is marketing considered an investment or expense.............WHY?

Answer 1

It's considered both however the investment portion isn't calculated under marketing the way the expenses for it are.

Why? Marketing is for most Companies a necessity thus if a Company wishes to be a viable entity it must utilize marketing strategies in order to become a known business with something of value to offer its potential clients.

Very few businesses will thrive without marketing of some sort and if a business is doing things right, their marketing budget can be strengthened through clients alone, thus costing little to nothing. Word of mouth is one of the best marketing tools available to a business that wants to grow and succeed. But, to get to that stage the business must spend or invest in advertisements, a web presence, flyers, radio or tv spots etc., depending on the type of business.

So, marketing is considered both...because done right in the end the investment made in marketing expenses pays off by increased clientele, increased business, increased revenue and of course if the business is large enough...increased dividends for the investors.

Answer 2

Marketing is a necessary evil. You have to advertise to keep your name out in front of everyone, however, you never know what percentage of your dollars are really working for you.

You can't captalize the money you spend on advertising....it's truly an expense. There is no hard value to your marketing plan...unless you have a land based business and have added an online store.

The online store adds value in terms of generating additional revenue with adding only minimal expense. I own a country club and have just recently added an online store to my mix. I view my online store as an investment and an asset to my business.

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Answer 3

Most marketing expenses would qualify as operating costs... not capital expenditures. I can't think of any kind of Marketing expenses that would qualify as a capital investment... there may be a few out there, but just about every marketing expense you can make will count as an operating cost.

At least thats as far as how it is accounted (google GAAP and you can see how other costs are qualified).

Answer 4

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Answer 5

From an accounting point of view, it is an expense because it entails the use of resources. From a general business point of view , it should be an investment as it is expected to generate more revenues and therefore profit.

Answer 6

expense

because I have an entry in my accounts ledger saying marketing expense

Answer 7

Both, because they both are.