SaaS Marketing Spend

Part
01
of one
Part
01

Global Marketing Spend for SaaS Companies

On average, 30% of SaaS companies' Sales and Marketing budget is invested in marketing efforts, while 10% of the companies' revenue is spent on Sales and Marketing. Below, helpful findings have been highlighted, followed by an outline of the research strategies attempted to determine the requested information.


HELPFUL FINDINGS



RESEARCH STRATEGY

We were not able to reliably determine the total global marketing spend for Software as a Service (SaaS) companies.

To start the search, the research team has leveraged the information uncovered by preliminary research. Since it was determined that SaaS companies spend 30% of their Sales and Marketing budget on marketing specifically, we have decided to conduct a search for the following data points: [1] number of SaaS companies in the world and [2] the average Sales and Marketing spend of a SaaS company. The reasoning behind this strategy was that the global marketing spend in US dollars can be triangulated by determining the total global SaaS companies Sales and Marketing spend, followed by calculating the marketing spend as a part of Sales and Marketing spend (30% on average). To find these data points, we have searched various industry-specific sources, such as The Software Report, CNET. We have also searched company databases, such as Hoovers, hoping to find a list of all existing global SaaS companies. This strategy has failed because no reliable, supported information was available regarding the total exact number of SaaS companies worldwide. Some unreliable sources estimated the total number of SaaS companies worldwide to be greater than 25,000, however there was no support for this information which is why we decided the information is not credible enough to be used for calculation.

Secondly, in another attempt to triangulate the global marketing spend, we decided to take a different approach. We have searched for the following data points: [1] the total worldwide revenue generated specifically by SaaS companies marketing efforts and [2] the average ROI specifically for SaaS companies' marketing efforts. Our goal was to use these two data points to calculate the global marketing spend of SaaS companies, by calculating the companies' marketing investment before "return". This information would then be used as a proxy for SaaS companies' marketing spend. Sources we've searched in an attempt to obtain this information include industry specific publications such as Tech Radar, SD Times, as well as some credible blogs, including those of venture capitalist Tomasz Tunguz. After extensive research, no relevant information could be obtained regarding either of the two required data points. What was available in the public domain were irrelevant pieces of information such as the top companies in the SaaS space by revenue, or marketing spends for some specific large SaaS companies. Because data points required to perform this triangulation could not be found, we abandoned this strategy.

After two failed triangulation attempts, we decided to focus on the biggest players in the field to obtain information regarding total global marketing spend. We decided to search annual, business and investor reports of the biggest SaaS companies in the world, hoping we could locate statements directly from the companies regarding the global marketing spend of SaaS companies, since the biggest players in the market likely know this information and might have disclosed it publicly, possibly by comparing their companies' marketing spend to the global level. Reports we looked into include those from companies Adobe, Slack, Microsoft, Salesforce, among others. This strategy has ultimately also failed because none of the biggest SaaS companies disclosed relevant information pertaining to the total marketing spend of SaaS companies worldwide, although some irrelevant information was highlighted in comparison to other companies worldwide, such as GAAP measures.
Sources
Sources