One of the questions I am most frequently asked is: “How much money should my company be investing in marketing?” Here’s a summary of B2B marketing spend, as a percentage of total company budget, as a percentage of revenue, and by industry. Wondering how you stack-up? Read on…
The 2018 CMO Survey (polling nearly 3,000 marketing executives in the US) provides solid insights and industry benchmarks for B2B and B2C companies.
B2B Marketing as a Percentage of Total Company Spend
On average, across all industries (B2C & B2B) in the US, marketing budgets make up 11.4% of total company budgets. The trend over the past 6 years is upward, as marketing continues to grab a larger share of corporate spend.
B2B companies are well aligned with this US average, with services companies grabbing a slightly higher percentage than product firms:
- For B2B product firms, marketing budgets comprise 10.4% of total company budget
- For B2B service, marketing is 12.6% of total
B2B Marketing as a percentage of revenue
In terms of marketing investment as a percentage of revenue…. for all companies in the US, marketing investment, on average, is 6.9% of company revenues.
Again, B2B firms are very close to this US average:
- For B2B product companies, marketing spend is 6.4% of total revenue
- For B2B service firms, marketing is 6.8% of revenue
B2B Marketing Budgets by Industry
Averages provide a meaningful data point, but marketing investment varies greatly, industry by industry. For example:
- Manufacturing companies devote 6.4% of the corporate budget to marketing, which is only 2.7% of revenue.
- Technology/Software companies devote 9.3% of the corporate budget to marketing, which is nearly 10% of revenue.
Digital vs Traditional Marketing
For all firms (B2B & B2C, in the US, in 2018) on average 41% of their total marketing budget is allocated to online/digital efforts.
For B2B firms, the percentage of marketing spend going to digital can vary greatly. Businesses that rely heavily on the internet to generate sales invest a greater percentage in digital than traditional marketing methods.
In fact, some B2B firms devote nearly all of their marketing investment to digital:
- 25% of B2B marketers spend between 61 and 80 percent of their total marketing budget on digital marketing.
For other companies, digital spend remains less than traditional channels:
- For 50%of businesses, digital represents less than 40 percent of total marketing spend.
For more information visit WebStrategies.
It’s a great time to be a digital marketer!
Marketing budgets continue to increase across the board and more and more money is being invested in digital channels.
B2B marketers are working hard to focus their investment on the right prospects, demonstrate accountability for results, measure contribution to revenue, and improve their strategic partnership with sales. All of this is leading to increased investment and larger budgets for B2B digital marketers.