Marketing Budget Planning: Where the Money Should Go
Most marketing budget plans start from last year and add a percentage. A better plan starts from the growth you need and the evidence for each channel.
Key takeaways
- Gartner found that marketing budgets fell to 7.7% of company revenue in 2024, down from 9.1% in 2023, and stayed flat in 2025.
- Build the marketing budget from the revenue goal backwards, not from last year forwards.
- Keep a test budget so you can learn without risking the core plan.
Budget season usually starts with last year’s spreadsheet. Then each line gets a small increase, and a few new ideas join the list. Finally, the total gets negotiated down. The result looks like a plan, but it mostly repeats last year’s choices.
That approach bleeds money slowly. Channels that stopped working keep their funding, while promising ones never get enough to prove themselves.
What the marketing budget data says
Budgets are also under pressure. Gartner’s 2024 CMO Spend Survey of 395 marketing leaders found that marketing budgets fell to 7.7% of company revenue, down from 9.1% in 2023, as Gartner reported in May 2024. Its 2025 survey found budgets flat at 7.7%, so the squeeze has not eased.
Benchmarks like this are useful context. Still, they should not set your number. A company launching into a new market needs a different budget than one defending a stable position.
Build the marketing budget from the goal backwards
- Start with the revenue target. How much new revenue does the business need from marketing next year?
- Convert it into customers. Divide the target by your average first-year customer value.
- Work back through the funnel. Use your real conversion rates to estimate the qualified leads and opportunities required.
- Cost each channel. Apply what each channel has actually cost per customer, not per lead.
- Add the long-term work. Fund brand building and content that will feed next year’s pipeline, even though it will not show results this quarter.
The first pass often produces a number nobody likes, because it exposes gaps. That is useful, because it forces a real conversation about growth targets, sales capacity and timing.
Split the budget into three pots
We suggest dividing the plan into three parts, so that each one is judged on fair terms.
- Core. Proven channels that produce customers at a known cost. Most of the money goes here.
- Brand. Work that builds memory and preference over time. Judge it on reach and brand measures, not next month’s leads.
- Test. A smaller pot for new channels and ideas, with a clear question and a stop date for each test.
The test pot matters more than its size suggests. Without it, the budget never learns, so next year’s plan will look just like this one.
Review it every quarter
A budget set once a year goes stale quickly. Markets shift, and some tests will succeed while others fail. For that reason, we recommend reviewing the plan every quarter.
At each review, move money from tests that missed their target into tests that worked. Also check whether the core channels still deliver customers at the expected cost. When they do not, find out why before you add more spend.
Questions to ask before you sign off
- Which line items have no measure of success attached?
- Which channels are funded because of habit rather than results?
- Does sales have the capacity to handle the leads this plan expects?
- What will we cut first if revenue falls short in the first half?
A budget built this way is easier to defend, because every number traces back to a goal. It is also easier to adjust, since you know which assumptions each line depends on.
If you are planning next year’s marketing budget, our marketing audit guide shows how to find out what each channel really returns. For an outside review of your plan, book a free diagnosis.
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