Accounting firms across the country want to know what other firms spend on marketing activities as a percent of firm revenue. This common marketing management question was once difficult to answer because there wasn’t reliable industry peer data. Thanks to the Association for Accounting Marketing, this data is now available. The 2015 Marketing Budget Benchmark Study is an apples-to-apples comparison of spending within firms by firm size, market size and growth rate.
Inside Marketing Budgets
The average firm spends 2.2 percent of firm revenue on marketing, including staff compensation. Firms without marketing staff only spend 1.9 percent of revenue.
And when it comes to staff, firms have one marketer (FTE) per every 65 employees. Personnel costs account for more than one-fourth of dollars spent. Additionally, all but the smallest firms are investing in the use of outside consultants to supplement their marketing.
How High Growth Firms Spend
There is a big difference between how high-growth and low-growth firms spend marketing dollars. To define the difference between these types of firms, high growth firms saw an average organic growth rate of 24% while the lowest growth firms experienced negative growth.
High growth firms spent more money on marketing staff – one FTE marketer to every 48 employees. Most astonishing, they spent less on marketing overall. High growth firms spend a little over one percent of revenue on marketing and the low growth firms spent double that.
When it comes to how they spend money, high growth firms invest more in:
- Marketing material
- Content creation
- Networking/trade shows
- Website and search engine optimization
- Educational events
They are spending less on the dated, traditional marketing activities like advertising, sponsorships, PR, non-CPE events and individual partner budgets.
How Do You Stack Up
One of the great benefits of having this data is your ability to benchmark your spending to similar firms. The full version of the report, which you can buy, provides specific spending in areas like pay per click advertising, outsourced content creation, charitable giving and sponsorships, to name a few. The best part is that this level of detail is provided for all firms, high growth firms and by firm size.
It will take some time for you to break out your spending to match the categories in the survey, but the insights gained will be worth the investment – if you are committed to change the way your currently spend that is.
Marketing should produce a return on investment. Too many firms don’t track ROI or they continue to do marketing activities they have always done because they’ve always done them. In doing so, they aren’t reaping the reward for their marketing investment. High growth firms have seen the difference and have adjusted their spending accordingly. This spending shift doesn’t have to happen overnight, but you do need to make sure the marketing you invest in is helping you achieve your strategic goals.
If you don’t measure and analyze your marketing efforts, are you making the best spending decisions? Probably not. How much you spend is important, but not as important as how you spend it.