B2B Marketing Budget Benchmarks: What should you spend in 2023?
When asking yourself what you need to spend on your B2B marketing, you're straightaway in ‘how long is a piece of string’ territory, and trying to answer it can leave you more baffled than you were to begin with.
To help get your thinking back on track, I’ve dug down into the most current B2B marketing budget trends so you can see who is splashing the cash and who is tightening the purse strings. The good news? There’s plenty to feel positive about.
What are CMOs spending?
In an ideal world, you wouldn’t begin by setting a budget at all – you’d first by define your goals, strategies, and tactics, and work out your costs accordingly.
But for the reluctant realists among us, having a ballpark figure helps determine what a ‘normal’ budget really looks like.
The CMO Survey from Deloitte found organisations are, on average, spending 8% of their revenue and 15% of their total company budget on marketing.
Gartner’s State of Marketing Budget and Strategy 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.
But before you pop open the champagne, 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%.
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 CMO’s 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:
- Banking/Finance/Insurance: -1%
- Healthcare: 17%
- Pharma/Biotech: 10%
- Manufacturing: -10%
- Real Estate: 20%
- Tech/Software/Platform: 16%
Instead, the CMO Survey also 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%):
- Banking/Finance/Insurance: 13%
- Healthcare: 13%
- Pharma/Biotech: 9%
- Manufacturing: 2%
- Mining/Construction: 8%
- Real Estate: 35%
- Tech/Software/Platform: 11%
B2B vs B2C
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.
- B2B Product 9%
- B2B Services 11%
- B2C Product 22%
- B2C Services 15%
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.
- B2B Product 4%
- B2B Services -5%
- B2C Product 5%
- B2C Services 23%
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.
- B2B Product 20%
- B2B Services 17%
- B2C Product 12%
- B2C Services 26%
Digital vs omnichannel
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 last year’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.
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.
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.
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If you’re curious to see how this year’s B2B marketing budgets differ from 2020’s, take a look at our last B2B marketing budget benchmarks blog post.
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