How Much of Your Budget Is Spent on Invisible Costs?

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Recently, the executives at Kraft Heinz admitted that they haven’t been spending their marketing budget wisely. Upon analysis, they learned that they’ve been spending too much money on invisible parts of the marketing process—such as production fees and hiring contractors—rather than creating and sharing a great ad.

The CEO summarized that they need to: “Invest in things the customer sees, not in what they don’t see.”

You should always be aware of where your marketing spend is really going—and if it’s worthwhile.

Often, if the customer can’t see the value in your efforts, then it’s hard to justify the price that went into the final product. And while it’s true that genius is often marked by making hard work look easy, when it comes to marketing, it’s also important that your audience appreciates the sum of your final product.

(Otherwise, what even is the point of an advertisement?)

But you have to begin at the beginning: A big part of measuring your return on investment (ROI) is determining how much your investment really cost.

(Funny enough, that’s not just talking about the amount of money involved.)

For example, if you spend $50 on a paid ad campaign and you wind up with $500, you might believe that you’ve earned $10 for every $1 spent. That’s easy math. But wait—you also need to take into account the amount of time it took to conceptualize and create those ads. If your team is taking a long time to strategize your ad creative and content, don’t forget that their time is also worth money. The ads that you’re able to put up quickly, with a smooth production process, are actually costing you less than the ones that take several meetings, a huge email thread, and a lot of back-and-forth calls with an outside contributor before they hit the Internet.

Another important example is considering the outside costs—like your vendors and materials. So if you think you’ve had great ROI on a particular digital ad, you need to also factor in the freelance video editor that you hired to make the ad and that pricey new software you bought back in January. It might have performed better because it took a greater amount of money to create behind the scenes, not because of the amount you invested up-front when the ad was promoted online.

Lastly, Kraft Heinz suggested that it wasn’t just about cutting back on extraneous spending. They said that the second half of their new recipe for success would be focusing on how to deploy their resources. The brand wanted to eliminate “inefficiencies” and keep from spreading themselves thin—something that a leading condiments company should know a thing or two about! Not only do they hope to save money on the ads they’re creating, and invest in more visible target areas, they also want to make sure they’re executing their campaigns wisely. The company plans to analyze how they’re delivering those final products that will now be created more cost-efficiently and with the customers top-of-mind.

These are important lessons for every marketer. Make sure you invest in creative in ways that are actually noticeable—and valuable—to your customers. You should also make sure you have a sound strategy behind your delivery. This will, ultimately, save you time and money—and make sure people know what all of that hard work you do is all about.

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