How much should companies invest in marketing?

Welcome to The Upscaled Mindset’s first newsletter, where you will find all the answers you might be searching for in digital marketing.

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“No great mind has ever existed without a touch of madness” – Aristotle

The Reason Why You Need a Marketing Budget

A marketing budget helps decision-makers wisely choose the projects they must focus on. It ensures that the funds specified for software, hires, and freelancers add value to the company. This budget allows companies to compare their year-over-year growth and calculate the return on investment (ROI). Therefore, a well-planned marketing budget secures better funding for future projects. As we enter 2025, companies must reassess their marketing strategies and budgets to remain competitive, capture new audiences, and build lasting customer relationships. Even if you have the most successful product or service, how would the audience know about you without a well-planned marketing budget?

How Much Should a Company Invest in Marketing?

Marketing investments vary significantly by industry. According to the 2024 CMO Survey and Deloitte’s marketing spend benchmarks, the average marketing expense across all industries is between 8% and 14% of total company revenue.

Industry-Specific Marketing Investments in 2024

Based on the Asymmetric analysis, the marketing budgets of different industries are as follows:

• The banking, finance, and insurance industries assign around 9.5% of their revenue to marketing.
• The communications and media industry spends around 14.3% of its revenue on marketing.
• The retail and e-commerce sectors tend to have higher marketing spending, frequently exceeding 10% of their revenue.The food and beverage industries spend around 6% of their revenue on marketing.
• The construction industries choose around 10% of their revenue as a marketing budget.
• The healthcare industry spends around 6% of its revenue on marketing.

A well-known brand, Coca-Cola, spent 18% of its total revenue on marketing, double the average of the food and beverage industries. This explains its success in the market.

Digital Media Spending

Digital media spending has exceeded TV advertising for the first time, highlighting the switch towards online platforms. Therefore, startups must allocate about 11% of their revenue to marketing, aiming for a better market presence. According to Harvard Business Review, every dollar spent on marketing generates incremental revenue. Increasing marketing budgets in 2025 can yield exponential returns, particularly for growth-stage companies.

Benefits of Increased Marketing Spend

• Brand Equity: Consistent marketing investment builds strong brand equity, which translates to customer loyalty, price premiums, and market leadership. A 2024 Kantar study revealed that top-performing brands allocate 60% of their budgets to brand-building activities.

• Innovation and Agility: Marketing innovations, such as AI-driven content creation and programmatic advertising, require upfront investment but deliver efficiency and scalability in the long term.

Strategic Recommendations for 2025

•  Focus on Metrics That Matter: Measuring ROI is critical. Companies should track customer acquisition cost (CAC), lifetime value (LTV), and marketing-attributed revenue to ensure effective budget    allocation.
• Prioritize Content Marketing: As HubSpot discussed, with 84% of consumers trusting content over traditional advertising, brands should increase investments in blogs, video marketing, and social media storytelling.
• Diversify Marketing: Investments Companies in 2025 should explore a range of marketing channels and technologies to maximize impact.

Key areas of investment include:

• Influencer Marketing: Collaborate with influencers to reach niche audiences and boost brand authenticity.
• Video Marketing: Invest in high-quality video content for platforms like YouTube, TikTok, Snapchat and Instagram.
• Sustainability Messaging: Highlight eco-friendly initiatives to connect with environmentally conscious consumers.
• AR and VR Campaigns: Leverage immersive technologies to create engaging customer experiences.
• Community Building: Foster online and offline communities to increase customer loyalty.
•  Localized Marketing: Customize campaigns to resonate with regional audiences, particularly in diverse markets.
• Data Privacy and Trust: Allocate resources for transparent marketing practices and compliance with data regulations.
• Website Optimization and SEO: Invest in fast-loading, mobile-friendly websites and strong/effective SEO strategies to improve visibility and attract organic traffic.

These investments will enable businesses to remain competitive, build stronger customer relationships, and adapt to changing consumer preferences.

The Importance of Consistent Marketing Review

Jessica Horvath, Senior Advisor at Development Initiatives, BDC, wisely states, “Once you’ve defined your budget and put your plan into action, review it consistently to analyze whether your spending is achieving the goals you set.”

As upscale digital, we are ready to study your budget, plan your growth path, follow up every step, and bring your brand presence to life.

2025 is your chance for a fresh start; book your free consultation at support@upscale-digital.com to discuss how much your company should invest in marketing.