How much should you spend each year on media? In business publications, online, radio, even TV? For B2B marketers this can be quite a quandary. But thanks to B2B Magazine – they have compiled a list of the Top 100 B2B advertisers and how much they are spending on each. (link to full report)
But how can that help you?
Knowing how much the big boys spend on their media and the distribution of that media doesn’t really help me right now in budget season. But knowing how much they spend as a percent of their overall revenue can. Let me explain …
IDC coined a term – Marketing Budget Ratio – which is the percentage of marketing budget to overall revenues (also known as MBR). The MBR for most technology software and hardware firms (according to IDC) is typically 3-5%. In technology pure play services firms you typically see 1.5% (according to ITSMA) or even lower.
I have adapted that idea to create the Media Budget Ratio. This is the percentage of media spend to overall revenue. I took the B2B Magazine report and pulled out some data points. I chose IBM, Cisco and Accenture to match their media spend against their 2007 revenues. What I found was actually quite interesting (see chart below).
What it looks like is these few top B2B firms are spending about .2% of their revenues on pure media (note: no costs of marketing staff, marketing programs, field marketing, PR or ad production are included in these cost). You realize pretty quickly that there is great efficiency that large firms have when branding with traditional media. Take IBM at $195M – more than enough money to spend online, in airports, on TV etc. Accenture reportedly spends $60 just to promote the Tiger relationship that you see everywhere.
But what if you are only in the single Billions of dollars in total revenue? Perhaps with a $2-4Million dollar media spend - you might find it hard to compete with the big boys (which is frankly how I feel in my role). To me this chart while depressing is yet another wake up call for marketers to move aggressively into Social Media – where your customers and prospects can amplify your message for you!
