The Percentage of Revenue To Spend On Digital Marketing

Santiago Sanches

- CTO

mar·ket·ing

/ˈmärkədiNG/noun1. Something we can’t live without.

How much are you spending on Marketing?

Marketing now more than ever has become the change agent for business.

Developing your brand and your identity is important because no one is going to pay you if they don’t know you.

It is bothersome to know that there are some people right now living in 2019 that don’t believe that Marketing isn’t important.

You hear the typical 5-10% rule of marketing. Spend 5% to 10% of your gross revenue on Marketing and you’ll have a good business blah blah blah.

But let’s think about the great businesses who spend almost half of their revenue on Marketing and we can’t seem to get their names out of our heads.

Think about Coca Cola who spends nearly 3 billion a year on Marketing and I would bet you my last dollar that you know what Coca Cola is and what they do, you might even drunk one today.

To clarify, having terrific Marketing isn’t a pass to have a horrible business. The quality of a business is still very important.

The businesses that spend the most on Marketing win… PERIOD. The more you spend on Marketing the more exposure you will have to the consumers know you and are able to familiarize themselves with your brand.

Would you rather have an option of 10,000 people or 100,000 people knowing about your company?

If you want massive growth, I’m pretty sure that you chose 100,000. The amount you spend on Marketing is directly correlated with how many people know who you are and what you do.In 2018 Apple spent 118 million on just television in their second quarter and generated 3.3 billion impressions.That brings me to the question of what percentage of gross revenue should be spent on Marketing?It depends on what phase you are in your business. If you are still in the growth phase you shouldn’t focus on the 10% rule you should be focusing on scaling your business. Studies show that businesses that spend up to 40% grow year after year. It makes sense because marketing is an investment. This is a typical marketing budget for a startup. For example, Mindbody invests 39% of their revenue into their Marketing and they experience a 31% percent growth in sales year after year.

But what is the marketing budget being spent on?

70% of businesses have said that content marketing has been the reason for their audience’s growth and engagement. 26% is the average amount of a marketing budget that is being spent on Content marketing. This average is expected to increase in the months to come.

Why Content?

Content Marketing presents audiences with useful information that provides value and insights to the problems that customers are seeking help for. Blogs, for example, informs customers on various topics that they are interested in while creating a relationship between the consumer and the business.This type of marketing is a great way to build trust with the customer because it shows that your business is knowledgeable about the problem that they are dying to solve.

Thinking Big

Bigger, more established companies can afford to use a smaller percentage of their revenue to put towards Marketing. Their smaller percentages realistically are very large sums of money. Also, because they are big companies it doesn’t mean that they have room to slack off. They too must stay ahead of the game if they want to continue to grow. Disney spent 2.8 billion dollars on Marketing in 2018 and they are one of the United States biggest companies. It’s all about thinking big. Marketing has been proving itself for years. 40% of increases in business have been contributed to Marketing. Putting more money into Marketing pays off in the long run.It’s up to you, do you want a good business or a great business?Think big or go home!

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