“Stopping marketing to save money is like stopping your watch to save time.” Sounds familiar, right? This old saying couldn’t be more relevant in today’s unpredictable business world. With markets shifting and economic challenges popping up, CEOs and executives are often left wondering: How much should we spend on marketing? It’s a tough question, and the answer depends on your goals, industry, and what’s happening around you. But here’s the bottom line—marketing isn’t just an expense; it’s an investment in your company’s growth and future.
It’s tempting to cut back on marketing when times get tough—after all, it seems like an easy way to save money, right? But research shows that’s not the smartest move. In fact, studies (like one from McGraw Hill) found that businesses that kept or even increased their advertising during a recession saw a whopping 256% higher sales growth afterward compared to those that didn’t.
The truth is, your marketing budget isn’t optional. Whether business is booming or you’re tightening the purse strings, marketing is what keeps customers aware of your brand, builds recognition, and brings in new customers. The key is figuring out a strategy that works for your unique spot in the market.
Not all marketing budgets are created equal, and there are different factors that demand different approaches. Let’s break it down:
If your business is doing well and operating in a stable market, a good rule of thumb is to spend about 7–10% of your gross revenue on marketing. This is backed by advice from Deloitte and the U.S. Small Business Administration.
Even if you’re in a strong position, it’s important to know exactly where your marketing dollars are going. For established companies, focusing on keeping customers is just as important as finding new ones. Are you using tools like email automation, loyalty programs, or creating personalized customer experiences? These are the strategies that tend to deliver the best ROI.
Startups often need to spend big to grab market share fast—usually around 15–20% of revenue, depending on their industry and goals. According to First Round Capital, startups that focus on smart, strategic marketing early on tend to pull ahead of the competition.
For startups, every dollar counts. Early on, focusing on paid social media, paid search (PPC), and content marketing is a good idea. These channels are scalable and trackable, giving you solid ROI to grow quickly.
When the market gets shaky, cutting your marketing budget might feel like the easy choice. After all, it seems less painful than layoffs or trimming operations. But here’s the thing – tough times are actually the best moments to step up your game. Harvard Business Review even says there’s opportunity in the chaos. Staying visible while your competitors go quiet can give you a huge advantage.
Does that mean throwing money at every marketing channel? Definitely not. The smart move is to focus on what works – like high-performing digital ads, engaging email campaigns, and create a positive customer experience. These strategies connect you with people already looking for what you offer, making sure every dollar counts.
The 70-20-10 rule is a simple and effective way to split your marketing budget. It’s all about balancing what works, exploring new opportunities, and testing bold ideas. Here’s how you can use it:
Figuring out your marketing budget starts with getting clear on your business goals and backing your strategy with data. Are you looking to boost brand awareness, launch a new product, or build long-term customer loyalty? Each goal calls for a different approach to spending.
Here’s an interesting stat: according to Gartner’s 2023 CMO Spend Survey, marketing budgets average 9.5% of company revenue across industries. But tech companies? They’re spending more—around 13%. This is a great reminder that benchmarks vary by industry, so use this as a guide to plan your budget and stay competitive in your space!
Source: Gartner’s 2023 CMO Spend Survey
It’s easy to think of marketing as just another expense, but it’s so much more than that. Marketing brings in leads, drives conversions, and fuels long-term growth—time to shift your perspective!
People’s attention is all over the place these days—TikTok, AI-powered recommendations, you name it. If you’re not putting enough effort into adapting to growing trends, you’re missing out big time.
Sure, performance marketing gets quick results, but don’t forget the long game. Investing in things like content creation and SEO can build a brand that lasts.
At the end of the day, your marketing budget shows how serious you are about growing, innovating, and staying resilient. The businesses that invest smartly build stronger customer relationships and gain an edge over their competition.
Curious if your current strategy is on the right track? Grab our free Marketing Budget Evaluation Toolkit or reach out for a strategy session—we’re here to help.
Sure, marketing doesn’t come with guarantees, but not investing in it? That’s a guaranteed way to fall behind. The choice is yours—invest wisely or get left in the dust.
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