The marketing budget for every business usually depends on its size and objectives. Therefore, it’s going to differ from one company to another. If you are planning your marketing budget for 2022, this article will give you insight into how much other businesses are spending on marketing. We will also look at what marketing strategies people are mainly investing in. And necessary adjustments that have to be made due to external factors such as the Covid-19 pandemic. Because financial markets are constantly changing, Marvel Marketing updates this post from time to time to reflect current digital marketing budgets.
Do Marketing Budgets Change?
Marketing budgets have always had a similar curve. They either remain the same or increase slightly from previous years. Considering the effects of the pandemic in 2020 and some parts of 2021, marketing budgets had decreased because most businesses were financially constrained. But as things are returning to normal, marketing budgets have returned to their ordinary rates.
You will be surprised to know that financial experts projected marketing budgets for most businesses in 2021 to reach 12% of the overall budget. This is according to the CMO survey report. It did exceed the prediction and reached a high of 13.2% before going to 8.6% in August last year. The bottom line is marketing budgets are constantly fluctuating. And businesses shouldn’t be afraid to adjust budgets to suit their current financial situations.
What is in a Marketing Budget?
Everything involved in a business’s marketing efforts should be in the budget. Because not all companies are the same, some things may or may not be included. Below, we have listed common marketing expenses that should be included in a budget;
- Brand awareness campaigns costs
- Marketing research
- Social media marketing
- Digital marketing agency fees
- Marketing training
- Salaries for marketing employee
- Marketing audit
- Mobile marketing
- Marketing analytic services
- Marketing tools and technology
- Content creation
- Influencer services
Allocation of Marketing Budgets
For most companies, allocation of the marketing budget is usually the most challenging part. The management must be careful in spreading the funds across various marketing expenses. We have gone through several reports such as Gartner and Forrester Research, and here is what we have deduced from the allocation patterns of various companies;
- At least three-quarters of marketing budgets are allocated to digital channels. This is from Gartner’s survey.
- The CMO survey also noted that most companies spend most of their budget on digital marketing.
- From both surveys, business owners are taking a liking to social media advertising, mobile marketing, and the use of videos as an advertisement medium.
- Off-line marketing and events receive the least amount out of all marketing expenses.
Other factors that determine the allocation of the marketing budget include competition, the behavior of target customers, and the nature of the business.
Which Marketing Strategies are Worth Investing In?
As you allocate marketing funds, you must know which types give the best return on investment. To date, email marketing still has the highest ROI. The reason for that is because email marketing requires very little money. After email marketing, the other types worth investing in are paid ads and social media marketing. The likes of SEO can be pretty rewarding to a business. However, the effects don’t often occur right away. Business owners should give automation tools a try because they can speed up results.
What are the Best Social Media Marketing Channels?
Undeniably, social media marketing has proved its usefulness in marketing. Most marketing budgets allocate a considerable amount of money to social media. Facebook has retained its dominance as a social media marketing channel. YouTube and Instagram are gradually increasing in popularity. TikTok is gaining fame amongst the younger generation. Before investing in a social media platform, you need to evaluate its ability to offer a return.
Traditional vs. Digital Marketing Expenditure
Traditional marketing budgets keep on decreasing every year. The vice versa is what’s happening in digital marketing. As most consumers move to digital media, so do businesses and their marketing efforts. According to Emarketer, in 2016, digital marketing expenditure surpassed that of TV advertising for the first time. Ever since that has been the trend, it has gotten so serious that digital marketing expenditure is now twice that of TV advertising.
So, How Much Should You Budget for Digital Marketing?
If you run a B2B product business, you should spend 10% of your overall budget on marketing. For B2B service providers, you can spend 9%. For business-to-consumer companies, the cost goes higher. For instance, if you deal with products, you need to dedicate 20% of your budget to marketing. If its services, 18% should be enough. Please note that these figures are on the higher side. Do not spend more than you can afford. If you are finding it hard to budget for your business’s marketing, Marvel Marketing has a team of experts who can ensure you spend your finances wisely. No matter how small your marketing budget is, we can make it work to your advantage. Speak to our representatives via 1-800-427-7113 and get professional advice on marketing budgets.