7 minute read
Note to the reader. This is detailed because it’s important.
The Big Question for Manufacturing Marketing is…
“How much should we spend on digital marketing in 2022? (or any given year)
When meeting with company CEOs, along with their sales and marketing leaders, the question will inevitably come up during the conversation, “How much have you budgeted for marketing this year?”
They generally give us one of the following three answers:
1. “We aren’t sure what our budget should be. What do you think?”
2. “We don’t really have a well-defined marketing budget.”
3. “We’ve been fortunate, we’ve never really had to market our business until now.”
Most leadership teams have a difficult time answering the ‘marketing budget’ question. If you’re a CEO or VP of Sales & Marketing of a manufacturing business that struggles with this question, don’t worry; you’re not alone.
Perform a quick Google search right now for ‘average marketing budget for b2b companies’ and you’ll get answers ranging from 3 to 13% of annual sales! It’s a response that raises more questions than it resolves.
Here is our experience, as a leading customer acquisition firm serving B2B companies ranging from $10 million to $500 million in annual sales:
On average, our client’s marketing budget spend ranges between 3% and 10% of their annual sales.
Recent data, which supports our finding, is contained in a 2021 Gartner survey that pegs the average B2B company’s marketing budget is at 6.4% of total sales – right in the middle of our range.
Okay, so now you know what the average range is, but how do you start to divide the pie?
The typical manufacturer’s digital marketing budget (and plan) will include the following components:
- Content Marketing (Designed collateral, blog posts, and more)
- Search Engine Marketing
- Social Media Marketing (Both Paid & Organic)
- Trade Show Digital Advertising
- Email Marketing
- Search Engine Optimization
- Public Relations
- Website Management & Maintenance
- Marketing Automation Technology
- Paid Advertising Dollars
One-time, less frequent tactics:
- A Full Website Redesign
- Brand Re-Development, Logo Design
- Trade Show Booth Redesigns
Yes, there are certainly more tactics – but the 80/20 rule applies here. Plus, you don’t have all day, do you?
Hey Grey Matter, How Should We Properly Allocate Our Budget?
How you allocate your budget could vary from year to year as depending on your response to varying business objectives and market conditions. In addition, some businesses will separate the spending on special or one-time projects from their core budget.
Picture this example: A B2B company that generates $15,000,000 in revenue, with an annual marketing budget of just 3% of revenue would have $450,000 to invest in their digital marketing initiatives. Ideally, they should have an allocation that looks something like this:
Your Customer Acquisition Agency – Investment: $69,000 ($5,750/month) and they should manage and execute the following:
- Co-Development of Your Marketing Strategy
- Or helping to ‘pressure test’ your existing marketing strategy
- Competitor Analysis
- It helps to benchmark yourself against your competition. This doesn’t mean you should follow their strategy if you’re behind, but it’s important to understand everything they are doing digitally
- Technical Set-Up & Implementation
- They should have a process and framework (including technology) to ensure everything is reporting properly and ‘talking to teach other’ the right way
- Buyer Persona Development Workshop
- Working with you to truly understand your buyers, how you segment, what makes them ‘tick’, and more
- Unlimited Google Ads Management
- Strategy, Analysis, Design, Execution, and Optimization of Google Ads Campaigns
- Unlimited LinkedIn Ads Campaign Management
- Strategy, Analysis, Design, Execution, and Optimization of LinkedIn Ads Campaigns
- Unlimited Retargeting Marketing Ads
- Strategy, Analysis, Design, Execution, and Optimization of Retargeting Marketing Ads
- Unlimited Facebook Ads Management
- Strategy, Analysis, Design, Execution, and Optimization of Facebook Marketing Ads
- Outbound Sales Development Rep Services
- Done-for-you outbound sales prospecting for one of your salespeople (to start)
- Sales Enablement Training & Courses
- Exclusive access to LinkedIn’s Top 10 Sales Trainer’s core courses (typically a $1299 per salesperson value)
- One Blog Post Per Month
- Optimized for search using AI tools and at least 750 words in length per best practices
- One Email Marketing Campaign Per Month
- Whether that be a simple ‘Insider Newsletter’ or a more targeted, segmented campaign, you should be sending at least one out per month
- Search Engine Optimization
- On-page, technical SEO analysis to improve your organic rankings
- Quarterly Content Collateral Development
- This is developing a piece of content such as a white paper, eBook, buyer’s guide, checklist, and more
- Weekly Social Media Management
- Creating a content calendar and publishing across your three core channels (LinkedIn, Facebook, and Twitter) twice per week
- Access to a 24/7 KPI Report Dashboard
- You and leadership will have access to real-time dashboards for all digital marketing initiatives
- Monthly Reporting and Insights
- How do you know what’s working and what’s not? This is where marketing & sales sits down to report on overall performance
Your Paid Advertising Spend: $200,000 ($16,667/month)
You’re going to allocate dollars strategically and efficiently across your paid advertising campaigns, this is also one of the categories where if you can build a predictable flywheel and find out what channels are most effective, it’s incredibly scalable.
Your Marketing Automation Platform: $20,400 ($1,700/month)
- What we’d go with if we could: HubSpot’s Marketing Pro Platform that includes:
- Includes 20,000 marketable contacts
- Email marketing
- Landing pages
- Live chat
- Omni-channel marketing automation
- ABM tools and automation
- Dynamic personalization
- Multi-language content
- Social media scheduling and management tool
- Video hosting & management
- Contact and company scoring
- A/B testing
- Ads optimization events
- Contact create attribution
- Campaign management
- Website traffic analytics
- Campaign reporting
- Custom reporting
- Salesforce integration
- SEO Recommendations & Optimizations
- Content Strategy
- Google Search Console Integration
- …and much, much more.
Left-Over, “Run Harder” Dollars: $160,600
The good news is that you still have some leftover dollars to allocate for one time projects or to even scale up certain initiatives such as:
- Making some major updates to your website ($15,000 – $30,000)
- Adopting a direct mail sales outreach campaign via Sendoso ($10,000 – $25,000)
- Creating high-quality videos to explain your processes, culture, and more ($12,000)
- Runing harder at any of the above executables such as
- More blog posts, more collateral, and content marketing initatives
- Or execute some account-based marketing campaigns
- Build out a larger email database
- Offline dollars (print magazines, etc)
Your Total Budget: $450,000
Hey Grey Matter, How Do We Determine or Track Our Marketing ROI?
Most people will say that ROI is often difficult to calculate. To us, ROI can be calculated if a few things are simply connected:
- Your Website Forms
- Your Marketing Platform
- Your CRM
With this information, you should be able to accurately report the true revenue generated, by marketing sources, across all points of a buyer’s journey.
Beyond core ROI, you should track your marketing qualified leads, total pipeline dollars generated, lead-to-close rate, and more during the calendar year.
Use our awesome ROI calculator by clicking the button below.
Here’s An Example:
Annual Marketing Budget: $450,000
Annual Marketing Qualified Leads Generated: 415
Average Sale Value: $60,000
Average Close Rate: 20%
Number of Closed Transactions: 83
Total Anticipated Revenue: $4,980,000
Return on Full Marketing Investment: 1006%
Use Our Readiness Checklist Here to see if you are ready to get started.
If you’re ready to realize more out of your marketing budget, get in touch with a Grey Matter team member today.