How much are B2B businesses spending on their marketing? We get these question a lot. And it’s usually accompanied by other questions like: “am I spending too much on my marketing?”, “what is a good business spend on marketing?” or “am I spending too little?”.
It’s an understandable anxiety, particularly if you aren’t getting the marketing results you’d been hoping for. That’s when businesses start to wonder if they’re missing a trick. Or if the budgets of other businesses vary wildly from their own.
But the answers to these questions are frustratingly vague. What little information is available on this subject fails to take into account crucial details, like:
Number of employees
responsible for their marketing
(i.e., start-up, established, profitable)
And what areas of
marketing they are focusing on
We conducted a B2B business survey so that we could provide a real answer to the question; “how much do B2B businesses spend on marketing?” without skimping on the important details.
In this article, we’ll address how business size, number of employees, business stage, and marketing focus affect spend.
Here’s what we found.
Business Spend on Marketing is Less Than You Think
Before we break down and analyse the data, let’s take a look at the response we received to our top-level question: “what percentage of your revenue do you spend on marketing?”.
54% of B2B businesses that answered this question spent less than 10% of their business revenue on marketing. A further 18% spent between 11% and 25%, and only 28% indicated that they spent a higher percentage.
Enlightening? Not so much.
This data, as it stands, doesn’t give us any insight into the business factors that might be affecting the results. For example:
- The size of the businesses that responded to the survey
- What stage they’re at in their journey
- Or what they’re spending their budget on
So let’s dive a little deeper.
Business Spend on Marketing by Business Size
Arguably the most important contributor to how much a business chooses to spend on their marketing is business size.
That’s a lot of numbers. What does it actually mean?
The general trend demonstrated by the figures above is as you’d expect; bigger companies are generally spending more of their revenue on their marketing (with the exception of companies that have 250+ employees) and have more team members dedicated to their marketing efforts.
For the sake of simplicity, here’s are some key takeaways from our findings:
If you’re an individual who doesn’t have a supporting team, businesses of a similar size (93.3%) tend to be spending less than 10% of their revenue on their marketing efforts.
If you’re a small business with 2-9 employees, businesses of a similar size tend to be spending less than 10% of their revenue on their marketing efforts, but by a much smaller margin (45%) than individually-run businesses. This means that a total of 65% are spending up to 25%.
If you’re a business with 10-49 employees, you should know that 59.4% of businesses of a similar size are spending less than 10% of their revenue on their marketing efforts. A further 25% are spending between 11% and 25%. This means that a total of 84.4% are spending up to 25%.
If you’re a business with 50-249 employees, most businesses of a similar size (30.8%) spend between 11% and 25% of their revenue on marketing. Only 15.4% of businesses of this size are spending less than 10%.
What may come as a surprise is that businesses with over 250 employees average at spending less than 10% of their revenue on their marketing. This may indicate that the stability and profitability of companies of this size simply reduces the need for a higher proportional marketing spend.
Business Spend on Marketing by Business Stage
A business’ size doesn’t always align with their business stage. A start-up that requires a substantial team to operate, for example, may have more than 50 employees but not yet be profitable. With that in mind, the business stage plays an important role in determining marketing spend.
Brand new businesses primarily spend less than 10% of their revenue on marketing (62.5%).
Similarly, businesses with a brand new idea or product tend to spend less than 10% of their revenue on marketing (54.27%).
Businesses that are in the early stages and have a website are likely to spend more than brand new businesses and businesses with a new idea or product. 53.4% spend under 10%, while a further 28.6% spend between 11% and 25%. None of the early stage businesses who responded to our survey spent more than 25% of their revenue on marketing.
Established and profitable businesses tend to spend more than early stage businesses with a website; 42.4% spend less than 10%, 15.2% spend between 11% and 25%, and 12.1% spend between 26% and 50%. Our survey found that there was even a small percentage of established and profitable businesses (3%) spending between 51% and 75%.
In the case of businesses that are established but not yet profitable, the majority (55.6%) were spending less than 10%. A quarter spent between 11% and 25% and just 11.1% spent upwards of 26%.
How do I use this data?
The figures included above are primarily designed to be used as a benchmark for your own company. Although we don’t recommend using hard and fast rules to determine your marketing spend, knowing how much companies that are similar to yours are spending in proportion to their revenue is invaluable information.
We recommend comparing your own spend – relative to company size, stage, number of employees, and area of focus – to the averages listed above. If you discover that you are spending significantly more or less than companies that are similar to your own, it may be time to speak to a marketing consultant to find out why and, more importantly, if you should continue to do so.
Why not book a free call with Murray Dare, we’ll advise you on a marketing spend that’s right for your business; placing you firmly on the path for success, no matter your business size, stage, location, or target market.