When I was hired for my first marketing role, I was really excited to come up with new, interesting ideas for my team.
And I thought – as long as I have the data to support a project’s likelihood of success – that my team will nervous to hear these ideas.
They used to be. But they’re cautious, too, and one of their biggest concerns is, “Okay, this sounds great … but how much will it cost?”
Ultimately, becoming a successful marketer is more than just thinking strategically. It’s also about adhering to a tight budget and achieving new growth while at the same time choosing the most cost-effective option for your business.
Here, we’ll explore typical marketing budgets, as well as industry-specific marketing budgets, so you can determine how your budget is right for your competitors.
Additionally, we’ll find out how much revenue you should re-invest each year in marketing materials to see stronger long-term growth.
What is the typical marketing budget percentage?
As of February 2021, Deloitte’s annual CMO survey Report that marketing budget currently accounts for about 11.7% of total company budget – a slim down from the 12.6% that marketers saw in June 2020, but still the record high most marketers have not seen in the past four years.
(It’s important to note, we’ve seen record high marketing budgets along the way pandemic as companies shift some of their budgets to digital marketing strategies, instead of more offline tactics.)
Gartner CMO 2020 Survey confirm most of the marketing budget is about 11% of the total company budget.
While your own marketing department’s budget depends on many factors – including the industry, the company’s revenue performance and business needs – this will help you determine a reasonable percentage in total company-wide budget that you should allocate to your marketing teams.
Of course, what The marketing strategies / channels that the marketing team choose to invest in vary depending on the goals of each company. For example, while 73% of companies invest in website optimization by 2020, only 20% will invest in machine learning and automation.
Web optimization, digital media and search, and digital marketing are the top three for companies when determining budget allocation by 2020 – with about 73%, 65% and 57% of companies (respectively) investing in each company.
These The trend is expected to continue in 2021 and beyond.
However, the data we’ve reported so far relates to the percentage of the marketing budget of the company’s overall budget – but also to the marketing budget as it relates to the overall company. revenue? Let’s dive into that, next.
Percent of the marketing budget of sales
The US Small Business Administration recommends that small businesses (businesses with revenues of less than 5 million) allocate between 7% and 8% of total marketing revenue – Assuming your business has a rate of return between 10-12%.
The amount of revenue that businesses allocate to marketing has increased steadily over the past 10 years, with an average The marketing rate in sales will be around 13% by 2021, compared with just 8% back to 2011.
The B2B product sectors are allocated an average of approximately 10% of revenue from marketing activitiessimilar to B2C Services (10.1%). B2B Services and B2C Product distribution higher numbers are 15% and 18%corresponding to total revenue.
Of course, decisions regarding marketing budget allocations are mostly still industry-specific. To identify more precise, industry-specific insights, let’s explore the marketing budget by industry, continued.
Percentage of marketing budget by industry [2021 Data]
Deloitte’s CMO 2020 Survey found that B2B firms (product-focused) allocate approximately 9.4% of overall budget to marketing efforts, while B2B firms (service-focused) allocate 11.4% .
Also, if you work for a B2C company (product-focused), Deloitte reports 15.9% of overall budget is the average for marketing teams – for B2C companies (focus service focus), this figure is nearly 12%.
Of course, the type of business you work for (B2B or B2C) is only one factor when determining the percentage of your marketing budget. Industry is also a major factor.
For example, marketing costs are highest in Education with 19.4% of total budgets – and lowest in Energy, around 4%.
If you work in the healthcare industry, you can expect a marketing budget to be around 7% of the total budget.
In addition, the routine consulting services 13%. Finally, the technology / software platform allocates 12% of the company’s total budget to marketing.
If you’re unsure of how to manage your marketing budget, you’re in luck. We’ve covered marketing budgets extensively in How to Manage Your All Marketing Budget [Free Budget Planner Templates]. Check out that post to create the right marketing budget for you – and use templates and templates to get started.