How to Set a Marketing Budget

𝐇𝐨𝐰 𝐌𝐮𝐜𝐡 𝐒𝐡𝐨𝐮𝐥𝐝 𝐘𝐨𝐮 𝐒𝐩𝐞𝐧𝐝 𝐨𝐧 𝐌𝐚𝐫𝐤𝐞𝐭𝐢𝐧𝐠? 

It’s a question that comes up every year: How much should I budget for marketing? Along with the sister-question: How do I keep from overspending in marketing?

The answer isn’t just about picking a number—it’s about building a marketing strategy that supports your business goals. Too often, businesses feel like they’re overspending on marketing, but when you look, they’re missing a clear vision, business strategy, or sales objectives. These are the building blocks that guide your marketing spend and ensure it’s working toward your goals.

Here’s a simple framework to help you figure it out:

1️⃣𝐒𝐭𝐚𝐫𝐭 𝐰𝐢𝐭𝐡 𝐓𝐡𝐫𝐞𝐞 𝐐𝐮𝐞𝐬𝐭𝐢𝐨𝐧𝐬: 

1 - What are your business objectives for the year? 2  - How aggressive do you want to be? 3 - How aggressive are your competitors?

💡 For example, if you are a B2B electronic component manufacturer with $5M in revenue, you might find that 5-7% of revenue is a typical marketing spend. But if you’re launching a new product or entering a competitive market, you may need to lean toward the higher end of that range. 

2️⃣ 𝐋𝐨𝐨𝐤 𝐚𝐭 𝐈𝐧𝐝𝐮𝐬𝐭𝐫𝐲 𝐁𝐞𝐧𝐜𝐡𝐦𝐚𝐫𝐤𝐬: 

Research what percentage of revenue businesses in your industry typically spend on marketing. For example, some markets spend less or more than manufacturing, technology, or B2B services. I'm a big fan of the CMO Survey here: https://cmosurvey.org/ 

3️⃣𝐌𝐚𝐩 𝐌𝐚𝐫𝐤𝐞𝐭𝐢𝐧𝐠 𝐭𝐨 𝐒𝐚𝐥𝐞𝐬 𝐆𝐨𝐚𝐥𝐬: 

Think about what you’ll need to support your sales objectives. Will it be a new website, email automation, digital ads, graphic design, a podcast, a tool, a fractional marketing position, or something else? Estimate the costs and compare them to the industry benchmarks you found earlier.

4️⃣ 𝐄𝐯𝐚𝐥𝐮𝐚𝐭𝐞 𝐒𝐩𝐞𝐧𝐝 𝐂𝐚𝐭𝐞𝐠𝐨𝐫𝐢𝐞𝐬: 

Break your budget into categories (e.g., digital media, technology, events, labor, etc.) and compare it to best practices. Are you overspending in one area and underspending in another? Use tools like Google Sheets to track spending by category and compare actual spending to budgeted spending.

Establish a marketing budget based on your goals, industry trends, and sales strategies. It takes some effort, but it’s worth it to avoid overspending or underspending—and to make sure your marketing dollars are driving results. 

Once your budget is set, track it monthly. Remember to strive to hit your budget number, and keep track of reasons why you are higher/lower so that you can evaluate for next year's budgeting process. 

If you’re looking for more resources, let us know. We are happy to help you establish a marketing foundation for your 2026 success. 

Let me know if I can assist you!