Available statistics only indicate that in the United States, B2B companies spend 8.33% to 11.96% of their revenue on marketing, and 13.2% of a company’s marketing budget is spent on market research and competitive insights. Compared to smaller companies, larger companies spend a smaller percentage of their revenue on marketing. Marketing budgets or expenses, in general, have shrunk because of the COVID-19 pandemic.
Marketing Spend of Large B2B Companies
- Based on Deloitte’s June 2020 CMO Survey, the marketing spend of B2B service providers and B2B product providers in the United States are 11.96% and 8.33% of their revenues, respectively.
- While these figures are not specific to enterprise-sized B2B companies, the survey reveals that compared to smaller companies, larger companies spend a smaller percentage of their revenue on marketing. It reveals that companies with more than 10,000 employees have a marketing spend of 4.78% of revenue, while companies with less than 100 employees have a marketing spend of 14.90% of revenue.
- An examination of the latest disclosures of eight public B2B companies in the United States that have around 25,000 to 30,000 employees, namely Xerox, Booz Allen Hamilton, ManPowerGroup, U.S. Steel, Maximus, Amkor, Texas Instruments, and Avery Dennison, reveals that the marketing expense is typically not disclosed in the annual report or Form 10-K. What is typically disclosed is the broader selling, general, and administrative (SG&A) expense.
- It is worth noting that based on SurveyMonkey’s recent survey of more than 2,000 market research professionals in the United States, 70% of market research professionals in the country are “likely to transition to more DIY tools in the next year” in light of the COVID-19 crisis.
- Market research authority GreenBook also reports that globally, the percentage of market research buyers whose annual research project budget is at least USD 20 million has dropped from around 30% before March 11, 2020 to around 16% after March 11, 2020. It can be recalled that the stock market crashed on March 12, 2020 because of the COVID-19 pandemic.
- GreenBook also reports that globally, 31% to 35% of market research buyers have an annual market research project budget of less than USD 1 million, and 17% to 25% of market research buyers have an annual research project budget of USD 1 million to USD 3 million. These figures suggest that most companies have an annual market research project budget of at most USD 3 million.
Amount Allocated to Market Research
- The percentage of its marketing budget that an enterprise-sized B2B company allocates to market research is not readily available in the public domain, but Gartner’s latest CMO Spend Survey shows how the marketing budget of a company is typically allocated to marketing programs or operational areas. This survey was a poll of chief marketing executives (CMOs) in North America and the United Kingdom.
- According to this report, the marketing budget is allocated to marketing programs or operational areas in the following manner: marketing analytics (16.0%), content or campaign creation and management (13.4%), market research and competitive insights (13.2%), marketing operations (12.6%), user research (12.3%), brand strategy or brand building (11.9%), sales support or enablement (11.6%), and loyalty program management (8.8%).
- This breakdown indicates that 13.2% of a company’s marketing budget is spent on market research and competitive insights.
- On a different note, members of the Measurement Commission of the Florida-based Institute for Public Relations share that the percentage of the communications/marketing budget that is allocated to research and insights varies widely and ranges from 1.5% to 15%.
Breakdown of Market Research Spend
- Though a breakdown of the market research spend of enterprise-sized B2B companies could not be located in the public domain, ESOMAR, an organization of market researchers, has published a report on the market research spend of the United States and its breakdown.
- Based on this report, market research spend in the United States is broken down by research method into quantitative research (79%), qualitative research (14%), secondary analysis (3%), and others (4%).
- By project type, it is broken down into market measurement (18%), media audience/research (16%), usage and attitude studies (15%), user experience research (10%), customer relationship management systems or customer satisfaction research (8%), omnibus/shared cost surveys (8%), opinion research or polling (8%), new product or service development (5%), advertising or brand tracking (4%), market modeling (3%), advertising pre-testing (3%), employee satisfaction research (1%), mystery shopping (1%), and non-profit research (1%).
To find the desired benchmarks, we consulted surveys of and articles/reports about CMOs, market research professionals, and market research buyers, including those published by Deloitte, Gartner, SurveyMonkey, GreenBook, and ESOMAR. We also examined the disclosures of public B2B companies that have around 25,000 to 30,000 employees, namely Xerox, Booz Allen Hamilton, ManPowerGroup, U.S. Steel, Maximus, Amkor, Texas Instruments, and Avery Dennison, We were unable to find benchmarks specific to B2B companies with employee counts of 25,000 to 30,000 and research teams of 20 to 30 people, so we provided the closest information we could find.