A marketing budget is the money a company sets aside for the people, media, tools and content that bring in customers. Most of the argument about the right size disappears once the budget is built from a goal instead of copied from an average.
This article is part of our strategy guides. For the measurement side, read how to measure marketing performance and how to measure digital marketing ROI.
Why is there no single right marketing budget?
A software company selling to enterprises, a regional manufacturer and a direct-to-consumer brand all "spend on marketing", and the right share of revenue for each is different. The software company carries high margins and long sales cycles, the manufacturer sells to a few hundred buyers through relationships, and the consumer brand lives or dies by acquisition cost. An average across all three tells none of them what to do.
That is why the useful question is not "what do companies spend?" but "what does my company need marketing to produce, and what does that cost?" The surveys below still matter: they tell you whether your answer is in the normal range or an outlier you should be able to explain.
What do published surveys say companies spend on marketing?
The most cited source is The CMO Survey, run from Duke University's Fuqua School of Business. Its 35th edition, published 31 March 2026, surveyed 308 marketing leaders at for-profit US companies (97% at vice-president level or above) and found marketing spending at 9.0% of company revenues and 9.6% of the overall company budget. The survey's own headline was that marketing is contracting under economic pressure, so the figure is an average in a tight year and carries no recommendation.
For a simpler rule of thumb, BDC, Canada's business development bank, says in its guide How much should you spend on marketing (updated 1 August 2023) that B2B companies commonly spend between 2 and 5% of revenue on marketing, and B2C companies often spend more, between 5 and 10%. The table below sets the figures side by side with their bases and dates. They are market estimates from the sources named, read on 8 November 2026, not our prices or our advice for your company.
Three ways to set a marketing budget
Companies arrive at a number by one of three routes. The third is the one we recommend, checked against the first two.
1. Percentage of revenue
The simplest method: pick a share of last year's or this year's expected revenue and spend it. It is quick, it scales with the business, and finance understands it. Its weakness is that it has nothing to do with what you need: a company that must double its pipeline next year and a company defending a mature position get the same percentage. Use it as the boundary check, with the survey figures above as the range.
2. Competitive parity
Spend about what competitors of your size spend, estimated from their visible activity, hiring and media presence. It keeps you from being drowned out, but it copies other people's mistakes, you never know their real numbers, and it ignores whether your product, margins or sales model are different. Use it to understand the noise level in your market; set the figure from your own arithmetic.
3. Goal-based budgeting (objective and task)
Start from the revenue the company needs from new customers, work back to the number of customers, then to the qualified leads your close rate implies, then to the cost of producing those leads by channel at the rates you have seen in your own accounts. Add the people, tools and content needed to run those channels. The total is the budget; the goal justifies it.
This method takes longer and it needs data you may not have in year one. Where you lack a conversion rate or a cost per lead, use a conservative estimate, label it, and replace it with a real figure after one quarter. Our guide to measuring marketing performance explains how to collect those numbers.
How should a company split its marketing budget?
Before channels, split the money three ways, then two ways:
- People, media and tools. Salaries or agency fees, the media and ad spend itself, and the software and data you run on. A budget that is all media and no people produces campaigns nobody improves; one that is all people and no media produces plans nobody sees.
- Brand and demand. Demand work (search, paid, email, conversion) produces leads you can count this quarter. Brand work (content, PR, design, community) makes the demand work cheaper next year. Companies that cut all brand spend in a tight year pay for it in higher acquisition costs later.
- Then channels. Put the demand money where your buyers already look: search for problem-aware buyers, LinkedIn and events for B2B committees, social and marketplaces for consumer products. Fund two or three channels well; six funded thinly all underperform.
For a small business the split is simpler and mostly time rather than money; our guide to digital marketing strategies for small businesses covers it. For the SEO line specifically, our guide to SEO agency pricing sets out the published ranges.
What changes the number?
Five things move a company's right budget away from the average:
- B2B or B2C. B2B companies sell to fewer, slower buyers and often spend a lower share of revenue; BDC's rule of thumb is 2 to 5% against 5 to 10% for consumer businesses.
- Growth stage. A company entering a market or launching a product spends more than its share for a time, because it is buying awareness it does not yet have. A mature company defending share spends less.
- Margins. High gross margins can carry a larger acquisition cost; thin margins cannot. The contribution each sale leaves after product, delivery and acquisition cost is the real constraint.
- Competition and category. A crowded category with expensive keywords and busy feeds costs more to be heard in than a niche one.
- Sales model. A company with a strong referral or distributor network needs marketing to support those channels without replacing them, and the budget reflects it. Manufacturers are the classic case; see how we plan marketing for manufacturers.
A worked example
An illustration, not a benchmark. A B2B services company with $5 million in revenue wants $1 million of new annual revenue next year from new clients. Its average new client is worth $50,000 a year, so it needs 20 new clients. It closes one in four qualified opportunities, so it needs 80 qualified opportunities, and one in three marketing-qualified leads becomes an opportunity, so it needs 240 qualified leads. From its own accounts, a qualified lead has cost about $400 across search, LinkedIn and content, so lead generation needs about $96,000. Add one marketing manager, an agency or freelancers for content and paid media, and tools, and the total might land near $300,000, or 6% of revenue.
Checked against the surveys: inside BDC's B2B rule of thumb at the upper end, below The CMO Survey average. The company can defend the number because every line traces to the goal. If it had copied the 9.0% average it would have spent $450,000 with no idea what the extra $150,000 was for.
When should a company spend more, or less, than the range?
Spend above the range when you are launching, entering a new market, or have a measured channel with capacity: if every extra dollar in search still returns a qualified lead at an acceptable cost, the budget is too small. Spend below it when the sales team cannot handle more leads, when the product or the website converts poorly (fix that first), or when the money is going to activity you cannot measure.
Treat the first year of any new channel as a test with a budget you can afford to lose, and judge it on the right window. Google's starter guide says to [wait a few weeks before judging an SEO change, and that some changes take months]({STARTER}); paid media moves faster. A budget review that compares a three-month-old SEO program with a three-month-old ad campaign on the same terms will cut the wrong one.
How to review the marketing budget
Review quarterly against outcomes. For each channel: what it cost, the qualified leads and pipeline it produced, and the cost per qualified lead against last quarter and against the plan. Move money toward channels that still return at an acceptable cost and have room to grow; hold channels that are learning; cut activity that produces nothing countable after a fair window. Keep one line for tests. Our guides on measuring marketing performance and measuring digital marketing ROI give the method and the sum.
Conclusion
How much a company should spend on marketing is a question the company answers for itself, from the growth it needs and the cost of producing it, and then checks against the published range: 9.0% of revenue on average in The CMO Survey's March 2026 edition, and BDC's rule of thumb of 2 to 5% for B2B and 5 to 10% for B2C. Build the number from the goal, split it deliberately, review it against pipeline, and be able to explain why it sits where it does.
PromotEdge International is an international strategy, technology, marketing and design company, and our delivery team is in India. Our marketing strategy consulting builds the goal, the budget and the reporting together, within our wider strategy practice. We publish no rate card; each client gets a scope with named deliverables and a fee for each.
Facts we rely on: see our company facts for what we state about ourselves and where each fact comes from.