Industry Standard for Marketing Budget as % of Overall Budget
Does anyone have data on what industry standards are for Marketing budgets as a % of overall budget? And if you have it, the industry standard for IT spend as a % of total budget?
Answers (8)
In general 10% of the overall budget should allocated to marketing efforts.
I learned in college that 20% of the operating budget should 'tradtionally' be devoted to marketing and advertising. However, divding this between marketing (increasing exposure) and sales (generating income) varies. I find that marketing is more expensive, but without it - it is hard to generate sales.
I have always allocated between 15% - 20% depending on the organizational and divisional goals. I would sugest at a minimum to allocate at least 10%.
Michael B
Web Usability & Marketing Expert
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Minimum 10%. Should be 15-20%+, pending on the financial results you seek to generate.
Agree that 20% is "textbook" but today's reality is more like 10-12 for most companies incl sales expense.
Re IT, obviously depends so much on industry. Construction, 2%? Biotech, 15%? Facebook, 50%? :)
Ian M
Strategic Marketing Executive driving demand using cutting edge experiential, entertainment and digital marketing
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Hi Brian,
I Agree with others - usually 10-20% in IT, but also keep in mond 2-5% of that should be spent on measuring the effectiveness of your marketing to ensure you are investing in the right things.
This is an IT statement. Other industries will vary.
The answer is heavily dependent on where your company/product is at in its stage of growth. If you're an early "rapid growth" stage marketing is critical to fuel that growth, so 15%-20% of budget could be expected. Conversely, if a company/or product is at EOL, then you'd want to cut budeget down to nothing to maximize profitability.
The goal for my ecommerce store is to keep the Online Marketing budget (primarily PPC) to a maximum of 10% of total revenue; however, we've found that we are actually able to keep the percentage to 5-6%. This is just what works for us based on margin and COGS.
