Who doesn’t love crunching numbers and planning a budget? All right… maybe budgeting marketing spend isn't the most fun project, but it is one of the most critical in terms of your business’ ability to survive and thrive. It can be helpful to analyze B2B marketing spend by industry to see how your numbers align with your competitors. So, let’s get to it!
Overall Marketing budget outlook
According to a June 2020 special edition of The CMO Survey in which 2,654 marketing leaders at U.S. for-profit companies participated during what many consider to be the height of the coronavirus pandemic, marketing budgets rose to the highest percentage of firm budgets and revenues in the survey's history, at 12.6% and 11.4%, respectively. Top industry sectors were consumer services and communications, while bottom sectors were healthcare and manufacturing.
The fact that marketing budgets did not drop at the same rate as budgets and revenues likely reflects priorities given to marketing to retain customers and maintain brand awareness during the pandemic, showing important recognition of marketing being an invaluable business function.
2020 B2B Marketing Budgets
- For B2B firms, marketing reportedly accounted for an average of 11.3% of total company budgets.
- For B2B firms, marketing budgets as a percentage of company revenue fell within the 8% to 9% range.
As for the pandemic's impact on B2B marketing spend, it differs greatly across industry lines. According to the survey, the percentage of overall marketing budget lost or gained due to COVID-19 in March-April 2020 by industry was:
- Banking: -7.9%
- Communications/Media: 14.7%
- Education: 6.7%
- Energy: -10.0%
- Healthcare/Pharma: 3.0%
- Manufacturing: 4.1%
- Mining/Construction: -18.3%
- Services Consulting: 15.9%
- Technology (Software/Biotech): 8.0%
- Transportation: -1.7%
While looking at stats pertaining to 2020 B2B marketing spend by industry can be informative, should it inform your spend? Using these figures as a benchmark is problematic; using them as a starting point for your own budget process is much more useful. You can see how your competitors are spending - and the results you are seeing - to align your own numbers.
How Do B2Bs Spend Their Marketing BudgetS?
Just as important as the total spend is how B2Bs are using their marketing dollars. We’re seeing a focus on:
- Content Marketing. According to a recent B2B content marketing report by the Content Marketing Institute, 53% of respondents stated in July 2020 that their H1 2020 content marketing spend had remained the same and not been affected by the pandemic. Another 29% reported a decrease, while 18% reported an increase. A closer look at these figures based on company size revealed little difference. Respondents also were asked to estimate how their spending would look during Q3 2020 and Q4 2020, as well as how H2 would compare with H1. Nearly one-third thought their organizations would spend more on content marketing in H2 than H1. The majority, however, expected spending to stay flat for the rest of 2020. Only 12% expected a decrease.
- Digital Marketing. Customers are online now more than ever, so it makes sense that B2B marketing budgets would lean heavily towards digital. In fact, more companies than ever before are allocating their offline, conventional marketing budgets towards online, digital marketing. According to Forrester, by 2021, CMOs will spend nearly $119 billion on search marketing, display advertising, online video, and email marketing.
- Demand Generation. This aspect of marketing is focused on increasing awareness of and interest in your brand’s solutions. A majority of marketers say they’re going to increase funding for demand generation in 2021 and beyond.
- Analytics. Good! If you are not tracking the efficacy of your marketing initiatives, you don’t know if you’re spending wisely or foolishly. Are you casting money to the wind, or is each dollar helping drive mission-critical goals? You need to know. Key metrics (e.g., reach, awareness, click-through rates, conversion rates, etc.) matter, and more B2Bs are placing an emphasis on these insights to target their marketing campaigns more effectively.
It is useful have a sense of B2B marketing spend by industry - but ultimately, your business’ success depends on its individual goals and needs. You need to fund critical initiatives that will drive your business forward. If you need expert input into the best use of your marketing dollars, do not hesitate to contact THAT Agency. Give us a call today at 561.832.6262.
Editor's Note: This post was originally published in August 2019 and has been updated for freshness, accuracy, and comprehensiveness.