Plan a Marketing Budget: How to Allocate Spend for ROI & Growth

Smart marketing decisions play a major role in business growth. When you plan your marketing budget with clear goals in mind, you create opportunities to reach new customers and expand market share while making sure you allocate resources effectively.

In this guide, I'll walk you through the step-by-step process of marketing budget planning. Learn how to develop your budget, what to include, and how often to revisit your plan to keep your spending and results on track.

Key takeaways:

• A marketing budget breakdown should include all channels and activities your business plans to implement along with software costs and team salaries.
• The amount your business should spend on marketing depends on factors like company growth stage, competitive landscape, and overall goals.
• By developing a marketing budget template, your team can easily allocate spend, analyze results, and update your plan every quarter.

Why your business needs a marketing budget

From startups to small businesses to mature enterprises, every business needs a budget for marketing. When you have a plan for what to spend, your marketing team can successfully manage the following.

Keep marketing efforts on track

A budget acts as a roadmap for your organization's marketing activities. When you set goals for specific marketing channels or campaigns, apply relevant spending limits.

This way you'll know exactly what to spend on everything from email marketing to search engine optimization (SEO) without having to make decisions in the moment. And you can avoid spending too much in one area while neglecting others — which can cause you to miss campaign goals.

Allocate resources more efficiently

With smart budgeting, you know exactly where your marketing spend goes and what results it brings. When you track spending against metrics like leads or sales, you can easily calculate return on investment (ROI).

These insights reveal which channels and campaigns work best for your business. You can then make data-driven decisions about resource allocation. For example, you can shift marketing resources away from underperforming areas and invest in what's actually driving growth.

Support long-term growth goals

Monitoring your marketing costs and spending helps you achieve much more than just monthly or quarterly goals. It also connects your marketing initiatives to a broader business vision.

Over time, a well-planned marketing budget helps you meet goals consistently and work toward long-term goals. As a result, a budget sets the foundation for large-scale revenue growth and market share expansion.

How much should your team spend on marketing?

There's no magic number or percentage of revenue that every business should spend on marketing. To understand how much to allocate, consider these factors:

• Business goals: Ambitious objectives like expanding into new markets or launching new products often drives higher marketing spend.
• Growth stage: Early-stage startups or companies pursuing rapid growth often spend a higher percentage of overall budget or revenue on marketing.
• Sales cycle: B2B companies with longer sales cycles often have to budget accordingly, allocating a larger percentage of revenue to marketing.
• Competitive landscape: Businesses in highly competitive industries or categories typically have to spend more to stand out and meet goals.
• Market conditions: The economic environment and market trends can both affect budget. An economic downturn may lead to budget cuts.

Essential marketing expenses to include in your budget

The most effective marketing budget examples break down expenses by category. Here's what goes into an average marketing budget.

Content marketing

Most B2B marketing strategies use high-quality content to improve brand awareness, generate leads, and drive conversions. Content includes everything from blog posts and social media posts to podcasts and video marketing.

Because content is critical for so many digital marketing channels, many organizations allocate 20-30% of their marketing budgets to content. And many expect their content budgets to increase in the next year.

Event marketing

Event marketing includes all the in-person, hybrid, and virtual events your organization runs or attends to connect with potential customers who fit your ideal customer profile (ICP). It can include webinars, conferences and trade shows, and exclusive customer events.

Generally, organizations allocate 10-20% of their marketing budgets to events. This event marketing budget includes everything from speaker fees to venue rental costs.

Paid advertising

To supplement organic marketing efforts, most organizations invest in digital ads. Between pay-per-click ads, paid social media, and sponsorships, advertising helps organizations accelerate customer acquisition.

On average, B2B businesses allocate 10-30% of their digital marketing budget on ads. This amount includes ad spend only, not ad management software.

Branding and creative

Strong branding makes B2B companies stand out in a crowded market. On average, organizations allocate 5-10% to branding and creative, which includes messaging frameworks, visual identity templates, and digital media production.

Analytics and market research

Data-driven decisions help prevent expensive marketing mistakes. Generally, businesses allocate 5-10% to analytics, attribution modeling, and market research.

Staff and contractor salaries

People power your marketing efforts, providing your organization with the right mix of skills and strategy. As a result, employee salaries and contractor fees are an essential part of any B2B marketing budget.

Most B2B businesses allocate 15-20% of their marketing budget to talent. And 39% of CMOs say they want to spend less on labor in the future by reducing headcount and eliminating overlapping roles.

Marketing tools and software

From webinar marketing to influencer marketing, many channels and campaigns require dedicated technology. Most organizations spend 5-10% on software and apps — including customer relationship management (CRM) tools, project management systems, demand generation tools, and specialized marketing campaign platforms.

How to develop your marketing budget

To create a marketing budget, you need the right data, research, and analysis. I'll break down the process to develop an example marketing budget that you can turn into a reusable template for your team.

1. Review your marketing strategy and goals

Before you allocate a single euro, meet with your team to review your organization's marketing strategy and goals. For the next quarter, will you focus on brand awareness, lead generation, customer retention, or a goal related to another stage of the buyer's journey?

Your budget should support your team's priorities. For example, if your main goal is to expand market share, you may need to invest more in market research and analytics.

2. Audit your current marketing spend

Then, review your current budget. Break down each expense category, including channels, technology, and staff.

Record everything in a budget spreadsheet so you can easily track fixed costs and variable expenses. Look for excessive or insufficient spending that doesn't align with current business goals.

3. Analyze your marketing metrics

Go over performance data from recent campaigns. Analyze metrics like customer acquisition cost (CAC), conversion rate, and ROI. Flag the channels or campaigns that perform best and drive the highest return.

Identify areas where performance data supports spending more of your budget. Look for opportunities to shift spend away from low-performing campaigns or channels.

4. Evaluate revenue forecasts

To avoid making unrealistic budget decisions, check your company's revenue forecast for the upcoming quarter. Plan a meeting between marketing and finance to get everyone on the same page.

Consider trends over time and factor them into your budget. For example, if revenue is projected to decrease due to market or economic conditions, using last quarter's total budget could cause you to overspend on marketing.

5. Do competitive research

Your marketing budget should largely depend on your company's goals and revenue. However, it's also helpful to consider where the competition is spending and how their digital marketing plans are changing.

Use competitive analysis tools to analyze their marketing channels and estimate their budgets. Pay attention to whether your top competitors are adopting new channels or investing more in existing campaigns.

6. Decide on marketing budget allocation

Once you've finished your research, distribute your budget across the channels and initiatives you identified. Plan to dedicate certain percentages to what you already know works, what looks promising, and what you want to test.

B2B businesses typically plan 70% for proven tactics, 20% for emerging channels, and 10% to experimental approaches. This way, you have a plan to meet your goals while exploring new opportunities.

7. Revisit your budget quarterly

Your marketing budget outlines how much to spend on different marketing channels and activities for a specific time frame. But it isn't a static document, and your budget shouldn't necessarily be the same for every time period.

Take time to review your budget every quarter and find opportunities for improvement. Meet in person or use online meeting software to analyze your budget as a team. Identify areas to shift spend to or from, and aim to continuously optimize your marketing budget.

Frequently asked questions about marketing budgets

What is a marketing budget?

A marketing budget is a financial plan that details how much money a company will spend and on which marketing activities over a set time period, often a quarter or a year. It helps you decide how to spend your budget and make informed decisions about where to make marketing investments.

What should be in a marketing budget?

A marketing budget should include all expenses related to your promotional efforts. To manage your marketing spend effectively, include:

• Content for email, video, content, and social media marketing
• Event marketing
• Branding and creative
• Digital advertising
• Market research and analytics
• Talent salaries and fees
• Software and apps

What is the 70/20/10 rule for marketing budgets?

The 70/20/10 rule is a framework that helps marketers balance proven tactics with innovation:

• 70% goes to core marketing activities and channels with proven records of success.
• 20% goes to emerging opportunities and digital channels that aren't proven yet.
• 10% goes to experiments and testing, giving you new ideas for your digital marketing strategy.