Please help me understand the average RoI on marketing for B2C companies.

By Anji Beeravalli on January 31, 2015 4 Comments / 1657 views

Hello all,

I am trying to understand how B2C startups like HolidayIQ, MustSeeIndia, Delyver (order/bookings based) etc, spend on marketing either online / offline. What would be the average RoI on the spend? I am just getting started with marketing and would love to connect with you if you have done something related in the past.

I am aware that my question is very vast and depends on many factors, but the fact that so many startups are spending huge amounts on marketing, I am sure there must be some metrics people usually track, and the examples that I have taken, I am guessing it should be revenues.

Thanks,

Anji

Added by Editor from Anji’s comment:

I thought I should give more context to my question. I run a startup Evibe.in – platform to discover and book party packages (currenly kids parties is our niche). We have been growing great since our launch in Feb ’14 and we are now looking to raise first round of funding for scaling up. Till date, we haven’t spent a single penny on marketing, all our customers were through organic search. I totally understand the power of SEO – something which we got right, luckily :).

To make our projections, I wanted to understand how much people usually spend on marketing and what kind of returns to expect. This is to keep a considerable marketing budget and reasonable projections in our plan. So, I thought taking existing example would help to determine the range.

Comments

Anji Beeravalli

4 Comments

Amit Shroff February 2, 2015, 2:03 pm

B Anjaneyulu, I think it depends. Like you consider bootstrap start-ups they barely have funding for starups. But if you consider start-ups who are funded by VC, they would spends huge amount on marketing.

Marketing cost depends on what is the product and whom do you wish to reach along with your short and long terms goals. Like if you wish to reach out to your targeted audience from day 1, you should consider Google Adword, but again it depends on your product/market and offering. Like in case of an automobile company the marketing budget need to be huge since avg CPC is approx 250 to 500, same is the case for Website Designing Companies. Where as Avg CPC cost for wallpaper etc is just between 10 to 25.

Social Media / Google Display or other Display network are primary used to creating branding. People are using re-marketing these days to attract customer.

Marketing cost also depends on profit margin you have in the product, like if you are spending 5000 daily and your daily sale is approx 5000/- then you need to think about your marketing cost or channels since you are loosing 2500 every day, assuming you have 100% margin (if operational cost etc are included it can go upto 3500).

Hence you will have to build the matrix gradually, experiment what is working for you and gradually increase your budget, but you need be regular, since 1 day or month or advertising can do magic to you.

Similarly, if you are looking for long term advantage, invest on SEO and content, since SEO takes time but if done well can give you long lasting fruitful results.

I hope I have been able to help you.
Anji Beeravalli February 2, 2015, 6:21 pm

Hi Amit, thank you very much for taking time to write a reply.

I thought I should give more context to my question. I run a startup Evibe.in – platform to discover and book party packages (currenly kids parties is our niche). We have been growing great since our launch in Feb ’14 and we are now looking to raise first round of funding for scaling up. Till date, we haven’t spent a single penny on marketing, all our customers were through organic search. I totally understand the power of SEO – something which we got right, luckily :).

To make our projections, I wanted to understand how much people usually spend on marketing and what kind of returns to expect. This is to keep a considerable marketing budget and reasonable projections in our plan. So, I thought taking existing example would help to determine the range.

Hope you got the context.

Anji
Amit Shroff February 3, 2015, 3:44 am
Anji,

I believe you should do following exercise. As you mentioned you are getting traffic through SEO. I am sure you are aware about keyword.

Look at the channels you would like to explore like SEO, Social Media, Google Adword, Display Advertising, Email Marketing etc.

Avg cost could be as follows (considering the packages we offer) :
1. SEO – 3,00,000.00 for 60 Keywords (Annually)- https://www.72interactive.in/packages/seo-packages.html
2. Social Media – 35,000/Month – https://www.72interactive.in/packages/smo-packages.html – If you want to be aggressive you can consider paid marketing budget of approx 50,000.00
3. Google Adwords – 35,000/Month – https://www.72interactive.in/packages/pay-per-click-packages.html
4. Display – Between 2,00,000 to 3,50,000
5. 3rd Party Email Marketing – 50,000 to 1,50,000
I hope this would help you.

Regards,
Amit
Anji Beeravalli February 3, 2015, 9:02 am

Amit,

Thanks for letting me know your offerings. Sure, I will have a look and get in touch you.

Thanks, Anji