The heart of a business’s success lies in the marketing strategy it employs. But why do businesses need marketing? Marketing is the act of promoting as well as selling services or products to a targeted group of consumers. Good marketing allows consumers to understand why the product you are offering is better than your competitors’. According to experts, all businesses must allocate a certain portion of their revenue to enhance their marketing strategies. It’s important to keep in mind that different industries have different requirements, different budgets and therefore, different marketing spend.
Let’s take a look at the general marketing spend of a few common industries and stats on some of the most successful businesses in these industries.
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1. Healthcare
The need to implement digital marketing in the healthcare industry is growing by the hour. Healthcare marketing practices offer an open path of communication for your prospective patients by heightening their interest and building trust. Effective healthcare marketing can lead to successful patient engagement, thereby growing both your practice and business. Statistics show that 93% of healthcare companies used digital marketing in 2019. Even healthcare giants that are already established are no exception. In fact, the U.S advertising spend for Pfizer was 2% of its total revenue, which amounted to over $1.2 billion in 2018. Digital marketing has been a beacon of hope for several businesses in the industry.
2. Retail
In the retail industry, businesses must take advantage of the benefits offered by marketing to connect with their target audience and stand out in a competitive market. This B2C industry is a top spender in terms of marketing costs compared to revenue. Marketing spending in this industry is invested in many mediums, particularly SEO. It is estimated that by the end of 2020, search engine marketing will account for 47% of the total retail digital ad spending. Speaking of ad spending, Amazon had spent 91% of its entire marketing budget on search engine marketing back in 2015.
3. Tourism
Marketing in the tourism industry is quite different owing to its low repurchase rate. This is one of the main reasons why industries need to market their services in an effective manner to a wider range of prospects. The main purpose behind tourism marketing is to help your business stand out from its rivals, attract customers and convert them successfully. Digital advertising accounts for over 47% of all travel global ad spending while the industry makes up 11% of the total US search spend. As you can see, digital marketing is a vital tool for the tourism industry to reach out to travelers searching for their favorite destinations.
4. Real Estate
Irrespective of the fact that you are a small business or an independent real estate agent, the present marketing scenario is evidence that all real estate professionals should invest in their marketing strategies. Reaching out to new prospects is vital in the real estate industry and that is just what digital marketing offers. An average publicly traded company in the professional services spends 12% of its revenue on marketing. Also, 31% of real estate agents spend over $1000 a year on their digital marketing efforts. The real estate industry has matured significantly with buyers doing thorough research on the kind of property they want before making the final buy. This has converted digital marketing into a more lucrative option for the industry.
5. Food & Beverage
The food and beverage industry covers a wide scope of business. It has a number of sub-industries within it, with each coping with competitive challenges of its own. Both B2C and B2B companies in the food and beverage industry need to invest in quality marketing to establish their presence and survive the competition. It is for this reason that the average restaurant’s marketing budget is 3-6% of its total generated revenue. In terms of well-known market leaders, Coca-Cola spent 18% of its total revenue on marketing in 2018. This portrays why Coca-Cola is such a strong brand in this market.
6. Technology
There is no escaping the fact that the technology industry is successfully growing in leaps and bounds. This has made it important for businesses in this industry to invest a considerable portion of their total revenue for marketing. With so many competitors, it is important that you stand out from the crowd and show your consumers what makes your company the best choice for them. The trend is similar for all companies, big and small alike. Digital marketing has taken over a large portion of tech company’s marketing budgets. In fact, technology and software companies spend about 25% to 50% of their marketing budget on digital marketing. Investing effectively into marketing has helped the key market players reach where they are today.
7. Construction
When it comes to owning a construction business, a great deal of exposure is necessary. The best way to achieve this is by investing in proper marketing, thus enabling your business to grow. Construction companies can derive several benefits from good marketing, such as improved client satisfaction, higher sales, better profits, enhanced brand identity, and the opportunity to enter new markets.The industry average marketing expenditure for construction companies lies between 5% to 10% of their annual revenue. In terms of companies, Caterpillar, a premier manufacturer of construction and mining equipment, spends approximately 70% of its marketing budget on digital marketing and 30% on print.
Takeaway
Investing in good marketing should be a priority for all businesses. Without good marketing, your potential customers could be completely unaware of the best services and products you have to offer. Marketing spend is supposed to differ from company to company. However, it is absolutely essential to invest in marketing to make your business a success in recent times. A quality marketing strategy is the key to taking your business a notch higher and closer to its aim.
