How Much Money Should Your Business be Spending on Marketing?

b2b marketing budget

B2B Marketing's core role is to generate leads that convert to revenue. Therefore, it's self evident that investing in marketing is important to your business growth.

Well quite.

But exactly how much is enough? Business leaders are struggling to understand:

  • In what type of marketing should you invest?
  • Should you switch to digital tactics? if so, how?
  • How do you measure marketing?

Here are some key statistics from a survey on marketing spending from a new Gartner offering called "Gartner for Marketing leaders."

The data is revealing. More money is being spent on marketing to attract and acquire new customers. The survey found that on average marketing budgets are increasing 6%. But this new cash comes with strings attached. The boss wants proof that the investment is generating additional revenue.

How does your organisation stack up?

In 2012, on average 10.4% of revenue was spent on marketing.

This spending includes salaries and other internal and external costs both traditional and digital. But the range of spending varied widely from as low as 5% to greater than 15%. These variations are most likely a factor of:

  • Market maturity
  • Market share
  • Industry structure
  • Stage of business growth

On average the survey found that digital marketing represents around 2.5% of the company revenue or approximately 25% of the marketing budget, but this is increasing quickly. As tactics and techniques evolve identifying "pure" digital spend is becoming harder and frankly, less relevant as tactics merge.

The top 5 digital marketing spending categories are, in descending order:

Switching to digital generates a better return on investment

Interestingly, considering the pervasive atmosphere of continual cost cutting in companies, the survey found the clear savings realised by switching to digital marketing are being reinvested back into further marketing activties rather than being pocketed.

Funds are being reallocated away from difficult to measure tactics towards more definitive lead generation tactics that contribute to revenue.

Doing digital marketing is hard. The solution? Outsource.

The survey found that up to 50% of digital marketing activities are outsourced. Finding and retaining resources to execute digital campaigns is tough especially as digital marketing and the skills required are changing so rapidly.

Marketing isn't new to outsourcing and managers are comfortable dealing with agencies, data and technology providers. Specialist skills include search, online advertising and social media to name just three. the evidence is that outsourcing as a percentage of spending is increasing.

What are your next steps?

  • Audit your current marketing. Take our Excel based B2B marketing health check to assess your current state of readiness.
  • Assess your current marketing team's skill sets. Look especially for good technical capabilities.
  • Reinvest savings from digital marketing into digital lead generation activities.
  • Ensure you have a comprehensive measurement framework in place across your marketing tactics.
  • Take a good hard look at your current website and current approach to promotion and advertising. Both require significant investments to continue to generate increased returns. Running on autopilot is dangerous.  
  • Rely on external providers when you lack the time or expertise to execute campaigns. Throttling back on your digital marketing stifles business growth.


b2b marketing health check


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Topics: b2b marketing business owners marketing analytics agile marketing reporting