Common Ratios in B2B Marketing Budgets

The allocation of marketing budgets in B2B companies can vary significantly depending on several factors such as industry, company size, growth objectives, and sales cycle length. However, there are some common benchmarks and ratios that are widely referenced in the industry.

Common Ratios in B2B Marketing Budgets

1. Percentage of Revenue:
   • A common benchmark for B2B marketing budgets is to allocate between 2% and 5% of total revenue to marketing efforts. This is generally lower than B2C companies, which often allocate between 5% and 10% of revenue to marketing[2][3].
   • Some studies suggest higher allocations, with averages of around 9% to 10% of revenue for B2B companies, particularly in sectors like technology and SaaS (Software as a Service)[1][3].
2. Budget Allocation by Activity:
   • Content Creation: Typically, B2B companies allocate about 20-30% of their marketing budget to content creation. This includes efforts like blog posts, e-books, case studies, and videos aimed at building brand authority and improving SEO[2].
   • Paid Advertising: Around 10-20% of the marketing budget is often dedicated to paid advertising, which includes pay-per-click (PPC) campaigns and social media ads[2].
   • Website Development: Investments in website development can account for about 15-20% of the marketing budget, focusing on user experience (UX) and conversion rate optimisation (CRO)[2].
   • Traditional Advertising: Although less common in B2B compared to digital channels, traditional advertising might still receive about 5-10% of the budget[2].
3. Spending by Company Size:
   • Smaller companies or startups might spend a higher percentage of their revenue on marketing to establish brand presence and compete with larger firms.
   • Larger companies tend to spend a smaller percentage relative to their revenue but have larger absolute budgets due to their scale[5].

These benchmarks serve as a guide for B2B companies when planning their marketing strategies. It’s important for companies to tailor their budgets based on specific business needs, market conditions, and strategic goals rather than relying solely on industry averages.

References ansd Further Reading

[1] www.swordandthescript.com/2023/10/b2b-marketing-budget-as-a-percentage-of-revenue/
[2] wearemindscape.com/resources/how-much-should-your-marketing-budget-be-for-a-b2b-company-or-a-b2c-company/
[3] https://healthlaunchpad.com/b2b-marketing-budget-benchmarks/
[4] skale.so/b2b-seo/marketing-budget/
[5] www.demandbase.com/blog/setting-and-defending-marketing-budget-and-roi/

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Kevin Harrington Partner

Kevin Harrington is a Partner at Exit Factor UK, helping SME owners increase business value & build a rewarding, well-planned exit. Former CMO at BBC Worldwide.

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