The term "marketing automation" has been mentioned a lot over the past several years.
It's considered the marketing technology that is most likely to deliver significant, measurable ROI.
As of 2016, 49% of companies currently use marketing automation, with over half of B2B companies adopting the technology.
With the increasing number of marketing automation tools available – from simple platforms like ActiveCampaign to robust systems like Hubspot – more organizations are finding ways to integrate automation into their marketing efforts.
But is marketing automation right for every organization, and if so, how much should you spend on your marketing automation efforts? That's what we'll answer here.
Before that though...
It's important to identify what "marketing automation" actually is.
Is it email marketing? Does it include social media automation?
Many people define marketing automation in different ways and it's important to clearly define it before placing a value around it.
What is marketing automation?
Simply put, marketing automation is the replacement of manual marketing tasks with automated tasks using software platforms or other technologies.
Marketing automation is typically implemented to:
- Decrease the energy it takes to complete existing marketing tasks
- Increase the potential impact of certain marketing tasks, or
Marketing automation is a broad term that can include any system or combination of systems that replace manual marketing tasks with automated systems. This can include or exclude the following (some are overlapping):
- Email marketing
- Customer relationship management (CRM)
- Social media marketing
- Workflow automation
- Sales automation
- Internal marketing or sales process automation (e.g. employees get prompted when certain events occur)
- and much more..
The real challenge is determining which marketing tasks you should automate, how to do it most effectively and how to set your automation up to grow with your company.
How much to budget for marketing automation
First, it's important to mention up front that there's no magic percentage of your marketing budget that will unlock the perfect automation for your company.
Every business is unique, with specific needs, resources and goals and those factors should be evaluated to determine the most appropriate budget.
Even more, it's recommended that you work with a digital marketing agency (or your internal marketing department) to leverage people who understand what tools are available and how organizations have been successfully implementing marketing automation.
Using history to guide your marketing automation budget
There's a good chance that you've already spent some of your marketing dollars on marketing automation. Whether it's going all-in one platform like Hubspot or training a couple employees to use Hootsuite and Constant Contact.
A great way to start is to review what you've already been spending each year on marketing automation. For some, this will provide a great guide and for others it won't be nearly clear enough.
If you don't have enough of a history or you simply want to be more educated, it's valuable to take a look at what others are spending on marketing automation.
In 2013, Marketo co-founder Jon Miller said that larger sized companies should spend around 3% of their marketing dollars on marketing automation, while smaller companies should plan to closer to 7% of their budget.
Just a year later, in a 2014 survey, 81% of B2B marketers reported allocating 10–39% of their marketing budget to marketing automation.
By comparing those two figures, you can see that there has been a lot of growth in increased emphasis on marketing automation. You might also conclude that marketing automation spend is sharply rising.
But, what isn't being considered is the number of more approachable, inexpensive marketing automation solutions that have popped up between 2014 and today. Until just a year or so ago, if you wanted to get serious about marketing automation, you were limited to large platforms such as Pardot and Marketo.
Now you have the option of starting off with a lower cost product, especially as some of the major marketing automation software companies are starting to provide entry-level products (think HubSpot Free & HubSpot Starter).
With all of that in mind, your marketing automation should likely land between the 5-30% range of your marketing budget.
To narrow that range, consider the factors mentioned above which are specific to your company. For help with that, try using our digital marketing calculator. It's free and you just plug in your revenue, whether your B2B or B2C, if you sell a product or service and finally how much of your revenue is generated online.
Click below to get your digital marketing budget right now: