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by Jason Ogden | May 27, 2025
For a long time, we’ve organized our thinking, services and marketing content around the concept of marketing capital. In fact, using that term in our guarantee has been one thing that has remained constant since day one. There is now more thinking of marketing investments in these terms by accounting and financial people. In short, marketing investments, while treated as a simple expense on the P&L, are expected to generate long-term benefits akin to capital expenditures.
When you think about Marketing in financial terms, it’s easy to see how it is similar to an investment. For example, ROI is a part and parcel of modern marketing evaluations, which implies the expectation of returns. This part is pretty intuitive. What’s less intuitive is the downside risk, which is equally significant yet rarely discussed. Marketing decision makers desire not only ROI but also safety from the downside risks.
The Most Common Downside Risks of Marketing Investments
Zero ROI
This one is pretty straightforward when measuring dollars spent. However, the downside here also includes missed opportunities and manpower.
Starting Over
This represents sunk costs of marketing, including evaluating options (internal, external, hybrid), interviewing and the dreaded onboarding. Whether it’s an agency or a new employee, marketers have a process they need to follow to get up to speed and take control of the function. Starting over is almost always undesirable and to be avoided unless drastic measures are required. Avoiding a restart has a lot to do with leaders accepting mediocre results and maintaining the status quo.
Relying on Others
While not a risk in and of itself, given the stakes marketing plays in the future of your business, the need to rely on others for something so critical brings with it potential for self-inflicted wounds. Micromanaging, reactive decision making, abrupt decision making and spend reallocation are some of the downside risks leaders face when relying on someone else for something as critical as marketing.
I could have also named common risks such as not knowing what’s going on, what’s next, most important focus areas, how to interpret data/ROI effectively, bad past experiences and lack of expertise as downside risk drivers.
How to Manage Marketing Investment Risk
Time in Market
Similar to investing in the stock market, time in market is a major driver of success. You can not be successful by simply deciding to start spending on marketing one month and seeing results the next. Conversely, you can not turn marketing off at the first sign of struggle or need to cut costs. You have to be in market when your buyers need to know about you, which you simply can’t predict. It takes time to generate awareness and demand in your target markets.
A Model
Whether it’s something as simple as Economic Engine driver (from the HedgeHog Concept) or something more elaborate like a GTM or customer experience model, you need a framework to see the big picture and make good decisions over time. Marketing is flooded with tools and tactics that distract from the big picture.
Grace
Give yourself and your teams some leeway to make some mistakes. Not every single dollar invested in marketing is going to produce returns, and not everything you try is going to work. Keep your eyes on the big picture at the total investment level relative to the total results. Everything below that is for optimizing, learning and allocation.
About the author
by Jason Ogden
