It’s the classic marketing quandary – spend too much on promotion, and your ROI suffers; spend too little, and your business gets lost in the crowd.
So, how can you get that marketing budget just right in 2023? This depends on a few different factors, but the industry you operate in is a big one.
Marketing Budgets – the Industry Breakdown
Let’s get straight to it and take a look at how much you should be spending on marketing in 2023 as a percentage of your total company revenue. We’ll start with the biggest spenders, according to research conducted by Deloitte.
- The service consulting industry and technology sector are tied at the top of the pile, spending 21% of total revenue on marketing.
- Healthcare organizations are a close second, spending 18% of total revenue on their marketing budgets.
- Next is retail wholesale at 14%.
- Manufacturing is close behind with 13%.
- Communications media – 10%.
- Consumer packaged goods – 9%.
- Banking, finance, insurance and real estate – 8%
- The consumer services and transportation sectors are tied at 6%.
- The mining and construction, and education sectors are also tied at 3%.
- The energy sector is bottom of the pile, with a marketing budget spend at 1% of total company revenue.
These are rough figures, and there will be significant differences between companies’ marketing budgets within these sectors. However, they do give us a good idea of the major disparities between different industries. To understand this more, let’s take a look at the technology sector – the biggest spenders – compared with the energy industry.
Technology firms are going to be using more than one-fifth of their total revenue to fund their marketing budget this year. This is 21 times the revenue percentage used by energy providers. Why is this?
Technology firms exist in a highly competitive market and derive their profits from a product-based model. If customers don’t buy their new product, the firm loses out, which means promotion is critical as they make their voice heard in a crowded marketplace.
Energy firms, on the other hand, exist in a more stable market. Customers are more likely to remain loyal to an energy provider than to a tech firm and may not bother with switching providers. In addition, energy and power are necessities for individuals and families across the US – cutting-edge technology, not so much. Marketing is still important, but it is not the driving force for revenue that it is for other industries.
Optimizing Marketing Spend
So you work in the finance industry, and you’ve set aside 8% of your total revenue for your marketing budget. Job done? Well, not quite. This 8% is just a guideline – it’s what you do with that 8% of revenue that really counts.
As the domestic and global economies falter and stumble in 2023, optimizing spend is more important than ever. You need to make sure those marketing dollars are working for you. Here are a few things to bear in mind.
Put Technology to Work
There are plenty of marketing tools out there that can help you optimize your ad spend. Build an effective tech stack and use these tools as you optimize marketing spend across different channels and platforms.
Draw Upon Available Data
Your marketing always needs to be based upon data. If not, you are simply making moves at random with no evidence or basis to back them up. Gather data on your campaigns and also on your audience, honing your customer profiles so you know who you are marketing to.
Test, Analyze, Understand
It’s important to test and analyze all aspects of your campaigns. Conduct A/B tests to make incremental improvements on your campaigns, and keep on analyzing and assessing your marketing endeavours across key metrics.
Adopt a Comprehensive Strategy
Bringing in new customers is important, but you also need to be keeping hold of the clients you already have. Make sure your marketing supports existing customers as well as enticing new leads through the conversion funnel.
Gain Expert Assistance
To get the best out of your marketing budget, you may need to call in the experts. Earmarking some of your budget to pay for a marketing expert or consultancy service can be a profitable decision in the long term.
Get in Touch with the Experts at Impressive
We understand that budgeting is crucial to marketing success – but we also understand that it’s what you do with this budget that really matters. This is why we work closely with clients to help them optimize their marketing spend and achieve real returns on investment with their promotional campaigns.
Ready to get started? Reach out to our team today to discover more about our marketing services.