Promotion Cost

Promotion cost is the dollar amount a company or business incurs to market products or services to potential customers. Some industries such as banking refer to this as an ‘incentive’ cost. Any marketing expense such as a direct mail piece, giveaways, sponsorships or free one-time trial services are considered promotion costs. Messaging here is typically more general and meant to create awareness more than having a strong call to action. While advertising is a slightly different category according to the IRS, promotion costs are tax deductible. Advertising expenses are not.