“How much budget should I allocate for my product marketing efforts?”
We often get this question from CMOs, VPs of Marketing, and heads of Product Marketing. Why? Because budget allocation for product marketing management (PMM) can be tricky. The PMM team’s workload fluctuates year-round, and it requires periodic sprints associated with product launches, campaigns, and sales kickoffs.
This blog post is intended to give you practical guidance and help you answer this crucial question for yourself. To get there, let’s go through some of the most important considerations in your budgeting decision process—bearing in mind that there’s a top-down approach as well as a bottom-up budgeting approach for product marketing.
The top-down approach would be to assign a percent of your overall marketing budget to product marketing. For example, we’ve seen PMM budgeted at about 20% of total global marketing spend—which, in turn, is often a percentage of forward-looking revenue target. This would include key spend such as headcount, content development, sales enablement, and customer/competitor research. You’ll also need a separate budget allocation for marcom, campaign, branding, demand gen, and so forth.
However, the bulk of this blog post will provide details for designing a bottom-up budgeting approach that you can use to customize an overall budget. Let’s take a look at how that works:
- A good rule of thumb is one FTE for every $25-50M of product line revenue. (This does not count all the product option variations and line extensions of a main product line.) For example, a $100M business should have two to four PMMs with highly separable product responsibilities. Note that each of these PMMs should have additional support, whether contracted fractional staff or program dollars.
- Even if you’re an early-stage startup with less than $25M, you should have at least one PMM—not just a marketing generalist, but an experienced senior product marketing manager. Getting the maximum ROI on sales/marketing investments depends on having rigorous fundamentals in place like a solid GTM plan, well-honed value propositions, clear messaging and positioning, compelling use cases, competitive intel, and so on. You’ll waste a lot of sales/marketing execution dollars if you don’t do PMM right.
- A senior PMM with 8+ years of experience is going to run you $150-200K/year annual salary plus payroll, taxes, and benefits, which adds another 20% or so. There are also RSUs (restricted stock units) and end-of-year bonuses to consider.
- “Voice of the customer” research is a mix of qualitative and quantitative surveys of your customers, including your wins, losses, and prospects. This can be expensive and time consuming, so we recommend a budget of $200K per major product line. Here’s the breakdown:
- Good rule of thumb for annual qualitative research is $1,000 for each in-depth interview. For example, a sample size of 30 interviews would run $30K. We recommend no fewer than n=20, with a good mix of accounts in the categories above plus across geographies.
- Good rule of thumb for annual quantitative research is about $200 per survey response. For example, a survey of 500 contacts will run you $100K.
- For companies with less than $100M, you can get by with your product marketer having a budget of $100K to fund an external agency of contractor(s) to deliver some (but probably not all) of the research that’s needed.
- Providing competitive intelligence and sales enablement for your sales organization (e.g., competitive battlecards, sales playbook content, competitive alerts, etc.) requires one dedicated FTE by the time you have $100M+ annual revenue.
- For companies with less than $100M, you can get by with your product marketer having a budget of $100K to fund an external agency of contractor(s) to deliver some (but probably not all) of the assets noted above.
- Even if you have a content marketing team, the PMM(s) will need to leverage themselves by tapping external agencies or contractors to provide the core content needed by the rest of your marketing organization.
- We recommend a minimum $100K budget allocation per major product launch. Think of this as “burst capacity” for all kinds of content for either a new product or major update to an existing product. What will $100K fund? That’s enough to cover a couple solid whitepapers, three to five blog posts, an infographic, and perhaps a product animation/video. You can mix and match depending on the TOFU, MOFU, and BOFU needs of your digital marketing and campaigns team. Don’t forget to reserve an additional budget of $50K or so [per $25M+ product line] to refresh existing content (both writing and graphics) if this is not already budgeted in the content marketing team.
- We’re going to call out graphics/creative budget, as that’s often an afterthought if it’s not already covered in the content marketing team’s budget. $100K can cover more than just one $25M+ product line, since creative/digital assets are more reusable.
- Your campaigns/digital demand gen team will need support throughout the year for a variety of campaign needs, such as gated (e.g. webinar, eBook, whitepaper) and ungated assets (e.g. customer testimonial video, product animation, infographics). We assume the above content development budget allocation will cover most, but not all, of your campaign team’s needs. That’s why we would recommend an incremental $25-30K for each campaign. And remember: campaigns happen throughout the year, not just at major product launches.
- Make sure your PMM team is providing the very specific inputs they’ll need to drive demand: ideal customer profile, personas, buyer’s journey, content strategy, key pain points, and use cases. If your PMM team isn’t producing these in sufficient depth, reserve another $100K to engage an external PMM expert or agency to help get these done.
- It’s important for the PMM to be knowledgeable about both the technology and the industry verticals (e.g. healthcare, banking, insurance, retail, ecommerce, communications, tech, etc.) into which your product line is being sold. This will require the PMM to have access to some valuable resources, which will cost money.
- Subscriptions to key firms such as Gartner, Forrester/SiriusDecisions, IDC, ESG, and Gartner Group are sometimes funded out of the analyst relations budget line item, but if they’re not, then PMM should have some funding to cover these essential research tools. How much? We recommend $100K per year.
- Firms that are over $100M typically have, or should have, at least one FTE dedicated to a robust sales enablement function. If not, the PMM team should have a budget allocation of $100-200K to cover a range of tactics, including:
- Content: Sales playbooks, competitive battlecards, call scripts, email templates, etc.
- Tools: Sales playbook infrastructure such as Klue, Crayon, and Seismic; listening platforms like Gong.io.
- Training: Webinars, coaching, mentoring, role playing, etc.
- A good rule of thumb for your sales enablement investment is $250K per $25M major product line. A $100M revenue company should be spending 1%, or $1M, on sales enablement.
- PMMs often form the hub of a wheel, with the spokes being a few key marketing functions such as field marketing, integrated/digital/demand gen marketing, events, campaigns, AR, PR, search marketing, social media, web team, etc.
- This is typically already budgeted under a separate line item, so it’s not necessary to give your PMM any extra money here. The content development budget mentioned above will be sufficient for PMM to feed the other internal teams.
- Sometimes tech clients of ours give PMM money that they in turn dole out to serve internal marketing teams. If so, you’ll want a war chest of $100-250K. There’s a huge range on this because it depends on the GTM plan.
Travel/Staff Development budget:
- PMMs should be out with customers, attending key industry events (e.g. trade shows, user group meetings, etc.), and investing in their own career development (e.g. product marketing training, certifications, and professional development).
- You might want to reserve $10K per year for attendance in PMM events from organizations such as the Product Marketing Alliance, Product Marketing Community, and Sales Enablement Summit.
- With people beginning to travel again, we recommend a $15K travel budget per FTE.
As you can see from our exhaustive list above, in order to have the business impact you’re counting on for your GTM investments, your PMM organization will need the right level of resources. We’ve created a bottom-up budgeting guide sheet for an at-a-glance summary of all the items we’ve covered in this blog, and if you’d like to get a second opinion on your preliminary budget, schedule a free 30-minute confidential consultation.