“How much should we be spending on marketing?”

It’s one of the questions we get asked the most by founders, CFOs, and even experienced marketers. Seems like it should have a simple answer. It doesn’t. But we’ll give you a smart one. There are some pretty solid benchmarks—and a lot of companies are falling short without realizing the impact it’s having on their growth.

The Common Rule of Thumb (and Why It’s Just a Starting Point)

Most experts—and most CFOs—will tell you to allocate 5–10% of gross revenue to marketing. If you’re aggressively going after market share or launching new offerings, you might need to spend more. Think 10–15% or even higher. More conservative businesses in established markets might slide under 5%. But that range is meaningless unless you factor in the full context:

• A SaaS startup trying to grow 3x in two years? 5% won’t cut it.
• A manufacturer with one sales channel and zero marketing infrastructure? 10% might be overkill, for now.
• A PE-backed company with aggressive EBITDA goals and market expansion on the table? Budget accordingly, or prepare to be outpaced.
  

In other words: the answer depends. But it really depends on what you’re trying to achieve.

Why This Matters More Than You Think

Too many businesses treat marketing like a cost center instead of a growth lever. And then they wonder why results are slow, leads are stale, and brand awareness is nonexistent. We saw this firsthand at a recent fractional CFO event in New Jersey. The marketing budget conversation came up, and the room nodded along like this was an unsolvable riddle.

But it’s not. In fact, we’ve been working with one client who was spending around 1% of their gross revenue on marketing. They’re in a highly competitive industry, trying to expand into new verticals, and wondering why they’re struggling to gain traction. Based on industry benchmarks and their growth goals, they should be closer to 7–10%. That delta? It’s not just theoretical, it’s showing up in their pipeline.

4 Core Factors That Should Guide Your Marketing Budget

If you’re trying to get this right, here’s what actually matters:

1. Your Business Stage

Startups and early-stage businesses typically need to spend more because they’re building everything from scratch: brand, audience, systems, reputation. Established companies can often rely more on their existing base. But if you’re aiming for innovation or market expansion, your spend should reflect that ambition.

2. Your Industry

Some sectors are just more marketing-intensive. B2C companies (especially in retail, CPG, and tech) often allocate a higher percentage to marketing because they rely on volume and visibility. In contrast, traditional B2B industries (manufacturing, logistics) may operate on smaller marketing spends, though even those types of businesses are starting to shift toward digital lead generation.

3. Your Growth Goals

Want to double revenue in 3 years? Launch into new markets? Shift your customer mix? All of those initiatives require investment, and not just in Google ads. You’ll need strategy, content, campaigns, analytics, tech, and the people to run it all. Growth takes fuel.

4. Your Competitive Landscape

If your competitors are showing up on every search result, speaking at conferences, and dominating LinkedIn—and you’re relying on word of mouth and one trade show a year—don’t be surprised when the market forgets you exist. In crowded industries, spend is survival.

The Real Marketing Spend Problem? Misaligned Expectations

One of the biggest disconnects we see is this:

• Leadership wants bold growth.
• The budget is stuck in maintenance mode.
• The marketing team is left trying to do magic with Monopoly money.
  

Sound familiar? Marketing works when it’s resourced to match the mandate. If your goals are ambitious, your spend has to be, too. If you’re being asked to “do more with less” every single quarter, eventually, you’re just doing less.

Benchmarking Approaches (and Why They’re Not All Equal)

Let’s look at a few budgeting methods we see in the wild:

Percentage of Revenue (Most Common, Most Sensible): The 5–10% model works well for companies with stable revenue and consistent goals. It’s scalable and adjusts with growth. But it only works if you actually spend that money strategically—not just on trade show booths and one print ad in the local journal.

Fixed Budget: This is common in earlier-stage companies or those with tight margins. The problem? They can get locked in based on what was spent last year rather than what’s needed this year. Marketing doesn’t exist in a vacuum; neither should your budget.

Goal-Based Budgeting (What We Recommend): Set the goals. Scope the strategy. Then cost it out. Back into a budget that aligns with what you want to achieve, and be honest about trade-offs. That’s how mature organizations make marketing decisions.

So  How Much Should You Be Spending?

Here’s a rough cheat sheet:

Don’t treat this like gospel, but do treat it like a gut check. If you’re sitting at 1–2% and wondering why results feel underwhelming, you’re probably under-investing. If you’re spending 10%+ and not seeing ROI, you may have an execution or strategy problem, not a budgeting one.

Budget ≠ Spend for Spending’s Sake

Marketing spend is more about aligning your business to your budget reality, not throwing money at vague goals. If you want clarity, accountability, and actual growth, you need:

• A clear strategy that ties spend to outcomes
• A team that knows how to prioritize and execute
• Visibility into what’s working and what’s not

Sometimes your marketing budget isn’t too small, it’s just poorly allocated. Before you fight for a bigger budget, make sure you can answer these questions:

1. What exactly is our current marketing spend producing?
2. Which channels are driving actual revenue (not just “engagement”)?
3. What would we do differently with 50% more budget?
4. What would we cut if we had 50% less?

If you can’t answer those questions clearly, you don’t need a bigger budget. You need a better strategy.

That’s the kind of thinking a fractional marketing team brings to the table. Budgeting is a data-driven, strategic decision—not a line item. So if you’re still stuck at “what should we spend?”, it might be time to talk to someone who knows how to answer the better question: “What do we need to invest to get where we want to go?”

We can help. Reach out to our team to discuss your needs and goals, or take our quiz to see if your business might need a fractional CMO to help you make these decisions.