The Right Budget for Marketing: 2017 Data Results
Gartner recently published its findings on what percentage of revenues companies spent on marketing in 2017. The figure may surprise some of you.
If you’re in marketing, sales or senior management, you are smart to wonder how much your company should invest in marketing—and within the marketing umbrella, I am including branding, advertising, digital marketing, public relations and social media.
It turns out that at many companies budgetary decisions on marketing are somewhat arbitrary: the number is based simply on comfort level, derived from a certain investment figure, or according to what was spent in prior years.
On the other hand, companies that understand the importance of marketing and sales development view budgets differently. They view them as an investment in their own growth. Those companies also know that if they under-invest in marketing, their competitors are likely to out-market them—and that’s risky.
Finding the Magic Number
According to the Gartner CMO Spend Survey 2017-2018, companies invested an average of 11.3% of their annual revenues in marketing in 2017. Gartner also found that chief marketing officers are spending less on internal marketing staff and increasing their agency budgets to get the marketing expertise they need.
So how much should your company invest in marketing? It’s a critical decision. After all, marketing has a direct impact on your company’s growth track.
Think about the companies that have quickly risen to the top in our industry—or any industry, for that matter. They all have one thing in common: they marketed themselves heavily. They used marketing, public relations and social media to the fullest extent—and the payoff was huge.
Now think about how much you want your company to grow. Do you want to have moderate or strong growth? Do you want to invest more or less in marketing than your competitors?
You Get What You Pay For
Once you decide on a budget, invest it wisely. Good marketing need not be expensive, but it is not cheap. Don’t expect great marketing from an amateur, or you may be gambling your company’s growth rather than investing in it. In fact, companies that don’t put their marketing dollars in the hands of experts often wind up with websites, social media or marketing materials that look amateurish and drive away prospects.
If you’d like to evaluate your marketing budget and how you’re spending it, feel free to reach out to me. I can be reached at Info@StrategicVantage.com.
By Rosalie Berg, President, Strategic Vantage