Whether your marketing budget is growing or shrinking, you no doubt need to figure out how to fund marketing’s expanding role, a growing number of marketing channels and the integration of new marketing technologies.
It can be challenging to create a budget that will support your marketing needs and objectives, while also making it past the approval gauntlet of top management. This process requires CMOs to demonstrate marketing’s value. Gartner Vice President and Analyst Ewan McIntyre recently suggested, “How you define your marketing budget is part of your responsibility as a CMO.”
As you define your budget, it can be helpful to compare your spending plans against your peers. In addition, supporting your proposed budget with relevant third-party marketing spend data is an effective way to make a strong case for the funding you need to help grow your company. That’s why we’ve gathered some of the best research reports and analysis we could find to help you validate and win support for your marketing budget.
The CMO Survey - Duke University, Deloitte, AMA (August 2019)
The CMO Survey by Duke University’s Fuqua School of Business, in partnership with Deloitte and the American Marketing Association, collects and disseminates the opinions of top marketers to help predict the future of markets, track marketing excellence, and improve the value of marketing. Founded in 2008, it is the longest running non-commercial survey for and about the field of marketing.
Some 2,575 marketers at for-profit US-based companies participated in this year’s survey. Their companies have revenues ranging from less than $25 million to over $100 billion, spanning multiple industries, and representing a mix of B2B and B2C products and services. The survey covers 10 topics, one of which is “Marketing Spending.”
- This year’s CMO Survey predicts marketing budgets to grow by 8.7% in the next 12 months.
- On average, marketing expenses are 9.8% of company revenues.
- Training and development spend as a percent of marketing budgets reaches highest level in five years at 5.8% of budgets.
The Annual CMO Spend Survey – Gartner (October 2019)
The Annual CMO Spend Survey by Gartner is based on responses from more than 340 marketing executives in North America and the U.K., at companies with $500 million to $5 billion or more in annual revenues, across industries and B2B and B2C products and services. The survey aims to identify how much companies spend on marketing, how those budgets are built, and how and why they will change in 2020.
- Marketing budgets averaged 10.5% of company revenues.
- The total allocated for digital paid media accounts for almost 16% of overall marketing budgets.
- Gartner’s study also found that spending on marketing technology represents 26% of the total marketing budget in 2019.
Bank Marketing Spend Analysis - The Financial Brand (October 2019)
The Financial Brand looked at marketing budgets from FDIC call reports from over 200 banks, comparing them against asset growth, profitability, ROA and ROE. The benchmarks generated are intended to help bank marketers determine whether their marketing budget is large enough. The analysis includes a look at which banks are generating the greatest return on their marketing investments.
- Three-quarters of banks in the sample increased annual marketing budgets between 2015 and 2018. More than one in ten increased marketing budgets by an average of 20% or more.
- Banks with over $10 billion in assets tended to be much more aggressive, increasing their marketing budgets by an average of 10.6% every year between 2015 and 2018, and 40.3% over the study period.
- Banks with less than $500 million in assets, by contrast, increased their marketing budgets by only 5% over the same timeframe, and 21% over the study period.
Annual Franchise Marketing Report - Franchise Update Media (August 2019)
Franchise Update Media published its 2019 Annual Franchise Marketing Report (AFMR) in August. Franchise brands participating in this first AFMR represented more than 13,000 locations, across industries, representing a mix of B2B and B2C organizations, with total combined annual revenues of $8.3 billion and total combined annual marketing spend of $131 million. The report is designed to be a resource for franchisors to study their marketing investments, benchmark their sales and advertising budgets against their own industry categories and set goals and budgets for the year ahead.
- Respondents reported a somewhat balanced marketing spend - with the exception of digital advertising, which played the largest role in their overall budget mix. Social media and websites were the next two leading categories.
- Three of four (74%) respondents had a national advertising fund, and 1 in 3 (32%) had a co-op/regional advertising fund.
- In the previous 12 months, 51% of brands increased the size of their marketing departments and 40% stayed the same; only 9% reduced the size of their marketing teams
Sizing Up Your Spend
Comparing your spending against peers and industry trends can provide meaningful insights into your spending performance and ROI, and give you the validation you need to secure budget approvals. We hope you find these reports constructive as you do the hard work of benchmarking your own marketing budgets.