CMO Council Report Reveals the State of the Marketing Budget

Time and time again we are asked about budget allocation. Questions like: How much should I spend? How much should I allocate to branding? What are other companies spending? How does my budget compare with my competitors?

All are excellent questions. And although the answers are hard to come by, a recent report from the CMO Council gives us a bit more insight. But before you read on, be warned: 46% of marketers say they have been given “insufficient budget” Yikes!

Here is the budget breakdown based on the CMO Council’s report “2010 Marketing Outlook” where over 500 senior marketers were surveyed on how they are creating their marketing mix, spending their budgets, and what changes they are making to their media spend.

The overall marketing budget allocations look like this:

• 58% have budgets less than 4%
• 16% have budgets between 5 and 6%
• 23% have budgets from 7 – 20%
• 2% have budgets over 20%

Clearly, marketers have felt the squeeze from the recession. We know marketing budgets have suffered and tough decisions have been made on where the funds need to be spent to get the most of out very little.

So how are marketers spending these funds? CMO Council reports:

• 10.5% on strategy and branding
• 10% on product marketing
• 9.5% on website properties and digital platforms
• 9% on sales support
• 7% on creative services
• 6.5% on marketing planning, operations, and measurement

How does your marketing budget compare with these allocations? Are you surprised by these figures? Summer is here and it is an excellent time to assess how well your plan has performed in Q1 and Q2, and make adjustments for the rest of the year.

And with marketing planning for 2011 just around the corner, we recommend you read the CMO Council’s report. You can download the entire report or the free executive summary at cmocouncil.org.