Nov 05, 2018 - 07:07 PM
Depends on how major you are talking about. There's no average number. It depends solely on the business goals and business economics.
Calculate what your LTV is. See what your current CAC is for those channels and what could be your potential CAC (assuming conversion rate improvements, media buying optimizations, seasonality, etc). Make quarterly and monthly projections and forecasts. Determine what your margin towards acquisition is (LTV minus all other expenses) - how much you can spend to acquire customers to remain break event or above (depending on LTV, business goals, and economics). Your margin towards acquisition (MTA) will dictate how much you can afford to spend per customer (CAC). Your CAC will determine how much you need/can spend.
Every major e-commerce company goes through these kinds of calculations regularly. In every major e-commerce company, they have to present the budget ask for the board. The forecast is what usually backs the ask. The board is usually the ones who approve the company budget for each subsequent quarter (including and specifically marketing). You could be presenting to or helping the CMO/CEO to put together the forecast. Either a CMO or a CEO (or both) are the ones who present to the board quarterly and ask for budget approvals.
With the board or without (doesn't matter) you need to do this math, forecasting, and calculations regularly to determine how much you need/can spend profitably. You can't just come up with a random number...
It doesn't matter how much your competitors spend in context of what you need to spend. Their business economics, goals, and strategy may be completely different from yours. You shouldn't define how much you need to spend based on how much they do. You should factor it into your considerations and planning (since you are fighting for the market share), but it shouldn't define how much you need to spend (your own business should).
That's why there's no ultimate "how much". It varies individually by each company, market, product, and business. Unfortunately, there's no simple answer to your question. You need to do the planning. If you think you don't, no offense, but you probably shouldn't be in charge of the things you mentioned. Doesn't matter whether you are a senior exec., or a management level, every marketer (especially digital marketer) should be doing this math regardless.
If your "boss" doesn't know that this should be done or doesn't think it should be, you should probably look for another company or a new "boss" ;).
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