How much should we allocate for marketing?
This is one of the most frequently asked questions I’ve received from company managers since I began my consulting practice in 2005.
Based on my experience with international FMCG corporations that have successfully built brands across diverse markets for decades, I can say that a marketing budget typically ranges from 5% to 10% of a company’s annual net revenue.
I’d like to emphasize that this figure refers specifically to the marketing budget.
What does that mean?
The marketing budget is separate from the sales budget and covers all activities aimed at consumers or end users, such as:
- Advertising campaigns (media)
- Production of advertising and marketing materials
- Sponsorship contracts and events
- Market and consumer research
- New product and packaging development
- Consumer promotions
- Fees for marketing and advertising agencies
Interestingly, the largest share of the marketing budget—often over 50%—is typically allocated to advertising campaigns, which play a key role in building brand and product awareness.
