October is the ideal time to create your marketing budget plan for 2018. This year, here are some things you might want to take into account in your planning.
- B2B companies are spending more on marketing than ever
- Marketing budget as a percentage of revenue varies by industry
- Expect to include sales enablement in your 2018 marketing budget
Marketing Budgets are on the Rise
Here is some good news for marketers! Budgets are on the rise! We have seen from several sources that marketing budgets are on the rise for the third consecutive year. According to the Gartner 2016-2017 Spend Survey, budgets on average have climbed to 12% of company revenue. Historically, we’d seen 10% of revenue as the standard.
Part of the reason for the rise is an increase in digital marketing spend and investments in websites. Over the past two years, the emphasis on a better web user experience and mobile responsiveness has driven more investment in creating an enhanced digital presence. Whereas in B2B the website was historically seen as a static piece of collateral, the website is now a central news and engagement hub, integrated with social media, CRM and marketing automation platforms.
Overall, digital marketing is pacing at a healthy 11% compound annual growth rate between now and 2021. But this is not the experimental “spend on anything to see what works” investment that we saw between 2008-2012. – Forbes
More B2B companies are adding a social media engagement into their mix as well. In a CMO Survey sponsored by Deloitte Digital, their results showed that at least half of B2B Product and B2B Services companies are now investing in social media.
Marketing Budget as a Percentage of Spend Varies by Industry and Size
Size does matter. According to the Gartner CMO Survey, larger companies (more than $5B annual revenue) are spending a whopping 13% of revenue, whereas smaller companies ($250M – $500M) spend about 10%. Spend also varies by industry. We see higher spend in early stage, high growth tech companies as they invest for acceleration in market penetration and adoption.
A CMO Survey by the Fuqua School of Business at Duke, Deloitte, and the AMA, shows that B2C categories such as consumer packaged goods commanded the largest budgets at 24% of overall. Tech Software and BioTech averaged the next highest percentage at 15%. Service Consulting spends 12% and Energy spends the least on marketing, at 4%.
Make sure that your marketing dollars are driving revenue growth. Gone are the days of mystery marketing and vanity metrics. Today, marketing numbers have to tie to revenue. And modern tools and analytics make that easier than before.
Adopting revenue attribution enables marketing leaders to change the conversation, using language the C-suite understands. By tracking marketing contribution and revenue attribution in a way that proves marketing’s impact on topline growth, CMOs take a crucial step toward building confidence and trust. SBI
Include Sales Enablement in Your Marketing Budget Plan
With the growth of sales enablement, make sure that your 2018 budget encompasses sales enablement as well.
We have been talking about Sales Enablement throughout 2017. Depending on whether you have a formal Sales Enablement function, or it is spearheaded by sales or marketing, don’t forget to make sure that you create a section in your budget for Sales Enablement.
Find out where you are on the Sales Enablement Journey. Download our Sales Enablement Maturity Model Guide.
Ultimately, ensure that Sales Enablement isn’t given tasks but starved of budget. It makes sense to place Sales Enablement with the manager with the budget. – SBI
Last year, eMarketer reporting that a third of US B2B marketing and sales professionals said their enablement budgets increased at double-digit rates between 2015 and 2016 with technology taking up most of that number. We expect that trend to continue or even accelerate this year with the increased awareness and conversations around sales enablement. We anticipate that 2018 is the year that sales enablement takes a permanent place in the marketing budget plan.