What’s a good marketing budget?

What's a good marketing budget?
Time to read: 3 minutes

Have you ever wondered what your competitors are spending on marketing – or what’s standard in your industry?

As part of running a digital agency, we often get to work 1-on-1 with our clients to create, implement and measure their marketing strategies. As a result, we’re rather up to speed when it comes to marketing budgets across industries.

We’ve put together this little article to hopefully help – without you having to dig too deep into your financials.

What’s a good marketing budget?

Firstly, your business and market are of course unique. This article is a guide, not a set of ‘hard and fast rules’. However, from all independent research and our experience, most companies are spending between 5% and 10% of their forecasted annual sales on marketing.

The majority of companies with a $2M annual turnover are budgeting around $100K – $200K per annum on marketing, depending on their overall goals.

The 5% range is to ‘maintain’ market presence, be it through website rankings, activities such as trade shows, etc. At the other end of the scale – businesses wanting to aggressively grow or refresh their brand are budgeting 10%, sometimes more.

Understandably, this might sound like a lot if you haven’t invested in marketing before, and we wouldn’t suggest diving straight into investing 10% of your revenue – it’s best to test the waters first.

And it’s no coincidence, that through digital marketing, you can test and invest your budget into the strategies that provide the best return on investment – then scrap the rest.

Hoping that people choose your Yellow Pages ad is long gone – marketing is a science.

The three tiers of marketing budgets

1. Maintaining market share: 5% of your expected revenue.

To keep your existing client base engaged, you’ll need to be budgeting around 5% of your expected revenue on marketing.

Remember, marketing isn’t always about acquisition. You need this budget purely to maintain your current share.

If you don’t allocate this budget, start-ups and hungrier competitors will take the space you had invested in – and your visibility can disappear altogether. In essence, a 5% marketing budget is a must.

2. Moderate market growth: 7% of your expected revenue.

According to a Forrester report, 61% of B2B marketers “expect to increase the proportion of technology spend versus marketing communication spend”. In other words, many businesses are investing in new tools for growth.

A 7% marketing budget allows you to maintain your position and invest 2% – 3% into areas and tools you may not have considered, such as email marketing, social media, loyalty marketing and building dedicated product or service pages for higher conversion rates.

Depending on your industry, a 7% budget will also allow you to monitor your competitors.

Why is this important? Well, if they start ramping up their marketing efforts, you can quickly adapt and defend against their push. If they go to the top of Google for a new product, you can challenge them.

3. Aggressive market growth: 10% of your expected revenue.

Imagine if your three biggest competitors started spending $200K per year on advertising. How would that influence your market share?

What if your competitors started running aggressive pay-per-click ad campaigns, dominating Google and channels like Facebook and Instagram? Your customers will be exposed to their products or service offerings, and be tempted to leave you – even just to ‘try them out’.

Scary isn’t it! However, these are the same strategies you can use right now. You can dominate your industry with a 10% marketing budget. It all comes down to your goals.

What marketing budget is right for you?

Growing a company isn’t easy. At Excite Media, we have a dedicated team who keep our website at the top of Google. That’s a great in itself, but even if you can easily find us, you still don’t know us.

That’s why you need marketing – to drive brand awareness and position your business as the most trusted in your market.


Marketing isn’t easy, and many companies waste good money on unfruitful channels.

So to understand what will work best for your business, it’s worth sitting down with a team like Excite Media who do it day in, day out. We’ve got clients generating 30-60 leads a day through their websites.

Marketing does work – you just need to define your goals and put a strategy in place before deciding on an appropriate budget.


Jess Childs

Copywriter & Web Designer
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