B2B Budget Benchmarks: how much should you be spending?

B2B Budget Benchmarks: how much should you be spending?

When you’re a B2B Marketer it’s hard to know what a realistic budget looks like. Sure, you know that blockbuster explosives and Hollywood actors may not be on the cards but you also know that you need more than a tenner to make an impact.

B2B marketing still receives a lower percentage of overall budget and less marketing spend percentage of company revenues.

To help, we’ve looked at the B2B landscape to see what others are asking for (and getting), as well as the general trends for B2B marketing budgets.

The Magic Number

Opinions as to how much of your revenue you should spending on marketing will vary depending on who you ask. 

The CMO Survey Highlights and Insights Report 2017 from Deloitte, Duke University and American Marketing Association, found organisations are, on average, spending 7.9% of their revenue on marketing and 11% of their total company budgetWhereas, according to Gartner CMO Spend Survey 2017-2018, the number is higher – with organisations dedicating 11.3% of overall revenue to marketing.

Different industries, different budgets

This number also changes depending on what industry you are in. According to the Highlights and Insights Report, if you are working in Education, Consumer Services, Consumer Packaged Goods or Transportation you can expect a healthy marketing budget of 11% or more of company revenue.

Source: CMO Survey and Deloitte Digital

When it comes to percentage of overall company budget, Consumer Packaged Good companies receive nearly a quarter towards marketing. This is followed by Consumer services (15%), Tech Software/Biotech (15%), Communications/Media (13%) and Mining/Construction (13%).

Source: CMO Survey and Deloitte Digital

B2Bers vs. B2Cers 

We know budgets differ by industry, but how does B2B stack up in comparison to B2C? In short, both are seeing budgets grow but B2C is still receiving more – both in terms of percentage of overall revenue and budget.

Percent change in marketing budgets:

 Past 12 Months  Next 12 Months 
B2B Product6.2%9.3%
B2B Services7.2%8.5%
B2C Product6.5%9.0%
B2C Services9.9%8.9%

Source: CMO Survey


Across the board, marketing budgets are growing for both B2B and B2C (with the exception of B2C Services).
B2B marketing, however, still receives a lower percentage of overall budget and less marketing spend percentage of company revenues.

Marketing budget as percent of firm budget:

B2B Product:9.2%
B2B Services:8.9%
B2C Product:16.0%
B2C Services:14.9%

Source: CMO Survey


Marketing spending as percent of company revenues:

B2B Product:6.3%
B2B Services:6.9%
B2C Product:9.6%
B2C Services:11.8%

Source: CMO Survey


Although B2Bers have less share for their marketing budget, both spend their funds in similar ways.

The move to digital

When it comes to media spend, traditional media has seen a drop while digital marketing spend rises – no real surprises there then.

Although digital spend is increasing faster for B2C, the B2B product sector has had the most noticeable drop in traditional media (-3.6%). This is most likely due to changing buying habits, with B2B buyers doing extensive online research before committing to any one product.

Source: CMO Survey and Deloitte Digital

So what does this all boil down to?

  • Magic number for marketing budgets: about 8-12% of revenue is average, although it varies by industry
  • B2B vs. B2C: Both are seeing budgets increase and spend in similar ways, but B2C receives a bigger cut of the pie
  • Shift to digital: All are shifting focus to spend more on digital, with B2B products having the largest drop in traditional media

Sources:

Wall Street Journal

CMO Survey and Deloitte Digital

Gartner CMO Spend Survey 2017-2018

CMO Spend Survey Report

[Photo by NeONBRAND on Unsplash]