When I was hired for my first creative role, I got really excited to pitch new, exciting ideas to my team and clients. And I thought — as long as I had data to support the potential success of a project — that my clients would be thrilled to hear these ideas.
Which they were. But they were also cautious, and one of their biggest concerns was, “Okay, this sounds great … but how much is it going to cost?”
What’s a typical marketing budget percentage to plan for?
As of February 2021, Deloitte’s annual CMO Survey reports that marketing budgets are now roughly 11.7% of total company-wide budget.
While your own marketing department’s budget depends on a variety of factors — including industry, company revenue performance, and business needs — this should help you ballpark a reasonable percentage of your total company-wide budget that you should allocate for your marketing teams.
Marketing Budget Percentage of Revenue
The U.S. Small Business Administration recommends small businesses (businesses with revenue less than 5 million) allocate between 7% and 8% of total revenue to marketing — assuming your business has margins in the range of 10-12 percent.
The amount of revenue businesses allocate to marketing has increased steadily over the past 10 years, with average marketing percentage of revenue landing around 13% in 2021, compared to just 8% back in 2011.
B2B Product industries allocate, on average, roughly 10% of revenue to marketing, which is similar to B2C Services (10.1%). B2B Services and B2C Product allocate higher numbers of 15% and 18%, respectively, of total revenue.
Marketing Budget Percentage by Industry
Deloitte’s 2020 CMO Survey found B2B (product-focused) companies attribute roughly 9.4% of overall budget to marketing efforts, while B2B (services-focused) companies attribute 11.4%.
Alternatively, if you work for a B2C (product-focused) company, Deloitte reports 15.9% of overall budget is the average given to marketing teams — for B2C (service-focused) companies, this is closer to 12%.
Of course, the type of business you work at (B2B or B2C) is only one factor when determining marketing budget percentage. Industry is a major factor, as well.
For instance, marketing expenses are highest in the Education sector at 19.4% of total budget — and they’re lowest in the Energy industry, at roughly 4%.
If you work in the healthcare industry, you might expect to see a marketing budget around 7% of total budget.
Alternatively, consulting services typically attribute 13%. Lastly, technlogy/software platforms attribute 12% of total company budget to marketing.