What should I spend on marketing?

marketing strategy

Written by Tiz Porreca, Founder & Director of Amongst Marketing

A common approach to establishing a marketing budget is to allocate a percentage of your revenue. While this can vary depending on your industry and business type, a general rule of thumb is to allocate between:

2%-5% for B2B companies
5%-10% for B2C companies

This can be a starting point for budget planning, allowing you to ensure that your marketing investments are in line with your financial capabilities and goals. Let’s also review other important factors to consider when creating your marketing budget.

Evaluate past performance

Look at all the marketing initiatives you ran within the last 12 months and evaluate their outcomes. Look for patterns and identify which strategies gave you good results and which ones fell short. By analysing the data and statistics available, you can gain valuable insights into what has worked for your business and use this information to guide your future budget allocation.The money you have spent in the last 12 months could also be a starting point for your budget for the next 12 months.

Categorise your marketing expenses

Organising your marketing spending into meaningful categories helps you understand the distribution of money across different marketing channels. Some examples of categories could be:

Website development
Digital ads
Social media
Copywriting
Videos
Networking (events or memberships)
Subscriptions
Sponsorship
Promotional Items
Collateral (Flyers, business cards)
Radio ads
PR

Doing this will allow you to get a better view of where your marketing dollars are being invested and assist you in making better decisions regarding budget allocation moving forward.

Evaluate your marketing mix

Once you have identified the categories of your marketing spend, you can then look at the balance of your marketing mix. Think about whether the allocation of dollars aligns with your current objectives. By analysing your mix, you can identify any gaps, redundancies, or areas that may require adjustments to optimise your marketing budget.

Create an inventory of your current marketing assets

Looking at the collateral you already have means you don’t have to reinvent the wheel or spend money unnecessarily. Take an inventory of assets like photos, videos, blog posts, brochures and podcasts, and ask yourself: can these be repurposed or updated and reused? Using what you already have saves time and money at the planning and budgeting stage of your marketing.

Understand who and what resources you have

What or who do you already have on your marketing team – in-house or outsourced? Listing these helps you define the resources you have and those you need, whether it’s people, equipment, or technology.

Make sure you prioritise

Once you have reviewed the above information, you will be in the best position to then PRIORITISE the dollars you can allocate to the marketing activities you want to implement. There are several ways to rank your marketing activities, for example:

IMPACT vs EFFORT

What marketing activities will provide the biggest impact with the least amount of effort?

COST vs RESOURCES

What marketing activities can I activate using the best of my resources at the least cost?

No one can or should dictate to you what your marketing budget should be – it is not the same for everyone, and only you can define what that looks like. Having said that, you do need to allocate something even if it changes from year to year. By taking the time to properly review your past marketing activities and your current inventory of assets and resources, you will be in a strong position to understand where to direct your marketing budget – no matter what size.