Skip to main content

How Much Should You Budget for Inbound Marketing? Beware!!

By October 26, 2015May 13th, 2019

Inbound marketing is now an essential part of any B2B company’s marketing strategy. But many still wonder, “How much does it cost?” This is a valid question since there are so many moving parts to inbound marketing and it ends up being a change process as much as it’s a marketing process.

But beware! We’ve found many blog posts on this topic talk only about total marketing budget and assume that you’ll spend all of it on inbound. That’s simply never true!

Let’s start with total marketing budget

Caron Beesley writes on SBA.gov that if your business is generating less than $5 million in revenue and wants to grow, then spending 7-8% of revenue is a good target for your entire marketing budget. For larger businesses, a smaller percentage of total revenue makes sense:

Revenue Marketing Budget
Less than $5 million 7-8%
$5 – 10 million 6-7%
$10 – 100 million 5-6%
$100 – 300 million 3-5%
More than $300 million 3-4%

Some fraction of this amount should go to inbound marketing. In fact, a recent Gartner survey showed that, on average, US companies spend 2.5 percent of their revenue on digital marketing activities. And these efforts are only 25 percent of the full marketing spend. So if your company generates $5 million in revenue, you would likely spend $125,000 on digital marketing alone.

How you allocate these funds varies depending on whether your company is just getting started with inbound marketing, or is interested in getting more leads, or getting more sales.

You’re just getting started with inbound marketing

Investing in marketing software, website refresh, and content.

If you’re just getting started with inbound marketing there are certain investments you’ll need to make for a successful launch. First, you’ll need marketing automation software. As HubSpot partners, we certainly recommend HubSpot’s all-in-one marketing platform because it covers all the tools you need to get started properly, and the one’s you’ll need in the future.

Once the software is acquired and setup, it’s likely that you’ll want to refresh your website to take full advantage of your marketing automation platform, and to add the content for blogs and downloadable ebooks and infographics that will generate leads. This new content and your website refresh will be written with the same targeted buyers in mind, providing a consistent message throughout your website.

You  have the basics, now you want more leads

Invest in advertising, email marketing, public relations, link building, and social media engagement.

inbound marketing leadsYour website is already set up for lead capture and you have good traffic to your site, but you want to increase the quality of your leads. You can employ a variety of advertising channels from social to PPC to remarketing, to print ads. Promoting your educational content through a paid third-party email blast from relevant trade magazines will help you generate new leads, and an email marketing campaign to your own database will further engage your prospects and sort out the “wheat” from the “chaff.”

Public relations outreach to relevant media outlets and bloggers can also help build traffic and inbound links that will boost your search presence and organic traffic.

You need to deliver more sales-ready leads

Invest in lead nurturing, marketing automation and your CRM.

sales-ready leadsNow you have a scalable infrastructure for lead capture and generation, so you can implement more sophisticated lead nurturing programs to move leads through your sales funnel. Lead nurturing can be done through email and on your website, with personalized content being present at each level of the sales funnel. These twin streams of content are designed to continuously engage the prospect until a sale is made.

This is also the time to launch further marketing automation solutions, like integrating with your CRM, adding lead scoring, and automated sales notifications.

How much should you budget for inbound marketing?

Most surveys indicate digital marketing budgets are on the rise across the entire spectrum of company sizes and industries. Here are suggested budgets for inbound marketing by company size.

  • Small Businesses @ $2-10 million in sales should plan to budget $100-150K per year, more if possible. This amounts to 2-5 percent of gross revenues, which is well within the ranges of companies building their growth around digital marketing.
  • Small-to-Mid-Size Companies @ $10-50 million in sales should budget $200-300K per year, which provides plenty of funds to build a solid, scalable inbound marketing engine.
  • Mid-Size Companies @  $50-100 million in sales should budget $300-500K per year, which gives them the scale of marketing personnel and initiatives to match larger product lines and to gain market share.
  • Large Companies @ $100-500 million in sales should budget $1-5M per year, which is a lower percentage of revenue than required by smaller companies, but still provides plenty of budget for aggressive marketing, both inbound and outbound.
  • Enterprises @ $500+ million in sales should budget $5-20M per year, which is a still lower percentage of revenue than required by smaller companies and may vary considerably based on industry and markets. B2C companies will typically have much higher advertising and marketing budgets due to competitive factors.

Of course, all of these numbers are approximate and will change based on specific industry, regions, markets and corporate plans.

Can you lower these costs?

We often get asked if you can lower these costs by outsourcing to an inbound marketing agency. Our answer is, “There is only one way to find out!

Subscribe to Our Blog

Join hundreds of people who get free and fresh content every week.

Like what you've read? Subscribe to our blog!
Larry Levenson

Larry is passionate about inbound marketing and is a HubSpot Certified Trainer. He's learned the "secrets" of leveraging HubSpot to make marketing hyper-effective and customizes that information to help our clients meet their goals. Larry lives in Prescott, AZ, and when not at work, he is hiking or hanging out with teenagers as a volunteer with Boys to Men USA.