What does Revenue Spent on Marketing mean?

This metric helps you estimate how much of your company’s revenue to spend on advertising, promotions, and other marketing activities to generate sales.

How it's calculated

This metric takes the expense(s) you specified as marketing in the forecast, divides that total by revenue, and then expresses it as a percentage.

What's better?

It depends

What it means

This metric helps you estimate how much of your company’s revenue to spend on advertising, promotions, and other marketing activities to generate sales. The ideal amount to spend on marketing depends on several factors. If you can spend less on marketing and still generate the same revenue, then that’s typically the most efficient and profitable thing to do. However, if you spend less on marketing than your competition does, you run the risk of potential customers not knowing who you are.

Also, for smaller businesses and startups, this percentage tends to be higher, whereas for established and larger businesses, it tends to be lower. This makes sense because startups often need to spend more on marketing to survive and grow compared to larger, more established companies.

 

(Source: LivePlan.com)