Marketing: A Cost or an Investment?

Why treat one like the other?

Ask most agency owners if marketing is an investment or a cost, and they’ll nod wisely, say “investment”, then promptly treat it like a cost. This is an error. If you want a thriving PR business, you should expect to spend at least 4% of your gross profit on marketing and new business. That’s not a theoretical benchmark—it’s the minimum I’ve seen deliver results, and the annual jfdi/Opinium New Business Barometer will show you how your peers stack up.

Spend much less, and you risk drifting quietly into irrelevance. Spend much more, and you may be accused of trying too hard—though in practice, I’ve yet to see a firm fail because it over invested in new business.

When I scaled Shandwick Consultants, one of the earliest decisions was to boost marketing and business development spend from a token ~1% to something closer to 9%. That shift didn’t do the work alone, but it catalysed everything that followed.

So where should the money go?

Even modest-sized firms should be staging at least one event a month. August and December are excused due to holidays and festive inertia, but otherwise, there should be movement—a breakfast briefing, webinar, roundtable, or any event that maintains visibility and enables prospective clients to experience your business in some way. Larger firms? Every division should pull its weight. If a prospective client asks, “What’s your firm been up to lately?”, you should have an answer measured in activities, not awkward silences.

Then there’s social media. Activity here should be relentless but strategic. Share your content—sorry, intellectual property—and follow potential clients assiduously: digitally first, professionally later. Don’t be shy about advertising or entering awards. If two firms are otherwise equal, but one has a trophy cabinet and the other looks like it lost the three-legged race at school sports day, most clients will favour the winner.

And let’s not forget the soft power of hospitality. Clients, intermediaries, and future partners rarely entertain themselves. Budget for the coffees, lunches, and conferences—not to mention the speaking slots. And don’t scrimp on the CRM system. Without it, all this effort risks dissolving into a swirl of expensive but untraceable activity.

The real danger?

Not spending too much. Spending it badly.

Money evaporates via outsourced cold-callers or overcatered dinners where nobody remembers what anyone said. Marketing is, and must be, an investment. But like all investments, it requires intelligence—and a plan.

So: look at your management accounts.

If you’re spending less than ~4% on marketing and new business, what exactly are you doing to win clients?