How Much Do Companies Spend on Marketing? [Part 2]

In Part 1, we revealed that companies, on average, spend about $2,000 per month on marketing.

However, this figure alone doesn’t tell us much about marketing effectiveness. The real question is: Why do results differ even when the marketing spend is identical? To understand this, we broke marketing spend into two main categories: Brand Building and Methods of Outreach. While both are essential, they serve different purposes.

Let’s take a look at how the composition of that spending influences success. Using two fictional companies, Company A and Company B, we’ll illustrate why their identical budgets lead to vastly different outcomes.

Composition of Marketing Spend

To illustrate the impact of how marketing budgets are allocated, we’ll compare two fictional companies: Company A and Company B.

Both companies have the same monthly budget, but their marketing spend is divided very differently, leading to significantly different outcomes in terms of growth and results.

Company A (The Brand Builder)

Company A’s marketing spend is focused on traceable tangibles i.e., activities that allow them to clearly measure results. They allocate their budget to investments that lay the foundation for building a strong brand, such as:

$150 per article
$1,000 per landing page
X billable hours on market research and analysis.
Other brand-building efforts, such as creating a customer-facing blog, refining their message, and engaging in formal marketing practices like STDP.

Traits of Company A:

Clarity of vision. Company A understands exactly what its product offers and why it matters to its target audience.
Communication based on real customer questions. They make marketing decisions based on what customers are actually asking. This is the result of doing formal marketing research to understand their market and audience.

They address key questions:

What is our product really about?
What are customers asking?
What is our messaging?

What they have:

Clear positioning. They know exactly where they stand in the market and how they’re different.
Defined brand perception. Customers understand who they are and why they should care.
Differentiation. Their brand stands out in a crowded market.
Trust. They’ve built a reputation for delivering consistent value.

What they fundamentally understand:
Company A knows that brand building is the first step. Outreach methods like PPC, ads, and SEO will be far more effective once a strong brand foundation is in place.

Company B (The Tactic Runner)

Company B’s marketing budget is directed towards untraceables i.e., activities that are harder to measure and often disconnected from a clear brand strategy, such as:

$5,000 per year on SEO efforts to improve search rankings
Buying backlinks to boost domain authority
Paying for ads without a clear understanding of how they fit into the overall strategy
Running PPC campaigns with little to no long-term planning

Attribution assumptions they make:

Company B often assumes that because they saw an improvement in rankings or a sales bump, it must be the result of their SEO efforts. This assumption oversimplifies the situation and overlooks other factors, such as their brand’s clarity or customer perception.

Traits of Company B:

Ambiguous vision. They don’t have a clear understanding of what their brand stands for or how to communicate it effectively.
Tactic-first mentality. Company B focuses on immediate results through tactics like SEO and PPC, skipping over the critical steps of defining their brand or refining their message.
No brand foundation. Without a clear brand, their marketing efforts lack direction and impact.

They have:

No clear positioning. It’s unclear where they stand in the market and how they’re different from competitors.
No defined brand perception. Customers don’t know what the brand represents or why they should care.
No differentiation. Their marketing messages are generic, blending in with every other competitor.
No trust. There’s no reason for customers to believe in or connect with the brand.

What they fundamentally misunderstand:

Company B believes that outreach creates a brand, which is a misguided assumption. In reality, outreach efforts can amplify a brand but can’t create it from scratch.

Why Does Company A Win

Company A (The Brand Builder) wins because they understand that more brand = better outreach.

By focusing on brand building, Company A lays a solid foundation for its marketing efforts. The key benefits of brand building include:

Clear narrative and messaging. They know exactly what to communicate and how to resonate with their audience.
Customer understanding. Through formal marketing practices, they understand what their customers care about and address their needs directly.
Consistent communication. Their messaging is unified and consistently shared across all touchpoints, making it easier for customers to engage with them.
Trust signals. Over time, they build credibility with their audience, which makes them more likely to convert.

Once the brand is solidified, outreach tools like PPC, SEO, backlinks, and paid ads perform significantly better. Because the brand is clear, these methods amplify the message effectively, resulting in higher returns per dollar spent.

Brand building creates the framework that ensures outreach is a strategic, well-executed effort that generates real, measurable results.

Bubba Cola vs Coca-Cola Example

Let’s consider two companies: Bubba Cola and Coca-Cola. Both run Facebook Ads, but the outcomes are drastically different.

Bubba Cola sees mediocre results. Their ad spend doesn’t translate into significant engagement or conversions. This is because they lack a strong, established brand. Their message isn’t clear, and customers aren’t sure why they should care.

Coca-Cola, on the other hand, sees exceptional results. Their Facebook Ads generate massive engagement and drive sales because Coca-Cola is a global brand with clear messaging, trust, and deep customer loyalty. In other words, the ads amplify an already strong brand presence.

Key takeaway: Tools like Facebook Ads don’t create a brand. They can only amplify a brand that already exists. The key to success isn’t in the tools themselves, but in how a brand uses those tools for outreach.

Order of Operations

The correct order of operations in marketing is therefore simple: Company → Brand → Outreach.

Why is this the right sequence?

Outreach without a Brand leads to wasted marketing spend. If a company invests in tactics like SEO, paid ads, and PPC before establishing a strong brand, those efforts are inefficient and often ineffective. Without a brand foundation, outreach becomes unfocused, leading to unclear messaging and low customer engagement.

The Problem of Measurement, as we discussed in Part 1, becomes even more pronounced when outreach is done without a brand. Without clear brand messaging and positioning, it’s difficult to accurately measure the success of outreach efforts. You can’t tell if your PPC campaigns are underperforming because of a poor outreach strategy or because your brand itself isn’t compelling enough to convert leads.

Brand building before outreach is a smart strategy that compounds returns over time. Once a brand is established, outreach efforts like SEO, paid ads, and PPC can significantly improve in effectiveness, as they amplify a clear and trusted message to the right audience.

Key takeaway: Deliberate brand building > outreach efforts. A solid brand foundation makes outreach work smarter, not harder, and drives better results over time.

Conclusion

To wrap up, let’s recap the main points:

Two companies can spend the same amount monthly on marketing and appear identical on paper, but their results can vary dramatically. The key to understanding why lies in the composition of their marketing spend. It’s not just about how much you spend, but how you allocate it.

Brand building is the foundation of successful marketing. It’s what creates brand perception, trust, positioning, and differentiation in the market. A strong brand resonates with customers, makes your message clearer, and fosters long-term relationships.

Outreach (whether it’s SEO, PPC, or paid ads) amplifies what already exists. Outreach methods work best when they’re paired with a clear, differentiated brand that has already established trust and a solid foundation.

So, if you want better results from your marketing spend, focus on building your brand first. Once your brand is strong and your messaging is clear, outreach will be more effective, and you’ll see compounding returns on your investment.