Marketing Budget as a Percentage of Revenue: A Reality Check

Across industries, companies spend roughly 7% to 10% of revenue on marketing: Gartner’s 2025 CMO Spend Survey reports 7.7%, while The CMO Survey put the figure at 9.4% in spring 2025, according to Gartner (2025) and The CMO Survey (2025). Those are useful reference points. They are also averages that describe almost no real company.

The reason is simple. Marketing budget as a percentage of revenue ignores the three things that actually set your number: your stage, your margin and your business model. A pre-revenue software firm and a fifty-year-old manufacturer can both be run well while spending five times apart. The average sits between them and fits neither.

So this article does two things. It gives you the benchmarks you came for, sourced and dated. Then it explains why the percentage is a weak anchor, and what to build your budget on instead. One scope note first: every figure below is the total marketing budget, salaries and technology included, not just media spend.

What percentage of revenue should you spend on marketing?

Somewhere between 7% and 10%, if you insist on a single band. The two most cited US benchmarks disagree by roughly two points, and the disagreement is itself informative.

Gartner’s 7.7% held flat for a second year and is down from 9.5% just three years earlier, per Gartner (2025). The same survey notes that half of CMOs report budgets of 6% or less, so the average is pulled up by heavy spenders. The CMO Survey’s 9.4% is higher partly because its sample is broader, while Gartner leans heavily on companies above $1 billion in revenue.

Two lessons before you write anything down. First, the headline number moves with the economy, from 9.5% to 7.7% in three years, so it is a barometer, not a rule. Second, when the two most-cited surveys land two points apart on the same question, no single percentage deserves to be a target.

Why the percentage of revenue is a weak starting point

Because an average is built to blur exactly the differences that should drive your budget. The point is not ours. It comes from the people who run The CMO Survey. Writing in MIT Sloan Management Review (2023), they state plainly that “an average marketing budget can be highly misleading for planning purposes.”

Their argument is worth keeping in front of you at budget time. CMOs whose spend sits below the average lobby to increase it, while those above it get told to cut, as if the mean were a law of nature. It is not. The same average folds together B2C giants and niche B2B firms, cash-burning startups and profitable incumbents. Anchoring on it imports someone else’s stage and model into your plan by accident.

There is a distribution behind every average, and here it is wide. Gartner’s own “half at 6% or less” means the 7.7% headline already sits above the typical company. Chasing the average, in other words, quietly points you at the upper half of the market without telling you so.

B2B versus B2C: the gap the average hides

This is the first cut that matters, and it is large. B2B firms spend materially less of their revenue on marketing than B2C firms, because they sell to a few hundred accounts rather than a mass audience.

The single-point figures come from The CMO Survey’s spring 2025 wave, reported by Sword and the Script (2025); the longer-run B2B and B2C averages are published by The CMO Survey’s authors in MIT Sloan Management Review (2023). B2C product companies spend well over twice what B2B product companies do. If you run a B2B business and you benchmark against a blended cross-industry average, you have already overstated your own likely number by importing consumer economics that do not apply to you.

How much should a small business spend on marketing?

The most repeated answer is 7% to 8% of gross revenue for firms under $5 million, a guideline commonly attributed to the U.S. Small Business Administration and reported by Crestmont Capital (2026). Worth a caveat, because the attribution is shakier than the confidence with which it circulates: the SBA’s own page on marketing budgets says plainly that “there’s no hard and fast answer” and cites an average advertising spend of 1.08% of revenue. Advertising is only a slice of a marketing budget, which also carries salaries, tools and events, so the two figures are not in conflict. But treat the 7% to 8% as a repeated rule of thumb, not a number the SBA prescribes. Two conditions travel with it and rarely get quoted alongside the headline.

The first is margin. The 7% to 8% rule of thumb assumes healthy net margins, in the region of 10% to 12% or better. If your margin is thinner, that spend starves operations, and the rule itself points you lower. The second is ambition: businesses chasing aggressive growth routinely push to 10% to 12% or higher. If you want to size an advertising budget specifically, rather than the whole marketing line, we work through it in our guide to the small business advertising budget.

Notice what has happened. A single “small business” rule has already fractured into a range that depends on your margin and your growth goal. That is the recurring pattern of this whole topic. Every time you narrow the benchmark to your situation, the percentage stops behaving like a target and starts behaving like an output of decisions you have not made yet.

Early-stage versus mature: stage moves the number more than industry

Here is the cut that dwarfs the rest. A company’s stage swings its marketing ratio far more than its sector does, and this is where the percentage of revenue is most dangerous to copy.

Software makes the pattern vivid because its economics reward early spending. Early-stage and venture-backed SaaS companies commonly run 15% to 30% of ARR on marketing, while mature SaaS settles back to 5% to 7%, according to Directive (2026). Recurring revenue justifies a higher acquisition bill up front, because the lifetime value of a retained customer pays it back later.

The cleanest proof that the ratio is not a property of your industry comes from funding. Equity-backed B2B SaaS firms spend 100% more on marketing than bootstrapped firms of comparable size, per SaaS Capital (2026), drawn from a March 2026 survey of over 1,000 private companies. Two firms in the same business, at the same revenue, spend double or half depending on whether they are chasing growth or protecting cash. The same survey puts the median marketing spend at 8% of ARR, with sales at 15% and the two combined at 23%. Your ambition sets your ratio, not the other way round.

What to anchor on instead of a percentage

Build the budget bottom-up from commercial goals, then let the percentage of revenue check your work rather than set it. The method is four questions, and every one is answered with your own numbers.

1. How many new customers must you sign next year? Start from your revenue goal, strip out recurring revenue and churn, and divide by your average deal size.
2. What does it cost to acquire one customer today? That is your CAC. If you are not sure how to compute it cleanly, work through how to calculate CAC first, because every figure downstream depends on it.
3. What is a customer worth over their lifetime? That is LTV, and its ratio to CAC tells you how hard you can safely invest. We compare the metrics that should steer this in ROAS, MER, CAC or LTV: which to track.
4. How long is your payback period? A six-month sales cycle means budget spent in Q1 only returns revenue in Q3, so cash flow, not a ratio, caps your first-year spend.

This approach exposes the biggest line most B2B firms underweight: people. Salaries are usually the largest slice of a total marketing budget, which makes build-versus-buy the first real decision, not the ad plan. We work through that trade-off in in-house versus agency B2B marketing, and the way costs balloon when the work is scattered across suppliers in the hidden cost of multiple agencies.

The bottom-up method has one honest drawback: it demands numbers many firms have not measured yet. If you do not know your CAC or your conversion rate, spend a quarter measuring them. In exchange it gives you something a percentage never will, a budget you can defend line by line in a leadership meeting. “We spend 8% because that is the average” ends the conversation. “We must sign forty customers, our CAC is X, so we need Y” starts a real one.

In short

• Treat 7% to 10% as a band, not a target. Gartner reports 7.7% of revenue and The CMO Survey 9.4%, and half of CMOs sit at 6% or less, so the average already leans high.
• Your stage and model outweigh any cross-industry average. B2B product firms spend 6.4% while B2C product firms spend 15.5%, and early-stage SaaS runs 15% to 30% of ARR against 5% to 7% at maturity.
• Anchor on customers, CAC, LTV and payback, then use the percentage only to sanity-check. Equity-backed firms spend 100% more than bootstrapped peers of the same size, which proves the ratio follows your ambition, not your sector.

This is how we frame budgets in our B2B growth firm work: start from your commercial goals and real acquisition costs, then refuse the benchmarks the data does not support. If you are shaping next year’s budget and want to test your assumptions against ours, book a diagnostic.