Setting an annual marketing budget can be a challenge and there are many factors to take into consideration. A quick way to generate a rough figure is to base it on the annual revenue of the company. An average percentage for B2B ranges from 6% to 12% of gross revenue as recommended by eMarketer’s Marketing Spending, assuming the sales margins are in the range of 10% to 12%. If we use these rates, below are quick examples of recommended marketing budgets:
Gross Revenue $2,500,000 x 0.12 = $300,000/year or $25,000/month
Gross Revenue $5,000,000 x 0.10 = $500,000/year or $41,650/month
Gross Revenue $10,000,000 x 0.08 = $800,000/year or $66,665/month
Gross Revenue $25,000,000 x 0.06 = $1,500,000/year or $125,000/month
These are considered conservative numbers, as companies who are in aggressive growth stages will often spend up to 20% of their revenue on marketing as well as B2C, which is typically higher than B2B. Companies that are just starting out will need to set a higher percentage than those that are more established. Measuring the success of any marketing campaign is critical. Budgets should be spent wisely and spread out to cover various types of advertising.