What is ideal marketing budget for B2B industries?

Now, how much should a business set for its marketing budget? 

There are two standard options: 

• A fixed percentage of the annual revenue
• A set amount of money that can be added to or taken from 

The first option is prevalent. Companies usually set from around 7%-13% of their annual revenue on marketing. So, if a company made $1,000,000 in 2021, then their marketing budget for 2022 would be $70,000 – $130,000. From there, that budget would be spent on different marketing campaigns throughout the year. 

Some companies also see another approach with the first option. For example, the company is looking to grow to $2,000,000 in revenue in the next year. They would take 7%-13% of the target revenue and therefore spend $140,000 – $260,000.

Now, the second option is also quite common. Companies pick a number and see if it covers the cost of marketing for the year. If it doesn’t work, they cut some of the other expenses or add more to the marketing budget.

The reverse could work as well, where you add everything you hope to do and propose the final amount as your marketing budget. 

The second option allows for more creativity with the budget.