Two companies each report spending 6 percent of revenue on marketing. One counts only advertising. The other counts advertising, agency fees, software, salaries, events, and content production. Their numbers look identical, but their investment is not even close.
Before any business can answer “Are we spending enough?” it has to answer a more basic question: what counts as marketing spend? Without a consistent definition, year-over-year comparisons mislead, benchmarks become meaningless, and budget debates stall on confusion rather than strategy.
Why Budget Definitions Drift
Marketing spending is spread across departments, vendors, and accounting categories. Software may sit in IT’s budget. Sales enablement materials may be charged to sales. Contractor work may hide in general administrative expenses.
The result is inconsistent reporting. One year includes salaries; the next year does not. Software is counted when it is new and forgotten once it renews. Leaders end up comparing incomplete numbers.
The Seven Budget Categories
A useful budget separates spending into distinct categories while preserving the total view.
1. People. Salaries, benefits, and payroll costs for internal marketing staff, including partial allocations for roles that split time with marketing.
2. Partners. Agency retainers, consultants, freelancers, and fractional marketing leadership.
3. Production. Content creation, photography, video, design, printing, and copywriting that are paid for outside of retainers.
4. Media. Paid search, paid social, display, sponsorships, directory listings, print, radio, and other paid placements.
5. Technology. Marketing software subscriptions: CRM, email platforms, SEO tools, social schedulers, analytics, website hosting, and plugins.
6. Data and research. Market research, customer surveys, lists, competitive intelligence, and analytics services.
7. Contingency. A reserved amount for testing, opportunities, and unexpected needs, usually 5 to 10 percent of the total.
A Category Checklist
Use these questions to make sure the budget is complete:
- Are all marketing-related salaries included, even partial ones?
- Are all agency and freelancer invoices captured?
- Is software listed, including annual renewals and add-on seats?
- Are trade shows, sponsorships, and event costs included?
- Is website hosting, maintenance, and development included?
- Are production costs separated from media costs?
- Is there a defined contingency line?
Watch for Double Counting
Completeness has a twin risk: counting the same dollar twice.
- Agency media. If an agency’s invoice includes ad spend it places on your behalf, do not also count that spend under Media.
- Bundled software. Some platforms include services; assign each cost to one category.
- Shared staff. If a team member splits time between sales and marketing, allocate a percentage rather than counting the full salary in both budgets.
A short note on each line explaining what it includes prevents most double-counting errors.
Working and Non-Working Spend
Some teams distinguish working spend, money that directly reaches the audience such as media, from non-working spend, such as people, production, and technology. The distinction is useful for analysis, but both are real investments. Cutting non-working spend too aggressively often leaves media dollars without the creative, data, or systems needed to perform.
Make the Total View Useful
Once categories are consistent, the budget becomes a decision tool. Leaders can see the ratio of people to media, whether technology costs are growing faster than results, and where contingency funds were used. SETN Consultants starts every budget review by building this complete picture, because strategy built on an incomplete number is strategy built on guesswork.
A Quick Example
Consider a company that reports a $90,000 marketing budget, consisting entirely of ad spend. A complete view might add a part-time marketing coordinator at $35,000, an agency retainer at $36,000, $12,000 in software, $8,000 in photography and design, and $4,000 in website hosting and maintenance. The real investment is about $185,000, more than double the reported figure. That difference changes every conversation about return on investment. It also changes benchmark comparisons, because most published benchmarks include far more than media. Leaders cannot judge whether spending is too high or too low until they see the whole number.
Frequently Asked Questions
What counts as marketing spend?
All costs associated with marketing activities: people, partners, production, media, technology, data, and contingency.
Should marketing salaries be included in the budget?
Yes, for a complete view. Report them separately so comparisons remain clear.
Is website hosting a marketing expense?
For most small and midsize businesses, yes, because the website is a primary marketing asset.
How do I avoid double counting?
Assign each cost to one category and note what is included in agency invoices and bundled tools.
Audit your full marketing investment and see what your budget really includes with SETN Consultants: setnconsultants.com/services/
