Marketing Spend. Worth it, or not?

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Having been CFO at a number of tech startups over the years you develop a strong sense of what's worth it and what's not when it comes to the various priorities for investing money in the growth of the business. Of course it varies from company to company, but experience (and common sense) say that, for example, having integrated business systems (lead management, salesforce automation, customer relationship management, finance etc) deployed across the company makes sense, while fragmented, stand-alone or point solutions generally do not. Despite which many companies end up with the latter rather than the former because of lack of leadership and vision in these areas at the outset.

Probably the hardest area to evaluate is one of the most important - the company's marketing spend. Particularly for early-stage businesses the key challenge is to get the word out and become known, become "top-of-mind" in a prospective customer's evaluation of the choices. Without that, the best ideas or technologies don't go anywhere.

The good news these days is that the appearance of social networks, the reach of the internet, the effectiveness of new search and advertizing solutions and many other factors have all combined to provide astonishingly effective - and cheap - alternatives to traditional marketing efforts. Here are some examples of what I think is worth it and what's not on the marketing side for early stage tech companies.

Worth it:

• Viral PR. Cultivating key influencers such as bloggers and via new media such as Twitter. 
• Speaking engagements on panels and at events.
• Highly focused and optimized key-word search advertising.
• Compelling, engaging and search-engine optimized websites
• Engaging smart, hip folks in such as Matt Stewart and JoAnn Peach to devise the strategy and make it happen.
• Online case studies, customer references and success stories.
• Lead managment solutions such as Marketo or Eloqua.
• Hip, fun, cheap videos such as Flaii's, using employees and associates. 

Not Worth It:

• $12,000 a month (or more) retainer-based PR with traditional agencies. I hate that stuff. You  might as well set fire to $100 bills and enjoy the show.
• Large, fancy tradeshow booths and splurges at big events. No chocolate fountains! Still better to have a speaking slot than a booth though!
• Advertising in traditional print media. Its dead or dying, hugely expensive and no-one cares anyway. 
• Lots of traditional print collateral and materials.
• Sponsorships
• Trash and trinkets - T shirts, lanyards, tschotckes ... urgh!!!

Comments

[Jo Peach]

Thanks for the shoutout, Phil! I agree with you 100% that PR folks need to change their methods when it comes to working with clients. Conversations need to be made and folks like @nicolejordan are constantly asking them. Check out her and Jennifer Leggio's report that's due out soon!