Marketing Costs....

How much money should I spend on marketing?

Jan 2, 2019 8:30:42 AM / by Noelle Abarelli

If I had a dollar for each time I’ve been asked that question over the past 20 years, I’d be a very rich woman! It’s a question both new and seasoned marketers face every year when they put together their marketing budgets. My answer varies depending on who’s asking and what they’re selling, but since most of my clients operate in the B2B technology space, I’ll focus my response on that audience.

I remember a time early in my career when I was working for an American software company expanding into Europe. We didn’t have a lot of money to spend, so we had to invest very wisely. The geographical size of each market made face-to-face networking easy, so we hit a lot of tradeshows. The media in our primary target industry (retail) was a strong influencer, so we hired a small PR firm to help us build a reputation. We piggybacked on partnerships established in the U.S., asking any and all partners with a global presence for introductions to their European counterparts.  


After almost a year of ‘guerilla marketing’, we opened offices in a few key markets. Days after one office opened, one of our European sales reps called me. He was very excited and said something along the lines of, “Our new office is working – the phones are ringing!” He believed that establishing a brick and mortar presence was what was generating demand. I knew better. It was the months of marketing prior to the office opening that was making those phones ring. Because, without marketing, who would have known we were even in the market?  

dollars to spend


No marketing = no sales.

There was no sense trying to convince my rep of this fact, but hopefully you're listening and understand that to make money, you have to spend money. The question is – how much?

According to this year’s Gartner CMO Spend Survey, marketing budgets in 2018-19 are 11.2% of company revenue, which is a figure nearly unchanged from last year. The survey polled over 600 marketing leaders across industries in North America and the U.K. to help companies benchmark their spend and prioritize activities by better understanding marketing priorities and budget allocations. 


Top marketing investments

The survey reveals that marketing technology is the single largest area of investment when it comes to marketing resources and programs. It accounted for a whopping 29% of the total marketing expense budget. Email marketing platforms, web content management and digital marketing analytics platforms top the CMO’s martech shopping list.

After marketing technology, marketing leaders are investing in digital workhorses like paid search, organic search, website and email. CMOs reported that, on average, these items account for 25% of their marketing investments. Marketers continue to invest in these tactics because during a time when it’s critical to calculate marketing ROI, these tactics are measurable.


Budget recommendation

For now, I’m recommending that my clients invest 10% of company revenue in marketing. Whether you agree or disagree, I’d love to hear from you.  And, do check back here in the coming year for some creative ways to spend whatever budget you have!


Topics: Insider, Business costs, Marketing

Noelle Abarelli

Written by Noelle Abarelli