Marketing Budget Pie Chart

As new, more advanced technologies continue to develop, marketing budgets are following suit with large shifts in both the percentage of dollars being spent and the channels they’re being spent on. The days of having only a handful of marketing tactics to include in your mix went away with Madison Avenue’s martini lunches. So how do you determine the right marketing budget for your business?

The truth is, there’s no magic one-size-fits-all formula. Average marketing budgets total approximately 11% of total company budgets and 7% of company revenues, but are affected by many factors. Things such as the business type, size and age are key contributors—with slight deviations between B2B and B2C and smaller, younger and more digital-based businesses spending the most. While this article isn’t designed to give you an exact total or breakdown of what your budget should be, we hope it will provide a framework and take some of the mystery out of creating your next marketing budget.

Recent Trends in Market Spend

Today, more personalized digital marketing channels allow us to not only speak to customers, but interact with them. We’re able to use targeted marketing analytics tools to measure the effectiveness of each campaign and adjust accordingly. While CFOs don’t typically provide a lot of wiggle room in the amount of established budgets, they’re a little more flexible on how you allocate those dollars within each budget. This opens up a whole new world of opportunity for the success of your marketing.

Digital First

It’s no surprise that digital marketing is a major part of total marketing spend and is continuing to grow. Today, digital accounts for 44% of the marketing budget and is expected to increase by 10% in the next five years—taking dollars away from more traditional marketing channels.

Personalized Marketing

No longer do marketers have to cast a wide net in hopes of reaching a few hot leads. Thanks to new technologies, we are now able to target audiences based on their demographics, behaviors and location and test different messages, tactics and promotions to hone in on what resonates and drives conversion the most. For this reason, companies are allocating more marketing dollars to CRM (Customer Relationship Management) and marketing analysis tools than ever before.

Mobile Marketing

96% of Americans own a smartphone—most of them are on it every waking hour. Smart businesses are using this opportunity to reach an entire host of prospects who use their phone to search, learn about and purchase products and services, and target them with relevant messaging. A large part of their mobile strategy is optimizing their websites, social media pages and emails to be mobile friendly, as well as utilizing SMS to send promotions, follow-ups and appointment reminders to customers.

Social Media

Social media spending has increased more in the past year than ever before and it’s not done yet. In the past ten years, social media has increased its share of spend from just 3.5% to 12%. Today, 82% of businesses are including social media as part of their marketing plan and forecasts have it increasing by 66% over the next five years.

Marketing Technology

Technologies such as content management, customer relationship management, marketing automation, and analytic tools are continuing to garner more marketing dollars as businesses shift their focus from products and services to experience. Today, marketing technology systems account for nearly one-third of marketing budgets at a time when it’s more important than ever to measure performance and show a return on investment—especially if you want to continue to get those budgets approved.


Despite the inability to accurately measure its impact, brand marketing is still a strong player in the overall marketing scheme. In fact, it has increased over the last five years by 3%. It just goes to show you the power of a strong brand.


One thing to keep in mind with any marketing budget is the actual market. In addition to your size, age, industry and competition, it’s important to look at the market as a whole. What is the state of your industry? The domestic economy? International trade? Are there new technologies on the forefront? All of these things should be taken into account when developing your overall marketing budget.