B2B Budget Benchmarks 2022: how much should you be spending?

Carrot cake with a slice being taken out of it

B2B Budget Benchmarks 2022: how much should you be spending?

Asking how much to spend on your B2B marketing is a bit of a ‘How long is a piece of string?’ type of question – the answer to which leaves you more baffled, befuddled and bewildered than before.

To give you a helping hand, we’ve taken a look at the current B2B marketing budget trends so you can see who is splashing the cash, and who is tightening the purse strings.

And despite the turbulence of recent times, it’s not all doom and gloom! Judging by the results, there’s plenty to feel positive about.

The magic number: what are CMOs spending?

Now, in an ideal world, you wouldn’t start by setting a budget at all – you’d begin by defining your goals, strategies and tactics, and working out your costs accordingly.

But for those reluctant realists among us, it helps to have a ballpark figure for what a ‘normal’ budget really looks like.

The CMO Survey 2022 from Deloitte found organisations are, on average, spending 8% of their revenue and 15% of their total company budget on marketing.

Gartner’s The State of Marketing Budget and Strategy 2022 report puts that figure a little higher, with the average marketing budget at 9.5% of overall company revenue.

Encouragingly, this represents a significant post-pandemic bounce back, with an average increase of 3% since 2021.

Before you go popping open the champagne, though, it’s important to note that things are not quite back to pre-pandemic times just yet. Between 2018 and 2020, the average budget was slightly higher, at 10.9%.

Industry by industry: who comes out on top?

In general, an increase in marketing spend has been consistent across most industries.

Gartner found that Financial Services CMOs hold the highest budgets, at 10.4% of total company revenue – a big increase from 7.4% in 2021.

But Tech Product CMOs budgets have the fastest growing budgets, doubling from 5% in 2021 to 10% in 2022.

The CMO survey offers a slight difference of opinion, reporting a 1% decrease in Banking/Finance/Insurance budgets.

Percentage change of marketing spend in the prior 12 months per industry

  • Banking/Finance/Insurance -1%
  • Healthcare 17%
  • Pharma/Biotech 10%
  • Manufacturing -10%
  • Real Estate 20%
  • Tech/Software/Platform 16%

Source: CMO Survey February 2022

Instead, the CMO Survey puts Real Estate at the top of the list for the highest change of marketing spend (35%) and the highest marketing budget of overall firm budget (20%).

Marketing budget as percent of firm budget per industry

  • Banking/Finance/Insurance 13%
  • Healthcare 13%
  • Pharma/Biotech 9%
  • Manufacturing 2%
  • Mining/Construction 8%
  • Real Estate 35%
  • Tech/Software/Platform 11%

Source: CMO Survey February 2022

B2B vs B2C: who gets a bigger piece of the pie?

While marketing budgets are generally growing across B2B and B2C businesses, B2C Services are taking the lead, with an average marketing spend of 22% of overall firm budget.

Marketing budget as percent of firm budget

  • B2B Product 9%
  • B2B Services 11%
  • B2C Product 22%
  • B2C Services 15%

Source: CMO Survey February 2022

And while the majority of budgets have increased over the past 12 months, B2B Services are unfortunately bucking the trend, with a decrease of 5% in marketing spend on average.

Percentage change in marketing spend in the prior 12 months

  • B2B Product 4%
  • B2B Services -5%
  • B2C Product 5%
  • B2C Services 23%

Source: CMO Survey February 2022

However, things are looking much brighter in the year to come – B2B Product, B2B Services, B2C Product and B2C Services are all predicted to increase their marketing spend.

Percentage change in marketing spend over the next 12 months

  • B2B Product 20%
  • B2B Services 17%
  • B2C Product 12%
  • B2C Services 26%

Source: CMO Survey February 2022

Digital vs omnichannel: what’s the balance?

While recent years have seen a mass exodus to digital-first marketing, the tide is now starting to turn towards more hybrid, omnichannel approaches.

In 2020 and 2021, CMOs funnelled the majority of their budget online, fueled by pandemic restrictions on offline, in-person marketing.

But 2022’s marketing budgets show a clear change in attitude. While Gartner’s CMOs are still allocating 56% of their funds to online channels, more traditional channels aren’t far behind, taking almost half of the available budget.

This more equitable split is echoed by the CMO Survey, which puts the figure at 51% on digital activities, and 49% on non-digital activities.

This sense of equilibrium is also true for the perennial brand vs performance debate: CMOs are reportedly spending 50.1% of their budget on brand awareness and engagement, compared with 49.8% on performance media.

The conclusion is clear: brands are adapting to the changing pace and nuance of customer preferences, rather than trying to push customers into more immediate, digital-only journeys.

Getting into the nitty gritty: where’s the money going?

Currently, 60% of digital spend goes to paid digital media accounts. Across industries, social marketing spend comes out on top, followed by digital display and paid search.

Social media spend is only set to rise, with CMOs allocating 16% of their marketing budget on social media now, 20% over the next 12 months, and a predicted 27% over the next 5 years.

34% of social media activities are currently being performed by outside agencies, and 6% of budget goes to influencer strategies, a figure that’s set to increase over the next few years.

Events are still primarily a B2B expenditure, with B2B CMOs outspending B2C respondents by 5.5%.

And finally, customer experience is a common outgoing, with CMOs spending an average of 13% on CX initiatives.

So to round things up:

The magic number
Marketing budgets sit between 8% and 9.5% of total company revenue, an encouraging resurgence since pandemic budget cuts – but there’s room for further recovery.

Industry by industry
Budgets are generally increasing across industries, with a particularly affluent year for Financial Services, Tech and Real Estate.

B2B vs B2C
B2B Product, B2C Product and B2C Service budgets are thriving, while B2B Service CMOs are struggling to find the funds.

Digital-first vs omnichannel
Things are much more balanced than in recent years, with an almost 50:50 split for digital vs non-digital marketing spend.

Getting into the nitty gritty
Social media and influencer spend is on the rise, but B2B marketers are still dedicating significant budget to events and CX.

Sources:

CMO Survey UK Topline Report February 2022 from Deloitte
CMO Survey UK Firm and Industry Breakout Report February 2022 from Deloitte
The State of Marketing Budget and Strategy 2022 report from Gartner
The Marketing Centre

Feeling nostalgic? Check out our previous blog on B2B Budget Benchmarks

• • •

(Photo by Caitlyn de Wild on Unsplash)

Categories

B2B Insights Crunching The Numbers

Keywords

b2b insights B2B marketing

══════════════════

Author Photo

Beatrice Alabaster

Copywriter

I am a copywriter and, because you are what you eat, I maintain a strict daily regimen of nutritious and diverse words, with taste ranging all the way from Immanuel Kant to Kim Kardashian.