The marketing industry has drastically shifted since the COVID-19 pandemic. The globe saw a huge increase in internet shopping and a change in consumer spending. In 2021, the marketing industry was estimated at $155.3 Billion.
There is an increasing demand for businesses now that the world is regaining its old spending habits, but as consumer behavior shifts, businesses are navigating an unprecedented time.
So how much should a business spend on marketing? There are no set rules or prices, but if you’re looking for some guidance, read on for a breakdown.
Types of Marketing
A large shift in consumer patterns became apparent after the pandemic. With this in mind, businesses are having to re-evaluate the importance of marketing.
A common occurrence seen over the last 2 years, is that businesses on average have spent more revenue on their marketing strategies.
In the modern age, businesses turn to digital marketing agencies for help with their marketing techniques. Getting a clear view of your business’s goals will ultimately help you with the amount you spend on marketing.
It is important to make sure you’re not spending too much money on things that will not benefit your business. Speak to a professional to gain perspective on what marketing is important for you.
Remember that each marketing strategy can widely range in price. A common way to spend on marketing is using a percentage of company revenue. This can also range depending on your desired business growth and the success of your current marketing strategy.
How Much Should a Business Spend on Marketing?
Marketing budgets have increased to 9.5% of company revenue. However, this is still lower than pre-pandemic levels.
With the fall of printed advertising since 2020, these marketing budgets may not ever reach pre-pandemic levels, as so many businesses thrive with online marketing alone.
Making sure you’re spending money in the right places is imperative for a business in 2022. With so many marketing options, it’s best to research or even look at marketing case studies to better grasp what your business may need or how easily a marketing strategy can affect its growth.
If you are a small start-up company, you would only be expected to spend the lower end of the spectrum on marketing. If this marketing is successful and your business grows, it would be wise to re-evaluate your spending levels.
Assuming your marketing is successful, you should see an increase in sales and therefore an increase in the size of your business. Keeping up with this is important to stay on a growth pattern and not end up with minimal marketing and a sudden halt in sales.
On average, businesses expect to spend 7-8% of their gross revenue on marketing. This will include a range of strategies.
Picking a Focus for Your Business
Marketing isn’t a one-size-fits-all package. Some businesses may spend thousands on print advertising and your business may not need it.
It’s important to have clear set goals for your business and who your audience is. A poor marketing technique could lead to your business spending money on things you shouldn’t need.
Picking a focus for your business will certainly make sure you have a clearer spending plan for efficient techniques to grow or stabilize your business.
Choosing the right marketing strategy is highly important. This will determine your spending on marketing for your business. Here are some sectors of marketing businesses tend to spend money on:
- Content Marketing
- Email Campaigns
- Social Media Advertising
- Print Advertising
- Google Advertising
While there are more marketing focuses, these tend to be used by a wide range of business sizes and structures. You can find out more information on what makes a good marketing team to create marketing success here.
The pricing for each differs but you may benefit from hiring a specialist marketing agency to handle all levels of advertising and marketing in your businesses, which may work out more cost-effective and help your sales more than separate marketing campaigns.
Many businesses over the last 2 years have realized the importance of marketing. Even though businesses have always marketed themselves and advertised their product or service, the shift in companies paying more for advertising recently has been clear.
With the competition so fierce, it’s not a coincidence your consumers will find you online. You have to make it so with a plan.
As the online world grows, so does the likelihood of duplicated businesses. While this is common, a more effective marketing strategy can show your success in comparison to others.
A marketing agency can help you spend accordingly. This will help your marketing strategy grow with your business so you are never spending too much or too little on campaigns.
Planning your business growth with a marketing agency can also make you aware of how each tool will work together to help your business. This will also come at specific costs for a marketing package. It can be easier to choose a budget if you know up-front how much a marketing package will cost.
Consult an Expert
Finding the right help for your business is crucial. We no longer live in world of billboards and print media. While there is still some success in printed advertising, the rise of digital marketing is already huge and still growing quickly.
As the industry is constantly shifting, it would be worth seeking professional marketing help. If you’re looking for more information on how much should a business spend on marketing, get in touch for marketing advice.