Marketing budget percentage of revenue
How much should you spend on marketing? The usual answer is 5 to 10 percent of revenue, but that number alone will not help you. What matters is your growth stage, your margin and what you actually count into the budget. Below you will find benchmarks from large surveys, a calculation you can do in ten minutes, and an honest admission of when a marketing budget percentage of revenue does not work at all.
Key takeaways
- An established company with steady sales gets by on roughly 5 to 8 percent of revenue. A company nobody knows yet, or one entering a new category, needs closer to 10 to 15 percent or it will not move at all.
- According to the Gartner 2026 CMO Spend Survey, which polled 401 marketing leaders between January and March 2026, budgets at large companies sit at 7.8 percent of revenue, against 7.7 percent in 2025. Budgets are not growing, they are being reshuffled.
- The CMO Survey from Duke Fuqua School of Business (spring 2025, 281 marketing leaders) reports a higher figure, 9.4 percent of revenue, and also that 63 percent of leaders feel stronger pressure from CFOs to prove returns with numbers.
- Content production and the time of the person running it belong in the budget. A budget made only of media spend is an optical illusion and it breaks in month two.
- A bottom up calculation beats any percentage: how many deals you need, how many leads per deal, what one lead costs. The steps and a worked example are below.
What marketing budget percentage of revenue is normal?
For most small and mid sized companies a healthy range is 5 to 10 percent of revenue. The lower end fits established firms with repeat customers, the upper end fits those who want to grow faster than their market. If you are entering a new category or a new country where nobody knows you, plan for 10 to 15 percent, and plan it for a year rather than a quarter.
The large surveys frame it similarly. The Gartner 2026 CMO Spend Survey, which ran from January to March 2026 with 401 marketing leaders mostly from companies above one billion dollars in revenue, puts marketing budgets at 7.8 percent of revenue, one tenth of a point above 2025. The CMO Survey from Duke Fuqua School of Business, answered by 281 marketing leaders in spring 2025, reports 9.4 percent of revenue.
The numbers cluster around eight and nobody has the exact answer. A percentage is a starting estimate, not a calculation. And watch for the thing the tables miss: a percentage of revenue ignores margin. A company with a sixty percent margin and one with an eight percent margin cannot spend the same share even at identical revenue. If your margin is thin, calculate from gross profit instead and you will land much closer to reality.
What belongs in a marketing budget?
Everything needed to get your offer in front of a customer, not just the money sent to ad platforms. In practice that is five line items:
- Media spend. Google, Meta, LinkedIn, sometimes offline.
- Content production. Video, photography, design, copy. The thing the ad actually shows.
- People. An in house marketer, an agency or freelancers. Your own hours count too.
- Tools. Email, scheduling, analytics, music and image licences.
- One off investments. Website, logo and branding, a library of your own photos. These spread across several years, so split them.
The most common mistake we see with new clients is a budget made of the first item only. Everything goes into ads, nothing is left for production, so the campaign promotes a phone snapshot and copy written late in the evening. The ad platform then faithfully delivers weak material to a large audience. It is the most expensive way to look bad. When we build a budget with a client, production gets its own line right next to media, not the leftovers at the end. It also helps to know what the items really cost, so we have written up what a corporate video costs and what social media management costs.
How should you split the budget between brand and performance?
According to the long running analyses by Les Binet and Peter Field for the UK IPA, the most effective split is roughly 60 percent brand building and 40 percent performance activity. Brand works slowly, but it protects your price and lowers the cost of acquiring a customer. Performance brings enquiries now.
Here we will disagree with applying that literally in a small company. If your monthly budget is two thousand euros and you need to make payroll, a 60 to 40 split in favour of brand can sink you before it starts working. With smaller clients we usually begin the other way round and lift the brand share as steady demand appears. What matters is that the brand share is never zero, because a company that runs performance only ends up buying the same customers at a higher price every year. How this fits into one direction is covered in our piece on building a one page marketing strategy.
How do you calculate a budget in ten minutes?
Bottom up, from the goal to the number of leads. It is more accurate than a percentage and it fits on one sheet of paper:
- How much extra revenue do you want to add this year?
- What is the average value of one deal?
- How many deals do you need? (step one divided by step two)
- How many leads do you need per closed deal? If you close every third one, that is three.
- What does one lead cost you? If you do not know, measure for a month before you plan.
Worked example: you want to add 100,000 euros in revenue, your average deal is 10,000 euros, so you need ten deals. You close every third enquiry, so you need thirty leads. If one lead costs 80 euros, campaigns need 2,400 euros. Add content production and the time of whoever runs it and you have a realistic budget. Then compare it against the percentage benchmark. If you land at three times the benchmark, either the goal is unrealistic or your channel is too expensive. For a wider view of the benchmarks by industry, HubSpot keeps a useful breakdown of marketing budget percentage of revenue.
When does a percentage of revenue stop working?
Whenever you have not yet proven that somebody wants the product. If you are still figuring out what you sell and to whom, a marketing budget is buying expensive silence. Spending a few hundred euros to talk to ten customers beats three thousand on a campaign.
It also fails with strong seasonality. A company that makes seventy percent of its revenue in two months cannot spread the budget evenly across twelve. And it fails on very thin margins, where five percent of revenue can be the entire annual profit.
One more admission you would not expect from an agency. If your calendar is full from referrals and you do not want to grow, a marketing budget will buy you nothing except the feeling of doing something. That money is better spent on delivery quality or on people. Marketing makes sense when you have the capacity to serve the demand it creates, which is where we usually start the conversation on our services page.
Frequently asked questions
How much should a company that is just starting spend on marketing?
A percentage of revenue makes no sense here, because revenue is near zero. Start from how many first customers you need and what one lead costs, and expect the first three months to be more expensive while campaigns learn who to show up for. A realistic minimum to have anything worth evaluating is a few hundred euros a month plus a content budget.
Does a new website belong in the marketing budget?
Yes, but spread it across years. A website that costs six thousand euros and lasts three years is two thousand a year in the budget, not a one off hole that eats your entire first half. The same goes for a logo and a photo shoot.
How often should I revisit the budget?
Once a quarter is enough. Moving money between channels every month looks active, but it never lets campaigns gather enough data for a decision. The exception is something visibly failing two months in a row.
Is it worth cutting marketing in a weak year?
Switching it off entirely is almost always a mistake, because the cost of coming back is higher than the saving. It is smarter to cut media spend and keep the content you produce yourselves. When the content disappears too, a year later you pay again for attention you already had.
If you are unsure whether your budget is split sensibly, send us the numbers and we will tell you honestly what we would move. No forty slide deck involved. Write to us through the contact form and we will get back to you within two working days.
