Do you really have to spend money to make money?

In an era where small businesses are fighting tooth and nail to keep their budgets as tight as possible, it’s only natural to hold off on paid marketing. After all, today’s businesses have been spoiled by a wealth of totally free traffic sources such as social media and blogging.

Although such channels are effective to helping your business make its voice heard without spending a dime, they’ll only take you so far.

For SMBs, Paid Marketing is a Matter of “When,” Not “If”

Considering that marketers are ramping up their budgets in 2017, relying solely on free channels is an uphill battle for those looking to generate more leads. Sooner or later, businesses hit a wall where they must integrate paid channels into their marketing strategy if they hope to scale.

According to MarketingCharts, social media, content marketing and personalization are the top three areas businesses look to invest in this year:

If you’re skeptical of paid advertising, you certainly have every right to be. However, scaling your business doesn’t have to translate into wasting money. Before investing in paid marketing, take a step back and understand the following five questions to help ensure that your marketing budget is well-spent.

1. “What Are My Competitors Up To?”

Sometimes it pays to spy on your competition.

By conducting a personal audit of your competitors, you can better understand what you’re up against from a marketing perspective.

First and foremost, compile a list of your top five competitors. Then, take the following steps to assess their marketing firepower:

  • Opt-in to their email lists. How often are they sending messages? Are they using a paid or free provider? What sort of calls-to-action and offers are they blasting to their lists?
  • Follow them on social media. Are they running ads on Facebook? Are they getting love in the comments section? Do they use a post scheduling platform such as Hootsuite or Buffer?
  • Take a close look at their company blog. What does their posting frequency look like? Do their posts appear optimized for SEO? Using a competitive SEO analysis tool, you can better understand how your competitors are leveraging content marketing.

Remember: smart competitive analysis isn’t about playing the role of copycat or stressing out

over what your competitors are doing. By objectively assessing these three points, you can better understand where your competition might be lacking.

2. “What Does My Budget Look Like, Anyway?”

Conventional wisdom tells us that businesses should spend a set percentage or dollar amount on marketing. For example, according to recent small business budget data, the average business spends about $400 a month on digital marketing or approximately 4% of their revenue.

Yet in the digital era, such hard and fast numbers become a bit fuzzy. Not all businesses are created equal in terms of their marketing needs.

For example, a solopreneur running a web-based business may be able to get by on a $10 Hootsuite account and a $50 MailChimp subscription to successfully market to their list of 2,500 followers. Obviously, bigger businesses who require investments such as paying freelance writers, graphic designers and link-builders will need more cash on hand.

There is no “right” budget for small businesses in terms of dollars and cents. When in doubt, take a “less is more” approach as you can always spend more down the road if you need to scale.

3. “Have I Tested My Ads?”

The biggest mistake marketers make is failing to effectively test their advertising. This rings true for email marketing, blogging and social media alike.

You’ve probably heard the phrase “always be testing” at some point. In any given marketing campaign, there about a million things you could potentially A/B test. Although testing may seem tedious, you can’t hope to run a successful paid campaign without having a data-driven approach to your marketing messages.

For example, do you know what sort of headlines grab the attention of your audience? Fear-based? Humorous?

What about calls-to-action? What types of offers and deals are the most popular with your customers right now?

Once you understand these subtle elements of your current marketing strategy, you’ll be able to craft more compelling marketing messages for your audience in the future. Likewise, you won’t let your paid budget go to waste.

4. “Am I Focusing on the Short-Term or Long-Term?”

Simply put, any type of paid marketing represents a commitment.

Investments such as email marketing and blogging represent long-term commitments. After all, once you start building an audience through these channels, you must continuously produce new content and messages if you want to maintain your momentum. Thankfully, these investments aren’t costly in the grand scheme of things.

On the flip side, short-term marketing expenses such as a UX test or professional SEO audit of your website and link-building campaigns might require a higher one-time financial commitment. The information gathered from these expenses could be used to beef up ongoing marketing campaigns in pursuit of a better ROI.

In short, you need to decide upfront which long-term commitments you can realistically keep up with. For example, if you can’t handle both blogging and email marketing simultaneously, you’d be better off choosing one or the other versus spreading yourself thin.

5. “Have I Made the Most of My Free Marketing Options?”

To bring all of this full circle, the power of free marketing channels is difficult to deny.

Some businesses today are being built exclusively through Facebook. Meanwhile, blogging costs little more than an investment of time and results in more leads, traffic and positioning power.

Here’s some more food for thought regarding the power of free marketing: Hubspot notes that businesses that blog receive 3.5 times more traffic than those that don’t.

If you haven’t already tested the free channels available to you, throwing money at your marketing problems isn’t going to magically solve them. Before you pay for anything, from email to content creation and beyond, you should see what you’re capable of doing on your own first.

Before You Spend a Cent, Make Sure You Ask the Right Questions

Paid marketing is inevitable for businesses hoping to seriously grow and compete on a larger stage. By understanding the in’s and out’s of what your paid strategy looks like before spending a cent, you can keep your budget under control and give yourself some peace of mind as you scale.