‘Struggling to get a hold of your marketing budget? Wondering what you need to do to outrank your rivals?
You’d want to know what a typical marketing budget cost is, Right?
How much is enough or too little?
It’s 2024, and what you’ve done so far has gotten you where you are.
Now you’re ready for the icing on the cake (huge profits).
This blog dives into industry-specific budgets for 2024.
No more guesswork, just actionable insights, and data-driven results.
Get ready to move your revenue needle by knowing how much and where to spend your marketing dollars.
Let’s dive in…
How Much is the Average Marketing Budget by Industry Most Recent Stats
1. Definition and Importance of Marketing Budgets
So, technically, what is a marketing budget?
That’s a simple question: but let’s start from the beginning.
A marketing budget is the amount of money a company sets aside for its product or service, or promotions.
I know you can relate to this. It’s like planning for Christmas or a special occasion; you put money aside just for that purpose.
How much? We’ll get into that shortly.
Why is marketing so important?
Well, you know what they say, if you don’t plan, you won’t profit. OK… they didn’t say that I did. If you want to make unemotional marketing decisions, strategic planning is key.
Thinking ahead or being proactive helps you make smarter business decisions. Plus, you get to see where you’re spending your funds. Like our personal budgets, many times we can’t account for where the money was spent.
You don’t want that to happen, with your business budget. Every dollar should be accounted for.
Five Factors That Will Influence Your Budget
Budgeting is never a set-it-and-forget-it or one-size-fits-all.
Of course, there are variables; you have a unique business, and your budget will be uniquely different.
- Company Size: Larger companies often choose to spend more (they have more).
- Industry Type: It’s known that there are industries that rely heavily on marketing.
- Business Forecast: Where are you trying to go with your business, and how fast do you want to get there?
- Target Market: Who is your target audience, and how will you reach them?
- Rival’s Budget: How are your competitors spending on marketing, and how can you keep up?
The Impact of Economic Conditions on Marketing Spend
Unfortunately, companies don’t always make the best decisions during economic downturns, and cutting their marketing budget is often the first cut made when times get tough.
But if you want to outpace your rivals, doing the opposite will put you in the driver’s seat.
So, in hard times, look for other ways to cut spending, and when the market resumes, you’ll be ahead of the pack.
Overall Marketing Budget Trends in 2024
Average Percentage of Revenue Allocated to Marketing
Let’s start at the beginning… it depends. We break down the marketing budget and type more within this article. But on average, companies spend about 9.8% of their marketing. If you aren’t close to that, don’t worry; there are a lot of variables—business type, size, etc.
We’ve heard of businesses that didn’t pay for marketing and made a mint. So don’t get too hung up on those numbers—you can make things happen with data-driven info and creativity.
Budget Allocation Compared to Previous Years
We’re seeing shifts compared to a few years ago. Much of the marketing pie is spent on digital marketing, while traditional methods like print ads are getting fewer dollars. Data analytics and marketing technology are seeing an uptick in marketing dollars.
Marketing Spend Distribution Emerging Trends in 2024:
- Video content and podcast allocation are increasing.
- Increased emphasis on customer experience and personalization
- Influencer collaboration marketing
- Climbing spends on machine learning and AI for marketing.
1. Technology and Software Industry
Average Marketing Budget as a Percentage of Revenue
Tech companies spend the most on marketing. These companies make the most, and the competition is fierce.
According to research, tech companies spend about 15% of their revenue on marketing. Most other industries spend less!
The Largest Areas of Marketing Investment
Here are the top 4 spots:
- Content marketing (blogs, whitepapers, case studies)
- Digital advertising (PPC, social media ads)
- Events and webinars
- Product demos and free trials
Tech Marketing Budget B2C vs. B2B Comparison
Business-to-customer (B2C) businesses spend more on social media and influencer alliances. Business-to-business companies, alternatively, focus on account-based marketing and industry events.
Account-based marketing (ABM) is a strategic, highly targeted approach to marketing. Instead of what used to be called “spray and pray” marketing, ABM is more calculated.
Instead of marketing to everyone and hoping to find those interested in the offer, companies look for highly likely candidates who will benefit from their product or service.
Benefits of ABM:
- Higher ROI: Because ABM focuses on high-value accounts, it often leads to higher returns compared to, broader marketing strategies.
- Efficient Resource Allocation: Resources are concentrated on a smaller number of accounts, making the marketing efforts more efficient and effective.
- Stronger Customer Relationships: ABM fosters deeper, more meaningful relationships with accounts, leading to better customer retention and loyalty.
- Alignment Between Sales and Marketing: ABM encourages close collaboration between sales and marketing teams, leading to more cohesive and effective strategies.
2. Retail and E-commerce Sector
Typical Marketing Spend for Online and Brick-and-Mortar Retailers
Standing out is getting harder by the year, and retailers are feeling the pressure—and their marketing budgets show it. Online retailers spend about 10-12% of their revenue on marketing, while brick-and-mortar stores spend between 8-10%.
Omnichannel Marketing Strategies Budget Allocation
Omnichannel marketing distribution is the strategy of choice for retailers.
Why?
Because retailers have such a diverse group of buyers, they want to meet each group where they are.
Here’s the budget breakdown:
- Social media advertising: 25%
- Email marketing: 20%.
- SEO and content marketing: 15%
- Loyalty programs: 15%
- In-store promotions: 15%
- Traditional advertising: 10%
Seasonal Variations in Marketing Budgets
We’ve all heard that retail can be a rollercoaster ride and that many companies profit the most from, key holidays.
As expected, retailer revenue spikes during special occasions and holidays—Christmas, Black Friday, and Cyber Monday, to name the biggest shopping days.
But now retailers have learned to smooth out their marketing to generate a steadier flow of funds and not run their business in fear or panic.
3. Healthcare and Pharmaceutical Industry
Healthcare Providers’ Marketing Budget Trends
Times are changing things, even healthcare services are increasing their marketing efforts. (Have you tried to schedule an appointment 3-month waitlist.)
The healthcare industry spends about 7-10% of its revenue on marketing. The majority of those marketing dollars go toward community outreach and patient education.
Pharmaceutical Marketing Revenue Spend
Can you think of the last time you haven’t seen a gazillion pharmaceutical commercials?
That tells you they spend a large portion of their revenue on marketing. The evidence is clear.
Pharma companies distribute 20-30% to marketing; they are the marketing heavy hitters.
However, a large percentage of their marketing budget goes toward healthcare education. They must educate healthcare providers about the new and existing drugs and treatments, that are available.
Regulatory Influences on Marketing Budgets in Healthcare
Healthcare is sensitive; a misstep can cause serious damage and can be dangerous or deadly to their customers. Unfortunately, mistakes still happen. Therefore, healthcare providers reserve a significant budget chuck for legal reviews and compliance stabilization.
4. Financial Services and Banking
Average Marketing Budgets for Banks and Credit Unions
In general, financial institutions spend about 8% of their income on marketing. Their customers’ biggest concerns are trust and innovative banking features, like digital banking.
As this is one of their main focuses, they primarily concentrate on building trust and promoting their digital services. Additionally, they’re also investing in financial wellness and personalized experience tools.
Investment in Digital Marketing for Fintech Companies
Fintech companies are the new cool kids on the block, and I love them. Why? You can let your fingers do the walking. Fintech is simple, easy, and available. The marketing dollars are well worth it—about 15-20%. Since their clients are online, that is the channel where they spend the most.
Compliance and Its Impact on Marketing Spend
Just like healthcare, financial services must deal with compliance and regulations. Around 5-10% of their marketing budget often goes toward safeguarding their marketing materials to meet industry regulations and compliance.
5. Manufacturing and Industrial Sectors
B2B Marketing Budget Distribution in Manufacturing
We can learn a lot about marketing from manufacturing companies. They spend about 6-8% of their revenue on marketing. They center their efforts around displaying their expertise and building relationships.
The Impact of Digital Transformation on Marketing Spend
Digital transformation is reshaping marketing spending, with companies giving more budget to digital channels. This shift allows for greater personalization, real-time data analysis, and targeted campaigns.
These advantages lead to more efficient and impactful marketing strategies.
As businesses adapt to digital tools, marketing spending is increasingly directed toward online advertising, content creation, and data-driven analytics.
Trade Show and Event Marketing Budgets
With all the rage about TikTok dance challenges and online shopping, who would think that trade shows are still a profitable marketing investment?
Especially with manufacturing companies, which typically distribute 30-40% of their marketing budget to trade shows and events.
As you can see, this is their bread and butter; and they put the funds where they count the most.
I used to be in an industry that relied heavily on this type of marketing. And trade shows…
Why do they work so well?
They incorporate all emotions and personality types. There is something for everyone: education, entertainment, emerging trends, and industry stats.
At events, you also get to put a face with a product name—it’s no longer just the best product ever, it’s “Samantha is so sweet and was able to answer my question.”
Now you have a raving fan and a customer for life. Equally important is a ranking advert.
So regardless of all the social media hype, some industries get the most traction from in-person marketing.
Key Takeaways on Industry-Specific Marketing Budgets
Remember, no budget is a set-and-forget or one-size-fits-all. There are always exceptions to every rule.
But here are 5 key pointers:
- Add your marketing budget to your overall budget, regardless of market conditions or profits.
- Analyze your competitors’ marketing spend—what and where are they spending their money?
- Practice the same concept as B2B marketers; they use a more strategic approach.
- Do your due diligence to decide where to spend your marketing dollars.
- Find where your target market is, meet them there, and get personal, engaging, and helpful.
Now it’s your turn how do you plan to spend your marketing dollars?
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FAQs
How do small businesses’ marketing budgets compare to large corporations?
Small businesses may spend more because, initially, no one knows them, and they must get the word out quickly. The fastest way to get the word out is through ads, which can be costly. Small businesses often generate less revenue, so the percentage spent on marketing is higher.
On the other hand, the opposite is true for large corporations—the percentage is smaller, but the dollar amount is larger because they typically earn more.
2. What percentage of marketing budgets is typically distributed to digital channels?
Today, digital spending is epic. Bill Gates was famous for saying, “If you’re not on social media, you are not in business.” That said, companies heard it, and the data shows there’s no way to circumvent online marketing if you want to compete with your rivals.
The average spending budget on digital channels is 60-70% of the company’s marketing budget. As you can see, they are spending a huge part on digital marketing.
3. How often should companies review and adjust their marketing budgets?
According to experts, companies should review and adjust their marketing budgets quarterly. This gives you time to respond to market changes.
What are the most common areas where marketing budgets are overspent?
Commonly overspending areas include:
- Paid ads (especially if not well-targeted)
- Overspending on website redesigns
- Underutilized marketing technology and software
- Collaboration and sponsorships without clear ROI
How do global economic factors affect marketing budget trends?
Today, we live in a global economy, and the pandemic proved our connectivity. Global economic ups and downs are often factored into marketing spend, but they shouldn’t change how much companies spend on marketing.
Typically, many companies cut back in times of uncertainty. However, many marketers lean in more when times get hard and keep their marketing spend regardless of the economic forecast.
