Design Business Council – Company spending on design: survey of UK firms 2008
February 16, 2010
Average promotional design spend
The average promotional design spend is £28K, with 36% of that spend being outsourced, to the greatest extent in construction.
The sector with the highest average spend was wholesale, with an average spend of £44K, possibly reflecting the nature of competition in the sector.
Companies with over 250 employees have the highest average spend at just over £170K and the average spend appears to increase with company size. This would support a model for promotional spend where the design effort in promotional is proportional to the size of the company, i.e. there is a scale affect that does not plateau.
Promotional design as a percentage of turnover
The promotional design spend as a percentage of turnover is highest for other business activities, with 2.2% of turnover spent in this category, followed by wholesale at 1.3% and manufacturing third at 0.8%.
These results indicate that the relative need for promotion is highest in other business activities, whereas it might be expected that as a competitive differentiator it would be most required in wholesale.
There appears to be little relative spend in construction, again identifying it as a very different sector in terms of design input. The relative promotional spend peaks for companies with between 10 and 49 employees (0.6%).
The other three size categories all have approximately the same spend at around 0.3% of turnover. This may, if company size is strongly linked to age of the company, indicate that as companies grow they go through a period where there is a need for relatively greater design focus on promotion.
Average identity design spend
The average spend on identity design was £9.6K, with almost half (46%) of that spend being outsourced. This level of outsourcing is much higher than the other elements of design.
The highest average sector spend was in the wholesale sector at £14.8K and the lowest was in construction at £8.3K.
In the same way as technical and promotional design spending increases with company size, average spending on identity design increases for companies with greater numbers of employees.
Companies with greater than 250 employees spent on average £43K on identity design, which is in strong contrast to companies with less than 10 employees where the average was £1.2K.
Identity design as a percentage of turnover
Similar to promotional design, the highest average spend as a percentage of turnover is in other business activities (0.63%), with wholesale second (0.40%). Again, construction has a different profile and lower intensity of spend than the other sectors.
The inverted u-shaped pattern for design spending as a percentage of turnover present in promotional and user design is repeated for identity design. For companies with between 10 and 49 employees 0.2% of turnover is spent in this category. This is double the level of companies with between 50 and 249 employees and four times higher than both small and large companies.
So what does this mean for Australian design studios
Past design surveys conducted in the UK have been supported by similar findings here so it is fair to assume that this survey will equally apply. At least it is an indicator of what is spent on design and hence a target to budget for when pitching new clients.
