In this article, we’ll look at typical marketing budgets – including marketing budgets by industry – so you can see how your budget matches up against your competitors. We’ll also explore how much of your yearly revenue you need to re-invest in marketing materials to see substantial long-term growth.
What’s a standard marketing budget percentage?
Deloitte’s annual CMO Survey reports that marketing budgets, as of February 2021, are about 11.7% of total the company-wide budget. This is still a record high over the last four years, but it’s a slight decrease from the 12.6% marketers saw in June 2020. Gartner’s 2020 CMO Survey supports that most marketing budgets are around 11% of the total company budget.
Your marketing budget depends on several factors – including student database industry, business needs, and company revenue performance – but these surveys provide a reasonable percentage of the amount to allocate for your marketing teams.
Depending on individual company goals, what channels/strategies marketing teams decide to invest in varies. Here are the top three budget priorities for most companies in 2020 – and these trends are predicted to continue beyond 2021.
- Web optimization – 73%
- Digital media and search – 65%
- Digital marketing – 57%
In recent years, marketers have reduced their marketing budgets for traditional advertising and increased their digital marketing budget. In 2020, the average company was expected to budget 45% of their total marketing budget to digital marketing.
What about the marketing budget as it relates to overall company revenue?
According to the U.S. Small Business Administration, businesses with revenue less than 5 million should designate 7 – 8 percent of total revenue to marketing – if your margins are in the 10 – 12 percent range.
The amount of revenue businesses allocate to marketing has steadily cost-effective to outsource certain marketing climbed over the last 10 years. Today, the average marketing percentage of revenue is around 13% – compared to 8% in 2011.
On average, B2B Product and B2C Services allocate about 10% of revenue to marketing. However, B2C Product designates around 18% of total revenue, and B2B Services allocates roughly 15%.
What is the marketing budget percentage by industry?
Of course, how much to spend on marketing is largely industry specific. The following percentages will help you compare your company’s overall marketing budget to the average:
- Consumer packaged goods – 24%
- Consumer services – 15%
- Tech Software/biotech – 15%
- Communications/media – 13%
- Mining/construction – 13%
- Service consulting – 12%
- Education – 11%
- Healthcare/pharmaceuticals – 10%
- Retail wholesale – 10%
- Banking/finance/insurance – 8%
- Transportation – 8%
- Manufacturing – 8%
- Energy – 4%
How much (and where) should a small business spend on marketing?
When looking at the marketing budget percentage model, 7 – 8 percent is a australia database directory safe amount of your overall revenue that will steadily improve your company’s customer base.