Spending Less Than Your Benchmark? Here’s What It Means and What to Do
Under the benchmark? Start spending Smart before you spend more.
The Truth About Underspending
If your marketing spend falls below the benchmark, you’re not alone. Many companies underspend on marketing, but here’s the thing: marketing budgets aren’t just expenses—they’re investments in growth. Spending below your industry’s average might feel like you’re saving money, but in reality, you could be leaving market share, customer mindshare, and revenue growth on the table.
Spending less isn’t inherently bad, but it’s critical to understand the implications—and how to make every dollar work harder.
What Underspending Really Means
Marketing budgets are directly tied to share of voice (SOV), which influences your share of market (SOM). Research shows that companies that spend below their share of market often lose ground to competitors who invest more aggressively.
- Implication 1: Your competitors might be dominating mindshare, making it harder for customers to think of your brand first.
- Implication 2: You could be missing opportunities to expand reach, build mental availability, and solidify customer loyalty.
Insight: Brands that achieve extra share of voice (ESOV)—spending above their market share—experience faster growth and stronger competitive positioning.
How to Bridge the Gap
Step 1: Start with a Reality Check
The first step is understanding the “why” behind your underspending. Ask yourself:
- Are you over-prioritizing cost control over growth opportunities?
- Do you have a clear picture of what’s driving ROI?
- Is a lack of clarity around strategy holding back investments?
Use the Marketing Budget Benchmark Tool to compare your spend against competitors and reveal exactly how much you need to invest to meet industry standards.
Step 2: Focus on Short- and Long-Term Objectives
Closing the gap doesn’t mean focusing on short-term wins alone. The key is to balance immediate activations with long-term brand-building. This starts with a clear brand and messaging strategy that serves as the foundation for all your efforts. Once your strategy is defined, apply it across paid, owned, earned, and shared channels:
Closing the gap doesn’t mean focusing on short-term wins alone. The key is to balance immediate activations with long-term brand-building. A great way to achieve this balance is by leveraging paid, owned, earned, and shared channels:
- Paid Channels: Use digital ads to drive immediate awareness and conversions.
- Owned Channels: Optimize your website and email campaigns to build direct customer relationships.
- Earned Channels: Strengthen your public relations efforts to build credibility and trust.
- Shared Channels: Engage with audiences through social media to amplify your reach.
A cohesive brand and messaging strategy ensures consistency across channels, making every campaign more impactful. This integrated approach ensures that you’re planting seeds for long-term growth while reaping immediate returns.
Step 3: Build Toward the Benchmark
Underspending doesn’t mean you need to overspend overnight. Take a phased approach:
- Optimize Current Spending: Identify and cut inefficiencies. For instance, are you running campaigns on low-performing channels? Shift those dollars to higher-impact areas.
- Meet the Benchmark: Gradually increase your investment in critical areas like brand-building and digital marketing until you reach the benchmark.
- Exceed the Benchmark: Once you’re meeting industry standards, look for ways to outspend competitors strategically. Remember: the more share of voice you capture, the more market share you gain.
Balancing Short and Long-Term Investments
If you’re underspending, it’s tempting to focus entirely on short-term tactics. But that’s a mistake. True growth comes from balancing immediate activations with long-term brand-building:
- 60/40 Rule: Allocate 60% of your budget to long-term strategies like emotional storytelling and consistent branding. Use the remaining 40% for short-term activations that drive immediate results.
The Bottom Line
Spending less than your benchmark isn’t the end of the world—it’s a starting point. The goal isn’t to spend more blindly; it’s to spend strategically. By optimizing your current budget, prioritizing high-impact activities, and working toward the benchmark, you’ll position your brand for growth—and ensure every dollar works harder.
Ready to close the gap? Use the Marketing Budget Benchmark Tool today to see where your spend stands—and how to grow smarter. Effective budget allocation strategies are essential for maximizing your return on investment. By carefully analyzing past spending trends, you can identify areas that require adjustment. This proactive approach not only enhances financial performance but also drives future growth.
