Let’s talk about your marketing budget. Or that thing you might currently call “whatever’s left over after everything else.”

Here’s the truth: marketing isn’t an expense, it’s an investment. And like any good investment, it needs proper planning.

The Revenue Rule: Your Starting Point

Most thriving businesses allocate 5-10% of their total revenue to marketing.

  • Established businesses in steady markets? 5-7% keeps you visible.
  • Growing businesses chasing targets? 7-10% gives you fuel to accelerate.
  • New businesses building from scratch? 10-20% initially to make noise.

Yes, that last number might make you wince. But marketing is how customers discover you exist.

Set Clear Marketing Goals

Before you commit a single pound, get crystal clear on your goals. “More sales” doesn’t count.

Try these instead:

  • Increase website traffic by 40% in six months
  • Launch two new products reaching 50,000 potential customers
  • Achieve 25% brand awareness in a new market by year-end
  • Boost customer retention by 15% through email marketing

Specific goals help you calculate what you need to spend and measure whether it’s working.

Check Your Competition

Look at your competitors’ marketing efforts:

  • Are they running ads constantly or barely visible online?
  • What’s their content strategy like?
  • How are they positioning themselves?

If your competitors are investing heavily and you’re playing it safe, you’re bringing a butter knife to a sword fight.

That doesn’t mean spending more automatically wins. It means being strategic about where you compete.

Industry Budget Benchmarks

Here’s what businesses typically invest:

  • Retail & E-commerce: 7-12%
  • B2B Services: 5-8%
  • Healthcare & Professional Services: 3-7%
  • Technology & SaaS: 10-20%
  • Hospitality & Tourism: 5-10%

These are guidelines, not gospel. Your specific needs may vary.

What Should Your Marketing Budget Cover?

Digital Marketing (40-60% of budget)

  • Paid advertising (Google, social media)
  • SEO and content creation
  • Email marketing platforms
  • Website maintenance

Brand & Creative (15-25%)

  • Graphic design and video production
  • Photography and copywriting

Marketing Tools (10-20%)

  • CRM systems
  • Analytics platforms
  • Social media management tools

Traditional Marketing (varies)

  • Print advertising
  • Events and trade shows
  • PR and media relations

Agency or Team Costs

  • Retainer fees or project costs

Key Factors That Affect Your Budget

Your perfect marketing budget depends on:

Your Growth Stage: Launching, growing, or maintaining? Each phase demands different investment.

Your Sales Cycle: Long sales cycles need brand building. Quick purchases? Focus on performance marketing.

Your Profit Margins: Higher margins allow more spending per customer acquisition.

Your Market Position: Challenger brands need to shout louder than established leaders.

Seasonal Factors: If you make 60% of revenue in December, your marketing calendar should reflect that.

Making Your Budget Work Harder

You don’t need a massive budget to make an impact. You need smart allocation:

  1. Start with what works: Audit last year’s efforts. Double down on what delivered results.
  2. Test before you invest: Pilot campaigns with smaller budgets first.
  3. Track everything: If you can’t measure it, you can’t improve it.
  4. Build flexibility: Reserve 10-15% for opportunities and experiments.
  5. Think long-term: Balance quick wins with sustained efforts that compound over time.

When to Spend More

Sometimes you need to increase your marketing budget:

  • Launching a new business or product
  • Entering a new market
  • Competing against a market threat
  • Seizing a time-sensitive opportunity

When You Can Spend Less

You might reduce marketing spend when:

  • You’ve got incredible word-of-mouth going
  • Your retention rates are sky-high
  • You’re in a niche market with low competition
  • You’re capacity-constrained

The Bottom Line

Your marketing budget should feel like a stretch, but not a panic. Start with the percentages we’ve discussed, adjust for your circumstances, and commit for at least six months.

Marketing isn’t a tap you turn on and off. It’s like growing a garden—consistent care yields the best results.

Not sure where to start? That’s what we’re here for.

Ready to make your marketing budget deliver results? Get in touch for a no-obligation strategy session.