Know-How Exchange : Research/Metrics

Not sure you're going to get a good answer Rick. It's going to change massively by organisation - country - industry - business model. ebay vs Coke?

If I had to pick a rough average based on experience, i'd suggest 5%-15%. However you need to be very careful in your definition of the marketing budget - are you including PPC in online spend? What about virals where it's actually a TV commercial posted online?

I agree with Dawson and other significant variables are business cycle stage and company size. Often, smaller businesses end up spending more, percentage wise, because out-of-pocket costs can be less expensive than traditional media.

In fact, there is so much variation in this percentage, that it would really be misleading to derive an average. Additionally, it's not so much what is being spent, but whether the expenditures are in line with a consistent marketing strategy.

A recent article (https://www.btobonline.com/apps/pbcs.dll/article?AID=/20091012/FREE/3101299...) gives some specifics, with the research data to be published in a few weeks (see: https://www.idgknowledgehub.com/blogs/?p=970).

Mercedes UK is allocating 50% of its budget (https://www.marketingweek.co.uk/mercedes-allocates-half-its-uk-marketing-bu...)

I agree with all that "it depends." My business is B2B software marketing so I look at it more by what I would budget for first.

In order of priority:

- Solid website. This is not a once and done. A good website means testing and retesting to continue to ensure that you are getting the conversions you want.
- A solid content strategy. Again this is not once and done. You need to continue to evolve your content to ensure that it is fresh and relevant.
- A solid lead nurturing program. This may or may not involve an investment in technology. If it does, the technology doesn't need to be incredibly expensive if you're operating on a shoestring budget.
- Education. This is not necessarily under the "digital" category, but another must-have is continuing education for the team to ensure that their thinking is fresh and they are continually improving their marketing initiatives.

The above 4 are "must haves." After that, I would look at all other campaigns as optional and judge their value based on whether they drive key metrics such as website conversions and qualified opportunities.

If you don't count people and systems in the mix, I spend a relatively small portion of the budget on digital marketing. The biggest expense might be if you want to outsource some of the effort instead of handling it internally. However, in terms of time and effort, I'd estimate digital can be 75% or more.

All the best!
Melissa

It varies massively even within a market sector or industry. In fact it varies from absolutely nothing to over 80% of the non-salary part of a marketing budget.

The amount or percentage spent on digital marketing will depend entirely on the specific marketing strategy of any given company. It should be calculated as part of writing the marketing plan and will be justified on the expected return on investment over the time scale anticipated by the author.

That an average figure does exist is not in question, its just that no-one to date has bothered to carry out the research to establish the figure as it is of earthly use to anyone! Even government and our dear old department of trade and industry have never carried out a comprehensive survey because it would be valueless.

I would have expected a university to have carried out such wok as academics study lots of meaningless things in the hope of inferring something novel from the results, but Professors of business studies are more headed than most researchers and as they can’t see any value in the results it has never, to my knowledge been done!


Best wishes


Steve Alker
Xspirt