Glad you're here! Enjoy this post.

If you want my team to just do your marketing for you, click here.

1. How Much to Spend on Your Marketing Budget By Industry and Season of Business

How Much to Spend on Your Marketing Budget By Industry and Season of Business 

No matter your business’s size or goals, your ultimate success is driven by this:

Your overall marketing strategy.

That’s because a solid marketing plan grows brand awareness. It generates leads. And ultimately, it boosts your bottom line through an increase in sales.

Due to the vital importance of a robust and effective marketing strategy, the following sections of your marketing blueprint will help you create a marketing plan that gets results—beginning with the most fundamental step: determining your overall marketing budget.

Unfortunately, many business owners skip this vital step and never learn the full potential of their marketing strategy.

Instead, they focus on areas like their messaging, logo and branding, and maybe even a few different marketing tactics like ads and social media. Of course this is all well and good, but without a clear plan for getting that messaging out into the marketplace, even the best branding and tagline won’t do much for your sales numbers.

In other words, it's’ your marketing budget that determines your strategy for getting the word out about your business—and when you get right down to it, that’s the bottom line.

So to help you determine your current (and future) marketing budget, consider the following points. They should help you get an idea of how much to spend on your outreach to make the most of your dollars while getting your company’s message front and center.

The Factors Affecting Marketing Budgets

To make an intelligent decision on how much to budget for your marketing, there are three things to consider: 

Your company’s current financial status, your industry, and the season of business you’re in. 

To get you thinking in the right direction, ask yourself the following questions.

  • What is your general marketing strategy?
  • What is your available cash/revenue?
  • Are you launching a new product or service?
  • Are you a new business in your market, or are you already well-established in the community?
  • Are you in a high- or low-margin industry?
  • Are you trying to maintain or gain market share?

The answers to these questions affect how much it will cost you to attract new clients. 

For example, a brand new company may need to spend more on marketing to establish brand awareness. Similarly, new products and services often need a more aggressive push to become well known.

On the flip side, a well-established company may not need to spend as much—especially if you already have healthy sales and a good word-of-mouth reputation.

For example, recent studies conducted on marketing budgets have come up with these general guidelines:

  • Spend 5% of total revenue on marketing to maintain current market share
  • Spending 8% of revenue will help you gain market share
  • New companies should spend 12% - 20% of gross revenue on marketing
  • Established companies can lower that number to 6% - 12% of gross revenue
  • Startups can focus on spending 5% of revenue target in year 5
  • New product or service launches do well with 5% of spend on revenue target in year 5

Marketing Budgets by Economic Sector

The amount you spend on marketing is also affected by the economic sector or industry in which you operate. 

2024 reports show that businesses selling consumer products tend to spend the most on marketing—averaging roughly 15.1% of their total revenue on advertising. That’s over double the amount spent by businesses selling consumer services, which average about 6.5% of total revenue.

In the business-to-business world, these numbers are even lower—with B2B product providers spending about 7.8% of their budgets on marketing and B2B service providers spending an average of 5.9%. 

Here are some stats across a number of different industries. Where does your company fit? Notice that the amount of total revenue spent on marketing can vary wildly from one business to the next.

  • Banking/Finance: 8%
  • Communications/Media: 10%
  • Consumer Packaged Goods: 9%
  • Consumer Services: 6%
  • Education: 3%
  • Energy: 1%
  • Manufacturing: 13%
  • Construction: 3%
  • Retail Wholesale: 14%
  • Service Consulting: 21%
  • Technology: 21%
  • Transportation: 6%

It’s also worth noting these numbers reflect the averages of well-established companies. And remember, if you’re new, it’s going to require a larger upfront investment to make a name for yourself—often up to 10-20% of total revenue.

One other thing to note is that these numbers are averages and the results are, well, average—meaning this level of ad spend will get you the same amount of exposure as the competition. 

If your messaging is better than the competition, that may be fine. But if you can spare the additional costs, it may be worth the increase in exposure—especially in the beginning days of your campaign.

Here is a graph of the average spend in 2022 by economic sectors.

The Power of Knowing Your Numbers

The above information will help you make solid long-term goals for your marketing budget. However, in the short-term you need to be mindful of your annual revenue and expenses. That way you can make a marketing budget your business can comfortably afford.

Once you’ve determined how much you’re willing to spend annually, divide that number by twelve to get your monthly budget. You’ll then use this number in the following sections of your Marketing Blueprint to determine your priorities over the next year.

Remember: as you go, your cash allocation will change. For instance, if you’re just getting started, you need to invest in a good website and clarifying your overall marketing message. This requires investment costs up front and may be the sole use of your monthly budget until completed.

Once you’ve got the basics set up, your marketing strategy—and how you divvy up your budget—becomes a matter of creating content and discovering the right channels for your business. And then, when you do, pumping up the winners to improve ROI.

The important thing is to get going—and that starts by determining your beginning marketing budget. So before you move on, use the pointers above to decide how much you’re willing to spend. Once you have, continue through this blueprint to find the best uses of that cash moving forward.

Your Step-by-Step Marketing Blueprint:

Presale: Reaching Cold Prospects

1. Your Marketing Budget Guidelines

2. Your Target Audience

3. Your Message

4. Your Website

5. Your Traffic Channels

6. Your Nurture System

The Sale: Converting Customers

7. Your Sales Conversion Strategy

Post Sale: Creating Raving Fans

8. Your Customer Lifetime Value

9. Your Referral Program