How much should you spend on marketing?

Free Marketing Calculator

Marketing is a vital element of a company's success. Without it, your company is essentially invisible to the consumer, who is inundated daily with a number of marketing messages from companies who are investing in social media, content, advertising, email, and other forms of marketing. Marketing ROI can vary, based on the quality of the campaign, the budget, and the industry, but studies continue to show that all types of marketing help to drive sales and boost revenue.

Marketing budgets can vary by industry. This graphic from the CMO survey held annually in conjunction with Deloitte, shows the average spend by industry. The spend ranges from 4% to as high as 24% for highly competitive consumer goods. Average spend also varies based on the age of the company.

New companies are often advised to spend 12-20% of their budget while established companies are often advised to keep spend near 6-12%. Of course, if a company is looking to significantly increase revenue, expand its reach, or is launching a new service, a more aggressive marketing budget is advised at the onset to help build brand awareness and drive growth.

Across the board, the average spend is 11% of gross revenue, with the typical range of budgets extending from 4% to 25%.

To help you determine how much you should spend on your marketing budget, we have developed this calculator that lets you see low, average, and high ranges based on your total gross revenue. Again, special initiatives such as a new website or launching a new service can shift your annual budget toward the higher end, at least for the fiscal year when the project or new service is developed. Your marketing budget will change from year to year based on your goals, technologies, and resources, so it is always good to revisit and adjust your budget as needed. You can bookmark this page and save it for developing quick calculations based on your estimated gross revenue and percentage of revenue you wish to allot to marketing.