles for Investing Success” and then talk about what this means for your marketing approach.

Create clear, appropriate investment goals

Vanguard says this:

An appropriate investment goal should be measurable and attainable. Success should not depend on outsize investment returns or impractical saving or spending requirements.

Defining goals clearly and being realistic about ways to achieve them can help protect investors from common mistakes that derail their progress.

The same is true for your marketing. When investing in marketing it shouldn’t be able hitting a certain or arbitrary CAC or a specific ROAS or ROI that was established without knowledge of your own metrics by marketing channel.

Instead, your goal should be measurable (“10,000 sessions from Google Organic in 6 months”) as well as attainable (asking “Is this possible?”). Reality is that your goal will determine attainability. It may be possible to attain an additional 10,000 visits via SEO over the next 6 months, but it may not be. It would be easier to determine how to do that with Google Ads, but it may also be prohibitively expensive.

As Vanguard says so reasonably, “success should not depend on outsized investment returns.” I have had many conversations that go something like “We want to get 100 clients from PPC, but we only want to spend $1,000 per month. The right consultant/agency should be able to do that, right?”

Wrong, probably. We still don’t know the time horizon of the above.

The reality is that clicks in different niches cost different amounts. If you have a 10% conversion rate, you need 1,000 visits on average to get 100 new clients assuming your conversion rate holds steady.

If your goal is 100 clients in a month at a $1,000 spend, that means you need clicks for $1 each. And don’t forget that you also need to pay your marketing provider, so realistically on a $1,000 ad spend add on another $500. So now you need clicks for $0.66 each.

Whether this is realistic or not depends on your market. But it’s probably not. And expecting it or searching for someone who can get you that is not solid investing.

Develop a suitable asset allocation using broadly diversified funds

Vanguard says this:

A sound investment strategy starts with an asset allocation befitting the portfolio’s objective. The allocation should be built upon reasonable expectations for risk and returns and use diversified investments to avoid exposure to unnecessary risks.

Both asset allocation and diversification are rooted in the idea of balance. Because all investments involve risk, investors must manage the balance between risk and potential reward through the choice of portfolio holdings.

For applying this to marketing, “asset allocation” is budget and “diversification” is your marketing channel mix.

Getting the needed results with marketing is all about leveraging the right channels at the right time. In the marketing world, we call this your “marketing mix.”

There is no “best” strategy or “best” channel for every business. There are channels that work better or worse as a generality for different types of businesses, but the strategy that works for you will almost definitely be different from another business and even your competitors.

The way I think about constructing a marketing mix involves:

  1. Determine what is likely working for your competitors (SEO, PPC, etc) and compare that against the knowledge you have in-house and what has been working for you thus far.
  2. Make sure you are measuring return and CAC, not just traditional metrics like traffic or ROAS, by channel so you can identify which ones are profitable or not.
  3. Once you have 1-2 channels working that are repeatable and profitable, then allocate budget to new channels (“risk”) and find a seasoned operator to run it for you. Manage their metrics closely to determine as soon as possible if the channel is going to work for you or not (minimum 3 months, ideally 6 months).
  4. Rinse and repeat with new channels.

You won’t establish the right mix from the start, but over time you should be getting closer and closer and your results getting better and better.

Minimize cost

Vanguard says:

Markets are unpredictable. Costs are forever. The lower your costs, the greater your share of an investment’s return. And research suggests that lower-cost investments have tended to outperform higher-cost alternatives. To hold onto even more of your return, manage for tax efficiency. You can’t control the markets, but you can control the bite of costs and taxes.

This is a tough one, but I understand where Vanguard is coming from. Ideally, spend will scale up and down with how much effort a marketing provider is putting into your account.

In the finance world, it makes sense to look for as low of fees as possible to a point. I do firmly believe that “you get what you pay for”, but when you’re getting the same thing and all else is equal it makes the most sense to go with the lowest price.

That said, I can think of very few instances where “all else is equal.” When it comes to paying a provider for providing their marketing services to you, you should take the following into account:

  1. The scope of what they are offering
  2. Their experience doing it. More experienced providers will charge more than less experienced because they already have the experience and you won’t be paying them to learn.
  3. Your budget and what will still allow you to profitable on the channel even after their fees (this is often overlooked)

A lot of money experts like to point out that many money managers often fail to beat the market and their fees lower your lifetime return by (insert amount here).

While these experts are right that many money managers fail to beat the market, what they don’t point out is the cost of not being in the market at all. Research shows us that when people try to manage their money themselves, they put off things like investing proactively and they end up getting a worse return than if they used a money manager.

The same is true for marketing. We often get told “Oh we’re going to do it in-house”, and then 6 months later they’ve done nothing and their metrics haven’t moved.

In fact, I ran the numbers about a year ago to see how companies who hired for SEO through Credo vs companies who looked but never hired (as far as we know) did over the next year.

What we found was that companies who hired an SEO agency from Credo saw about a 50% increase in SEO traffic on average, whereas companies who didn’t hire through Credo saw on average about a 20% increase.

The cost of not investing is very real.

Maintain perspective and long-term discipline

Vanguard says:

Investing can provoke strong emotions. In the face of market turmoil, some investors may find themselves making impulsive decisions or, conversely, becoming paralyzed, unable to implement an investment strategy or rebalance a portfolio as needed. Discipline and perspective can help them remain committed to a long-term investment program through periods of market uncertainty.

I think this one is extremely salient to marketing as well and really gets at the heart of the investment vs expense mindset.

Those who are solely thinking of money going into marketing as an expense are much more likely to pull the budget when things go awry, either as something that is your own fault or as something outside of your control.

In fact, we saw this when the Covid pandemic hit and clients who were getting a good return from their agency cut their spend simply out of fear. It’s very similar to what people do when the market takes a dip and they sell their investments.

It’s the very definition of “buy high, sell low” which is the antithesis of solid investing principles. The reality is that when markets go down, you should invest more because the prices are better and will, on average historically, go back up. This isn’t to say that an individual stock won’t go down, but that the market as a whole goes up consistently year after year.

Should you ever view marketing as an expense?

In short, yes there are times that marketing is an expense. Marketing is an expense when you are losing money on it.

This doesn’t mean you should stop marketing though! It may mean that you should move budget from an unprofitable channel to a profitable channel. It may also mean you need to improve your marketing in that channel (messaging, creative, content focus, whatever) and that can turn it around.

Is marketing an expense or an investment for your business?

When you think about marketing as an expense for your business, you are much more likely to:

  1. Commit too little budget to achieve your goals
  2. Have unrealistic expectations for results
  3. Pull budget too early and say “marketing doesn’t work for us”

Instead, I encourage you to look at marketing just like you should look at investing.

  1. Put enough into it to give yourself a chance at reaching your goals.
  2. Manage results and change strategy as needed with a view towards a long term time horizon.
  3. Get a professional to manage it if you’re not doing it yourself, as opportunity cost is real.
  4. If you’re losing money on it, determine if you need to change strategy or if you need to move that budget to somewhere else that is getting a better return while staying diversified enough to lower platform risk.

Hope that helps!