It can be tough for a business to work out how much they should be spending on marketing. Businesses at different levels of maturity have different needs when it comes to marketing strategies and its hard to know what you need to spend if you’re not a marketing expert.

This short and sweet infographic created by digital marketing firm Nuanced Media is an easy to follow, 2-step guide through the process of putting together a reasonable marketing budget. Let’s check it out.

Step 1: Calculating revenue. The first step is simple enough: before you know what to commit to your marketing budget, you have to know how much your company is making. Sit down with your CFO or accountant and calculate your company’s gross or estimated revenue. Once you’ve figured out this number, you’re ready for the next step.

Step 2: Determine your company size. Are you a brand new, up-and-coming company working on getting some exposure and recognition, or are you already an established household name? If you’ve been around for 5+ years and have already built up some brand equity and market share, you won’t need to put as much effort into marketing. If, on the other hand, you’re the new kid on the block, you’ll need a little more elbow grease (which translates into a larger budget.)

Once you’ve figured out your gross revenue and determined your company size, you’re ready to set out your budget:

  • Companies 1-5 years old should be looking to spend about 12-20% of their gross revenue on their marketing budget
  • More established companies should plan to put 6-12% of their gross revenue towards their marketing budget

Seems easy enough! Does your company follow this rule-of-thumb when sorting out its marketing budgets? Or have you found another way that works for you? Let me know in the comments.

How to Calculate Your Marketing Budget  infographic