around 5 percent
OVERALL IT SPEND AVERAGES AND YEAR-OVER-YEAR CHANGES Overall as of 2013, businesses seem to spend between 4-6% of their revenue on IT, and this range is recommended by CIO Magazine. Company size generally has a large effect on budget size, and should be taken into consideration when planning your fund allocation.
A 2019 BDC survey of more than 1,400 Canadian businesses found that Canadian small business marketing costs average just over $30,000 a year, while those with 20 to 49 employees spend twice that amount. Companies with 50 or more employees tend to have marketing budgets in excess of $100,000.
“The largest companies … those with more than $10 billion in annual revenue — have the largest appetite for digital advertising , averaging 11.6% of the marketing budget ,” while those “with annual revenues of $500 million to $1 billion allocated 8.5% of their marketing budget to digital advertising .”
The U.S. Small Business Administration recommends spending 7 to 8 percent of your gross revenue for marketing and advertising if you’re doing less than $5 million a year in sales and your net profit margin – after all expenses – is in the 10 percent to 12 percent range.
With more than 17 billion U.S. dollars in advertising expenditures in 2018, the U.S. retail industry was a clear winner, followed by automotive with a 14 billion ad spend.
The average IT spend across all industries was 8.2 percent of revenue . Unsurprisingly, software and hosting companies had the highest spend as compared to revenues . Financial services organizations also showed higher than average spend at 10 percent of revenue .
Payroll costs – specifically human labor – are usually the largest expenses for a business. People can easily account for 70% of your company’s spending .
Ryan Flannagan of Nuance Media writes startups should expect to spend 12-20% of gross revenue on marketing , while noting a larger firm may only spend 6-12% of gross revenue on their marketing budget .
A good marketing ROI is 5:1. A ratio over 5:1 is considered strong for most businesses, and a 10:1 ratio is exceptional. Achieving a ratio higher than 10:1 ratio is possible, but it shouldn’t be the expectation. Your target ratio is largely dependent on your cost structure and will vary depending on your industry.
A marketing budget documents how much your business plans to spend on marketing over a specific period, like a year, quarter, or month. When budgeting for marketing , consider all costs associated with marketing your business, such as paid ads, hiring costs, marketing tools, website maintenance expenses, and more.
The cost of digital marketing in 2020
|Search engine optimization (SEO)||$500 – $20,000 + per month|
|Pay-per-click advertising (PPC)||5-20% of monthly ad spend|
|Email marketing||$300 – $5,000/month or $0.1 – $0.5/email|
|Social Media marketing||$250 – $10,000/month|
|Website Design||$2,500 – $100k|
The average social media budget for businesses sits between $200 and $350 a day. This figure comes from a study by the Content Factory . In terms of a percentage of total marketing budgets, social media spend sits around 11.7% – which is a 3x increase since 2009.
The U.S. Small Business Administration recommends, “As a general rule, small businesses with revenues less than $5 million should allocate 7-8 percent of their revenues to marketing.” This percentage is based on companies that have margins in the 10-12 percent range (after expenses).
In the United States , luxury ad spend is forecast to increase from 4.87 billion U.S. dollars in 2015 to nearly 5.5 billion in 2019.