As a marketer, you know the importance of investing in technology to drive results and improve performance. But with the vast array of MarTech options available, it can be overwhelming and a bit subjective to determine how much to budget for these tools.
In this post, I'll guide you through the basic steps to determine the right MarTech budget for your business, as well as some benchmarks based on how other Martechbase users are allocating their own tech spend.
1. What is a MarTech budget?
A MarTech budget is the amount of money that a business allocates towards implementing and maintaining its marketing technology, or MarTech, stack. This can include a wide range of tools and technologies, such as customer relationship management (CRM) software, marketing automation platforms, and analytics tools.
A MarTech budget can help a business make more informed decisions about its technology investments. By setting aside a specific percentage of your marketing budget for tech, you can avoid overspending on tools and technologies that may not provide a good return on investment.
Ultimately, a MarTech budget is an important component of a business's overall marketing strategy. It can help ensure that a business has the right tools and technologies in place to support its marketing efforts and achieve its goals.
2. Factors to consider when estimating your MarTech budget
What are your digital marketing goals?
To determine your budget, you should first identify your MarTech needs and the goals you want to reach. Knowing exactly what you need and what you are aiming for will help you decide how much money you should allocate for your MarTech stack.
Once you have a good idea of your budget, you can start to shop around and find the right MarTech solution for your needs. With the right budget, you can ensure that your MarTech stack is up-to-date, reliable, and cost-effective.
What resources do you have available today?
Second, you should consider the different types of MarTech solutions that are available today across your organisation, so you don’t end up paying twice for the same capabilities.
Different tools will have different price points and features. Based on your level of tech sophistication you might want to consider more basic solutions to start, to then add in more features as needed. It's also important to note that some products might offer a 'freemium' model, so you might be able to get some features for free. Do your research and make sure you understand the different options available and the potential cost of each. Doing this will ensure you get the best value for your MarTech budget.
What new services do you need?
When planning your MarTech budget, it is important to consider how much of your budget you can devote to new MarTech solutions each year. This can include replacing existing tools with newer alternatives depending on your changing goals and objectives. It is important to review your current MarTech stack and make sure you are not spending money on unnecessary tools or services
Additionally, it is important to consider the cost of implementation, training, and maintenance of each new tool when setting your budget. By doing so, you can ensure that you are allocating the right amount of money to your MarTech stack and that it is helping you work towards your overall goals.
3. Examples of MarTech budgets
The percentage that a business should allocate towards its MarTech efforts will depend on a variety of factors, such as the size of the business, the complexity of its marketing efforts, and the goals it wants to achieve.
The latest data from Gartner’s annual Spend Survey gives us a good reference point, with Marketing Technology (as a combination of Marketing Operations and Marketing Analytics) representing the largest category in the CMO’s budget at 26.6%.
Small businesses with limited marketing needs may start with a MarTech budget of around $500 per month. This can cover the cost of basic tools and technologies, such as a CRM system and email marketing software.
Medium-sized businesses with more complex marketing efforts may need a MarTech budget of around $1,000 to $2,000 per month. This can cover the cost of more advanced tools and technologies, such as marketing automation platforms and analytics tools.
Large businesses with extensive marketing operations may require a MarTech budget of $5,000 per month or more. This can cover the cost of enterprise-level tools and technologies, as well as the resources needed to implement and maintain them.
Again, these are just examples, and the actual MarTech budget for a business will depend on its specific needs and goals. It's important for businesses to carefully evaluate their MarTech needs and allocate the appropriate amount of money towards meeting those needs.
4. Best practices for estimating your MarTech budget
Research and compare the costs of different MarTech solutions
This can help you ensure that your business is getting the best value for its money and avoid overspending on tools and technologies that may not provide a good return on investment.
Marketing Tech research tools like Martechbase or Martechmap can help you navigate the vast ecosystem of technology solutions and easily compare features and capabilities.
Additionally, you can also research the costs of these MarTech solutions through online forums and specialised sites like G2 Reviews or Crunchbase, where users often share their experiences and opinions on different tools and technologies.
Consider long-term growth when estimating budget
This can help ensure that your business has the right tools and technologies in place to support its marketing efforts as it grows and evolves.
For instance, some tools and technologies may be suitable for a small business but may not be able to support the needs of a larger organization. By considering long-term growth, businesses can ensure that they are investing in solutions that can grow and evolve with their business.
Overall, considering long-term growth when estimating a MarTech budget is essential for any business that wants to use technology to support its marketing efforts.
Create a budget that is realistic and achievable
This can help ensure that a business is able to implement and maintain its MarTech stack without overburdening its resources or compromising its marketing efforts.
It's also important to regularly review and adjust their MarTech budget as needed (see my article on how to audit your MarTech Stack) to help ensure that the budget remains realistic and achievable, and that the business has the resources it needs to support its marketing efforts and achieve its goals.
Here’s an example of how tech spend analytics look like on Martechbase:
Ultimately, the right MarTech budget for your business will depend on a number of factors. But by considering the size of your business, your industry, and your marketing goals, you can develop a budget that will help you achieve your marketing objectives.
There are a few general guidelines you can follow when setting your MarTech budget. For example, Gartner suggests that businesses should allocate 3-5% of their total marketing budget to MarTech, with CMOs allocating as much as 26% on average in 2021.
Whatever percentage you decide to allocate to MarTech, make sure you're investing in the right tools for your business. There's no point in spending a lot of money on MarTech if the tools you're using aren't helping you achieve your marketing goals.
To get the most out of your MarTech budget, make sure you're investing in tools that integrate well with each other. A well-integrated MarTech stack can save you time and money by eliminating the need for manual data entry and other manual tasks.
Finally, don't forget to factor in the cost of training and support when setting your MarTech budget. Even the best MarTech tools won't do you any good if your team doesn't know how to use them.
Ready to audit your MarTech stack? Get your free Martechbase dashboard right here.