Does your NZ marketing budget underweight crucial digital channels?
The average spend on marketing is 7.5% in 2024, going as low as 5% for construction and as high as 12% for consumer goods. Regardless of whether you spend 2% or 12%, the question is how should you allocate it for best return? And how much to allocate to digital vs traditional marketing?
Average is not always good, but it’s a benchmark, so in this blog I break down NZ media spend and play it out in a real budget.
First, what proportion of your revenue should you spend on marketing?
The old “4% average spend on marketing” is long gone and has moved to 7.7% according to Gartner:
Gone are the days when manufacturers would spend 1.5-2% and the average marketing spend was 4%. Now it’s at 7.7% (interestingly down from 9.5 two years ago) but it still varies by industry. Unfortunately this year the actuals were not published as they were initially, but this is a guide:
| Industry | Spend on marketing as % of revenue |
| Consumer goods/products | 8-12% |
| Manufacturing | 7-11% |
| Pharmaceutical/life sciences | 7-11% |
| Agricultural supply/agritech | 6-9% |
| Construction/home services/trade associations | 5-8% |
| Technology/IT & Business services | 5-8% |
| Travel tourism & hospitality | 6-9% |
| Healthcare/medical/wellness services | 5-8% |
| Overall | 7.7% |
NZ Media Spend 2025
So how does this translate in NZ? We don’t have average marketing spends, but we do have media spends. Based on 22 years of media spend up to 2024 (released in March 2025), we can see the following media trends (I think I transformed Alexanders into a “digital agency” around about 2011 after seeing this graph!):
Source: Advertising Standards Authority Industry Turnover Report and Rachel’s own spreadsheet analysis over 22 years.
Online is the only standout, now accounting for around 60% of all media spend in 2024 (published March 2025), with newspaper and television waning (note the above figures started to split digital out from tv, radio, newspapers and mags in 2023) but outdoor seeing a resurgence.
In 2024, total NZ media spend allocation was as follows (compare this to your own budget):
Tip: if you’re still spending 80% of your budget on print or radio, wow, what a rep. Best you contact a well-known digital agency in Christchurch quickly! That was another reason I formed Alexanders – I hated seeing people frittering away too much $ on single channels with good sales pitches.
The left covers “media”, and doesn’t include web site development, search marketing, channels like trade shows, inhouse social media time, agency time or marketing salaries (and probably a host of other things too).
So what’s in the mysterious online 60% spend?
If we break down the online 60% component, the global figures from a PwC report excluding SEO & hosting are approximately:
| 2024 Online ad spend breakdown | |
| Search ads | 40% |
| Display ads inc banner, rich media, sponsorship & native | 29% |
| Video ads | 24% |
| Classified (Trademe, Autotrader, Ebay etc) | 5% |
| Digital audio (podcasts, Spotify etc) | 3% |
(note the elements in brackets are indications of what I suspect is included in this category – indicative only)
Approximated from https://www.statista.com/outlook/dmo/digital-advertising/new-zealand#ad-spending
So how does this spend compare against how media is actually consumed?
When internet users around the world were asked how they typically find out about new brands and products in 2024, these were the top 10 results:
- Search engines (33%)
- Ads seen on TV (33%)
- Word-of-mouth recommendations from friends or family members (30%)
- Ads seen on social media (30%)
- Brand/product websites (26%)
- TV shows/films (25%)
- Ads seen on websites (23%)
- Online retail ecomm portals/websites (23%)
- Recommendations/comments on social media (23%)
- Consumer review sites (23%)
Source: https://blog.gwi.com/marketing/brand-discovery/
So, how does average ad spend pan out for a company whose turnover is say $1,668,701?
Applying a spend of 7.7%, we get a marketing budget of approximately $128.5k. Most of my clients don’t do television, so I’ve moved that to website and upped it a bit, and added in some SEO. Then applied the online percentages to the remaining with a grain of salt.
This is what it looks like:
| Potential marketing budget for $128,490 | |
| Website (if done in 2025) | $ 32,000 |
| Google Search/Bing/Shopping Ads | $ 23,880 |
| Display campaign (Meta, Google Display etc) | $ 17,220 |
| SEO inc marketing to AI engines | $ 14,000 |
| Digital Classifieds + lead gen | $ 2,700 |
| Radio | $ 7,100 |
| Newspaper | $ 3,000 |
| Outdoor | $ 5,900 |
| Video ads | $ 14,400 |
| Magazine | $ 3,100 |
| Digital audio | $ 1,740 |
| Unaddressed mail | $ 700 |
| Addressed mail | $ 700 |
| Cinema | $ 300 |
| $ 128,490 | |
The above is based on roughly $100k with the percentages applied from the above e.g. 60% on online, and the rest across the average spend of media, excluding TV and adding in SEO. That doesn’t account for things like CRM, AI and Canva subscriptions. In practice, we won’t necessarily be doing every item on the list. The spend on visible Display media is roughly 75% of what is spent on search. And 60% of a search budget could be on video. Roll on AI video avatar production.
A decent company website could be more likely to be $35-40k+ and there’ll be edits and hosting to factor in, so perhaps the web budget allocation should be factored in over 2-3 years.
If your target market is retirement age or older, then the digital skew might need to be reduced. Similarly, TV is the main brand discovery method in over 55’s, search in the “middle ages”, and social in the under 35’s though which social channel you allocate to also varies on your typical customer age.
Interesting to look at the ratio of paid to search media. Google used to tell us to spend no more than 30% of online ads budget on display ads, because search ads visitors are further down the readiness funnel and have a higher click through rate of 3% vs display ads which are typically garner a lower 0.35-0.6% click through.
SEO could be higher if it’s a catchup year (good year to boost your seo efforts now you also need to cue AI engines).
Radio might not suit B2B or specific audiences, but could be really vital if you have retail or if you have a big sale. Travel and entertainment might be key for key accounts.
What about the all-important marketing plan? Do you need to factor in some strategic support from a marketing consultant or digital agency, or photographers and videographers for video and social reels? Goodbye cinema and unaddressed mail?!! Hello Chat GPT? Podcasts and digital outdoor seem to be ones to watch or dive into. Email marketing is probably a salary rather than much of a fixed cost if done through your CRM
Many companies would need to factor in tradeshow attendance and stands. And inhouse salaries for marketing staff. If you’re setting up a customer relationship management platform, that needs a chunk of love too – maybe some consulting to get your automation and funnels cranking.
Comparisons
So how does your marketing and advertising budget compare to the average spend stats? Is there anything you think you’ve underweighted or overweighted?
Don’t have a marketing budget?
If you don’t have a defined marketing budget, it’s a good time to get one – possibly a new financial year already? Marketing budgets are best done as part of a marketing strategy and prior to your financial year end. But it’s never too late.
Benefits of having a marketing budget:
- Having a plan generates focus, enthusiasm and momentum
- You can get the powers that be to sign it off once, so you can get on with implementation.
- You’ll have a clear brief and budget for your digital marketing agency.
- You can say “no” to all those pesky media sales reps – or yes as the case may be to ones that align with your strategy.
- Your business will grow with a dedicated marketing resource that’s focused on, and resourced to leverage opportunities.
- You can avoid media bias by spreading out your spend so you’re not vulnerable to one particularly good sales rep who pulls the wool over your eyes.
It’s hard work doing your day job and finding time for marketing, but it’s better to be confident and have clarity, than spend $ aimlessly to feel like you’re doing something just to tick the marketing box.
Don’t have a marketing person to plan or implement a budget?
It is often just as cost effective to outsource your marketing to a digital agency to prepare and manage your marketing, as they have inhouse experts. Juniors – while they have a lower hourly rate – have to learn on the job, whereas an agency has a broader skillset, and access to the latest techniques, so you get traction quickly. Plus a junior without a senior marketer to learn from could make some well-intended but crucial mistakes. Your budget is precious. Every dollar counts!
Harness enthusiastic team members
If you’ve got an enthusiastic administrator or business development person, Alexanders can act as a fractional senior marketer to mentor and guide marketing activities as a kind of part time, contract marketing department. We also offer digital marketing coaching (Alexanders is registered with MBIE to provide co-funded services to eligible companies).
Perhaps it’s time to set up a marketing department? This is something Rachel has experience in too though eventually she does herself out of a [part-time] job as the department grows.
Getting best bang for buck
It’s important to make sure you’re getting good bang for buck from your budget, regardless of its size. Take some time to check if it’s balanced – or if that’s beyond your pay grade, get an expert in who can suggest tweaks.
Feel free to give Rachel a bell to review your marketing spend to see if it can be redirected to get better results. 021 556 560
