How Much Should Your Marketing Team Budget for 2021? [By Industry]
When I was hired for my first marketing role, I got really excited to pitch new, exciting ideas to my team.
And I thought — as long as I had data to support the potential success of a project — that my team would be thrilled to hear these ideas.
Which they were. But they were also cautious, and one of their biggest concerns was, “Okay, this sounds great … but how much is it going to cost?”
Ultimately, being a successful marketer isn’t just about thinking strategically. It’s also about adhering to a strict budget, and achieving new levels of growth while simultaneously choosing the most cost-effective option for your business.
Here, we’ll explore typical marketing budgets, as well as marketing budgets by industry, so you can determine how your budget matches up against competitors.
Plus, we’ll explore how much of your yearly revenue you should re-invest in marketing materials to see stronger long-term growth.
What’s a typical marketing budget percentage?
As of February 2021, Deloitte’s annual CMO Survey reports that marketing budgets are now roughly 11.7% of total company-wide budget — a slight decrease from the 12.6% marketers saw in June 2020, but still a record high that most marketers haven’t seen over the last four years.
(It’s important to note, we saw record-high marketing budgets over the course of the pandemic as companies relocated some budget towards digital marketing strategies, rather than more offline tactics.)
Gartner’s 2020 CMO survey confirms most marketing budgets rest around 11% of total company budget.
While your own marketing department’s budget depends on a variety of factors — including industry, company revenue performance, and business needs — this should help you ballpark a reasonable percentage of your total company-wide budget that you should allocate for your marketing teams.
Of course, what strategies/channels marketing teams choose to invest in varies depending on individual company goals. For instance, while 73% of companies invested in website optimization in 2020, only 20% invested in machine learning and automation.
Web optimization, digital media and search, and digital marketing were the top three priorities for companies when determining budget allocation in 2020 — with roughly 73%, 65%, and 57% of companies (respectively) investing in each.
These trends are predicted to continue into 2021 and beyond.
However, the data we’ve reported so far pertains to marketing budget percentage of overall company budget — but what about marketing budget as it pertains to overall company revenue? Let’s dive into that, next.
Marketing Budget Percentage of Revenue
The U.S. Small Business Administration recommends small businesses (businesses with revenue less than 5 million) allocate between 7% and 8% of total revenue to marketing — assuming your business has margins in the range of 10-12 percent.
The amount of revenue businesses allocate to marketing has increased steadily over the past 10 years, with average marketing percentage of revenue landing around 13% in 2021, compared to just 8% back in …read more
Source:: HubSpot Blog
