B2B Marketing Budget Benchmarks
How Much Should You Spend on Marketing?
This question is a bit like how long is a piece of string. To help you answer this question, here is a compilation of recent data on B2B Marketing Budget Benchmarks.
B2B Marketing Budget Benchmarks Sources
According to Gartner
Survey results show that budgets have recovered somewhat, with the average marketing spend increasing from 6.4% to 9.5% of company revenue across almost all industries.
The typical marketing budget as a percentage of revenue for a $2 billion dollar company can vary widely depending on the industry, business model, and marketing strategy of the company. According to Gartner, the average B2B marketing budget as a percentage of revenue is around 11.2%.
According to BDC
A common rule of thumb is that B2B companies should spend between 2 and 5% of their revenue on marketing. For B2C companies, the proportion is often higher—between 5 and 10%. This is because B2C companies typically need to invest in more marketing channels to reach various customer segments.
According to Hubspot
B2B product industries allocate, on average, roughly 7.8% of revenue to marketing. This is similar to B2C services (6.5%) and B2B services (5.9%). B2C Product allocates the highest amount at 15.1% of total revenue. Small businesses are also spending.
According to The Marketing Spend Decision:
Benchmarks for B2B Companies survey by the CMO council, B2B companies spend on average 7.5% of their revenue on marketing.
According to a Leading VC Firm
Companies in their portfolio with >$100mn in revenue spent 23% of revenue on sales and marketing. Companies with 25% YOY growth spent 29% of revenue on sales and marketing.
A Deeper Dive on the Gartner Report
Gartner’s The State of Marketing Budget and Strategy 2022 is well worth getting hold of. You can download it here.
- Marketing budgets have recovered post-pandemic, increasing from 6.4% of revenue to 9.5%. This is still below pre-pandemic levels.
- Tech Product CMOs reported the largest increase in budget year over year, jumping from 5.0% in 2021 to 10.1% in 2022.
- FYI, another Gartner study that surveyed 500 hardware, software, and service companies reported average tech marketing as 8.5% of company revenue.
- Digital accounts for 56% of marketing spending, but offline channels rebound as CMOs balance awareness and performance.
- Most (61%) of CMOs report that their in-house teams lack the capabilities to deliver their strategy.
So if you work for a tech company with $10 million in revenues, your marketing budget should be $1 million, according to Gartner (i.e., 10%). This would break down as follows:
- Agencies and Services: $240,000
- Paid Media: $260,000
- Labor: $250,000
- Marketing Technology: $250,000
I am very curious to know if this benchmark makes any sense. To be honest, the labor cost seems too low.
Leave a comment or email me (firstname.lastname@example.org) with what you think.