Analytics & Testing, Content Marketing, Ecommerce and Retail, , Marketing Automation, Marketing Infographics, Sales Enablement, Search Marketing,

What’s the Right Marketing Budget as a Percentage of Revenue?

There are those uncomfortable moments at times where a company asks me why they’re not getting as much attention as their competitors. While it is possible for a business to overtake competitors because of a superior product or people, it’s also more likely than not that the company with the greatest investment in sales and marketing will win. Even a superior product and incredible word of mouth can’t always overcome incredible marketing.

There are three exceptions to the rule of marketing growth as a percentage of revenue.

  1. Product Superiority – your product is so good that your customers and the media invest their time and energy without impacting your budget.
  2. Affiliate Superiority – instead of paying for marketing, you provide discounts rewards to your customers who invest their time and energy. While it’s not an expense, it is a reduction in revenue.
  3. People Superiority – perhaps you have a well-known thought leader who is asked to speak everywhere, providing incredible public relations opportunities without the necessary budgetary investment. Or perhaps you have a killer staff that results in fantastic testimonials, reviews, and social media sharing that drives growth.

Let’s be honest, though. While we tend to believe we have superior products and people, it’s often on par with our competitors. In this case, the rule applies. Marketing budget as a percentage or revenue must increase if you hope to accelerate your business’ growth. What’s that sweet spot? This infographic from Captora provides some insight:

  • 46% of companies spend less than 9% of overall revenue.
  • 24% of companies spend 9 to 13% of overall revenue.
  • 30% of companies spend greater than 13% of overall revenue.

Company size has an impact as well. Enterprise corporations spend 11% of the budget on average while smaller companies spend 9.2% of the budget. Companies who plan to outperform their competitors invest 13.6% of overall revenue to do so.

It’s all about the numbers, marketers are constantly trying to figure out if they are being successful in their marketing efforts. From monetizing budget and leveraging technology to determining organic search success and personalizing your efforts, marketing in the digital age can feel like one big math test. In this infographic, Captora examines how to get the right budget, leverage the right tools, solve the search equation, and test your content for maximum results.

Of course, every company believes they have the best product or people… so the task of getting them to commit to a larger marketing budget is always a challenge. Hopefully, this research will help you as you’re tasked with capturing market share!

Marketing Metrics, Math, Numbers and Budgets

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