I have been through enough annual planning cycles to know how marketing budgets get set. There is a number from last year. Finance has a view on what the business can afford this year. Revenue is expected to grow, so marketing gets a small increase. Margins are under pressure, so every function is asked to find savings. Some years the instruction is simply to hold the budget flat and deliver more. By the time the marketing team starts planning, one of the biggest strategic decisions has already been made.
Think about the sequence. The amount available to marketing has been fixed before the business has worked through what it needs marketing to achieve. The company might be entering a new market, launching a product, facing a far more aggressive competitor, trying to establish a category, or reversing a decline in consideration. The growth ambition might be materially higher than last year’s. Whatever has changed in the market, the starting point is usually the same: here is the number, now build a plan that fits inside it.
This is so normal inside large organisations that we rarely question the logic. When marketing does push back, a familiar question follows: “Well, what should we be spending?” That is when the benchmarks come out. Gartner says marketing budgets averaged 7.8 per cent of company revenue in 2026. The latest CMO Survey puts the figure at 9.0 per cent. Both are credible pieces of research. Neither can tell you what your marketing budget should be. Neither can last year’s spreadsheet.
This is not an essay about how much to spend. It is an essay about the order in which the decision gets made, because the order is where the damage is done.
When the budget is set before the strategy, the envelope has already made the strategic choices.
We have become very comfortable starting with the number
Marketing budget conversations have an anchor. Sometimes it is last year’s spend, sometimes a percentage of revenue, sometimes an industry benchmark. Often finance has already sized the pool and marketing is asked to work within it. The logic is understandable. Companies have finite resources, and marketing competes with product, sales, operations and technology for investment. A CMO cannot arrive at the CFO’s office with a wish list and expect it to be funded. Financial discipline matters, and marketers should be accountable for how they invest the company’s money.
The problem starts when the constraint substitutes for the strategy. Last year’s budget tells you what the business spent last year. A benchmark tells you what other companies spend. Neither tells you what needs to happen in your market this year. Yet both carry enormous influence because they feel objective. A budget set at 8 per cent of revenue has a reassuring logic. It can be compared with an external study, placed on a board slide and defended as broadly in line with the market.
The average, however, has no idea what you are trying to achieve. A category leader defending its position does not face the same task as a challenger trying to double its share. A business entering Japan for the first time is not in the position of one that has traded there for thirty years. A company with high awareness and weak conversion has a different problem from a company nobody has heard of. Two B2B software firms of similar size can have completely different brand strength, market maturity, sales coverage, pricing power, existing demand and competitive intensity. Put them all into a benchmark and that context disappears. What remains is a precise-looking average that may have very little to do with the decision in front of you.
There is a further reason to handle the number carefully. Gartner’s CMO Spend Survey represents one cohort of companies and marketing leaders. The CMO Survey represents another. Their methodologies, company mixes and definitions differ, which is one reason their headline figures do. That does not make either benchmark wrong. It is a reminder that a benchmark describes the organisations in the study. It does not prescribe what every company should spend.
A benchmark describes other people’s decisions. It cannot make yours.
Last year’s budget is a benchmark too
External benchmarks get the attention, but in my experience the stronger anchor is internal. We spent $20 million last year. Revenue is forecast to grow 5 per cent, so perhaps marketing gets another 5 per cent. The company needs to protect margin, so the budget stays flat. Everyone has an efficiency target, so marketing takes out 10 per cent. Once that number is on the table, it becomes the frame for the whole planning conversation.
There is good reason to use history. It tells us what things cost, what we are already committed to, and what worked, what did not and where money was wasted. The danger is when historical spend hardens into an assumption about future need. Last year may have included a major launch, or should have included one and did not. The company may have been overinvesting, or chronically underinvesting and has now built that underinvestment into its planning. Competitors may have stepped up, customer behaviour may have shifted, media costs may have moved, or the business may have set a growth target that bears no relationship to the resources behind it.
Once the previous number is the anchor, enormous organisational energy goes into debating small movements around it. Marketing argues for a few per cent more. Finance asks where savings can be found. Teams cut activities to fit the envelope. All of that can happen without anyone revisiting the more important question of what the business needs marketing to accomplish.
The current data suggests the tension is getting sharper. Gartner reports that marketing budgets have been on a plateau since 2022, with the 2026 average at 7.8 per cent of company revenue, 18 per cent below the mean allocation four years earlier. At the same time, 73 per cent of CMOs describe the growth expectations placed on them as high, very high or overly ambitious, and in the same 2026 research 56 per cent said their marketing organisation lacked the budget to deliver its strategy. There may be good reasons to constrain investment. But there is an obvious tension when growth expectations rise without any discussion of what level of investment that growth requires.
Starting from zero
There is a well-established idea in budgeting that challenges the habit of starting with last year’s number: zero-based budgeting. Mark Ritson has written about it for years. In a 2016 Marketing Week column on Unilever’s adoption of the approach, he challenged the assumption that it was simply a cost-cutting exercise. A proper zero-based approach, he argued, starts with the research and the marketing plan, determines what the plan requires and builds the budget from there, rather than accepting an arbitrary percentage of forecast sales and working backwards.
I like the principle more than the terminology. No sensible marketing leader walks into planning pretending the previous year never happened. Historical performance matters. Existing commitments matter. What the business can afford matters. We should know whether activity delivered a return and whether money was wasted. The useful part of zero-based thinking is removing the assumption that the previous allocation automatically deserves to become the next one.
The sequence changes when you approach it this way. You begin with the business problem and the growth ambition, understand what is happening in the market, decide where marketing can make a difference, build the strategy, and then determine what the strategy requires. The eventual budget still has to survive commercial scrutiny. Leadership may decide the company cannot afford the plan. Marketing may need to make trade-offs. The growth ambition itself may need to change. At least those trade-offs are made consciously, instead of being hidden inside an inherited number.
Ritson revisited budgeting in 2022 with his “Triple-Cooked Marketing Budgets” approach, and importantly he did not claim there was a perfect calculation for every brand. Drawing on econometrician Grace Kite’s analysis of three effectiveness datasets, he proposed broad rules of thumb as a practical starting point, then adjustment for the context of the business. The answer is not to replace last year’s arbitrary number with a different arbitrary number.
The value is in knowing what the evidence can tell you, and where judgement has to take over.
The budgeting problem is also a marketing problem
There is a deeper reason marketing budgets so often begin with cost. Marketing itself has spent years becoming defined by efficiency. Digital gave us unprecedented visibility into activity and performance. We could see clicks, leads, conversions, acquisition costs, return on ad spend and pipeline. That was progress, but it also changed how marketing talked about its value and, eventually, how organisations thought about the function.
What could be attributed became easier to defend. Activity with an immediate, measurable return became easier to fund. Marketing became very good at answering questions about what a lead cost, whether acquisition costs were rising, what media returned, whether conversion could be improved and whether a process could be automated. Agencies were pushed to deliver more efficiently, technology promised more productivity, and the growing supply of performance data made short-term results far easier to scrutinise than long-term market effects.
These are useful disciplines. The problem is the imbalance that develops when they dominate. The 2026 CMO Survey found that marketing leaders spend 68 per cent of their time managing the present and 32 per cent preparing for the future, a split the survey says has held every year since 2019. Under pressure from CEOs, boards and CFOs, 70.6 per cent said they were focusing more on short-term impact over long-run gains. The same research found that marketing spending decisions remain more reactive than strategic, shaped heavily by financial pressure and executive response.
This changes what marketing becomes inside an organisation. If most conversations with the C-suite concern cost, productivity, attribution and near-term return, marketing is gradually understood through those lenses.
A function that is mostly asked to demonstrate efficiency will eventually be managed as an efficiency function.
That is when the annual planning conversation becomes one about delivering the same outcome with a little less money.
When marketing looks like an expensive department
If marketing is understood mainly as the department that produces campaigns, buys media, generates leads, creates content and runs channels, it looks expensive. Salaries, agencies, technology, production, events, media and research all sit as visible costs in the P&L, and it is easy for someone to look at the total and ask what could be removed.
Gartner research from 2024 shows how widespread that perception is. In a survey of 395 CMOs, 47 per cent said marketing was viewed inside their organisation as an expense rather than a strategic investment. A separate Gartner survey of 378 senior marketing leaders the same year found that only 52 per cent believed they were successfully proving marketing’s value and receiving credit for its contribution to business outcomes. That is not only a communications problem for CMOs. It says something about how the role of marketing is understood inside many organisations.
The role has become too narrow. Marketing should help the business understand markets and customers, find growth, shape propositions, create and capture demand, build brands, support pricing power, increase penetration and make the company easier to choose. Sometimes it creates demand that sales can convert today. Sometimes it builds the conditions that make growth easier next year. And sometimes the most valuable thing a marketing team can do is recognise that communications are not the problem at all. The constraint may be the product, the price, distribution, the proposition or the customer experience.
This broader commercial orientation is what distinguishes the strongest marketing functions I have worked in and observed. They know where the company expects growth to come from and understand the market well enough to have a view on whether the ambition is realistic. They are close enough to customers to see emerging opportunities and commercially confident enough to challenge assumptions. They can make a case for investment without reducing every decision to a short-term ROI calculation, because the organisation understands that marketing is one of the ways the company creates growth.
There is research behind this. Gartner describes a group it calls “market-shaper CMOs”: leaders who use deep customer and market insight to identify unmet needs and influence business direction. In a Gartner survey of 125 CEOs and CFOs, companies where the CMO was effective at market shaping were 2.6 times more likely to exceed revenue and profit goals, and CMOs who were very effective market shapers were eight times more likely to exceed performance expectations than those who were not. The distinction Gartner draws is the useful part. These leaders do more than translate an existing enterprise strategy into marketing activity. They help shape where the business goes next.
AI is making the choice more urgent
For all the talk of AI transforming marketing, most of the conversation still begins with efficiency. How much time can we save, how much content can we automate, can we cut production costs, can a smaller team do more, can we reduce our dependence on agencies? These are legitimate questions. Marketing should eliminate unnecessary work and use technology to improve how it operates. Nobody benefits from protecting inefficient processes.
The risk is that efficiency becomes the limit of our ambition for AI. Gartner’s 2026 research found marketing leaders allocating an average of 15.3 per cent of their budgets to AI initiatives, with 70 per cent of CMOs calling AI leadership a critical goal, yet only 30 per cent reporting mature AI readiness. Gartner’s advice to marketing leaders is telling: reposition AI as a growth engine and move beyond viewing it only as an efficiency tool.
The productivity gains will be real. The more interesting opportunity sits beyond producing the same marketing for less money. AI can improve how marketers understand customers, interrogate data, spot changes in demand, explore segments, test propositions and learn from experiments. It can make research and insight more accessible, improve coordination between sales and marketing, and give marketers more capacity for the problems where judgement and commercial understanding matter.
There will be situations where the efficiency dividend should come out of the cost base. Businesses have to stay competitive and marketing has no special right to preserve waste. But there is no rule that every dollar or hour AI saves must disappear from marketing. That capacity can be reinvested in customer research, creative quality, brand building, experimentation, capability or market expansion, wherever it creates more commercial value.
If our biggest ambition for AI is making marketing cheaper, we should not be surprised when organisations conclude they need less marketing.
Efficiency matters, but it is not the strategy
Good marketing leaders should care deeply about efficiency. Money spent on ineffective activity should be redirected. Processes that consume time without improving outcomes should go. Technology nobody uses should go. Agencies should be accountable for the value they create. Every dollar has an opportunity cost, and treating marketing as a growth investment makes financial discipline more important, not less.
The danger is when efficiency becomes the organising idea. A business can become extremely efficient at activities that contribute very little to growth. If AI or process improvement releases 10 per cent of a marketing budget, there is a strategic decision to make about where that capital creates the most value. The company may urgently need the margin. Marketing may have a higher-return opportunity that has been underfunded for years. Money might move from production into media, from a saturated acquisition channel into retention, or toward the longer-term demand creation that keeps being sacrificed because every investment is judged against this quarter’s pipeline.
This is where the long-running evidence on advertising investment earns its place. Nielsen’s review of share-of-voice research summarises the established relationship between share of voice and market share: Binet and Field, analysing 171 campaigns, found that market share typically grew by around 0.5 percentage points for every 10 points of excess share of voice. Nielsen is careful about the nuances. The relationship varies by category, brand size, channel and competitive circumstance. That makes share of voice useful evidence for budget planning, and not another universal formula to apply without context.
The point is not that marketing should always spend more. Sometimes the right answer is to spend less. Sometimes there are better uses for the capital elsewhere in the business. A growth-oriented view of marketing does not mean protecting every budget line or assuming more investment produces more growth. It means making those decisions in the context of the commercial opportunity, rather than treating cost reduction as evidence of a better marketing strategy.
So how much should you spend?
This is the point where most articles about marketing budgets produce a number. There are useful reference points. Gartner reports an average of 7.8 per cent of revenue in its 2026 survey; the CMO Survey reports 9.0 per cent. Ritson’s 2022 work, drawing on Grace Kite’s analysis, suggests that spending between 5 and 10 per cent of turnover on advertising is a sound rule of thumb, with Ritson proposing 10 per cent as the practical starting point. All of these are valuable, provided we remember what they are.
I would want to know those numbers. I would want my team to know them. I would use benchmarks, share of voice, previous spend, unit economics, margins, market data and effectiveness research to challenge the plan. What I would not do is outsource the budget decision to any one of them.
The CMO Survey also splits its figure by company type: 7.0 per cent of revenue at B2B product companies and 10.1 per cent at B2B services companies. The full set of B2B marketing budget benchmarks is on the Back2Marketing blog.
The starting point is the growth ambition and the market situation. Where is growth expected to come from, and what is happening in the category? What needs to change among customers for the ambition to be realised? How strong is the brand, what are competitors doing, and where can marketing actually influence the outcome? What would need to be done well enough, for long enough, to give the strategy a credible chance?
Only then can we sensibly ask what that strategy costs. At that point last year’s spend becomes evidence rather than destiny. Benchmarks tell us whether our number is unusual. Share of voice tells us something about competitive investment. Unit economics and margins tell us what the business can sustain, and finance imposes the real constraints every strategy has to live within.
If the plan says marketing needs 15 per cent of revenue while comparable companies spend 7, the gap deserves scrutiny. The proposal may be extravagant. The benchmark may be inappropriate. The company may have set a growth ambition it cannot afford, or it may be facing years of accumulated underinvestment.
The purpose of the benchmark is to expose the question, not to answer it.
Five checks before the budget is set
The argument compresses into five checks, worth running before the first number goes on the slide:
Start with the growth ambition, not the envelope. Write down where the business expects growth to come from and how much, before anyone quotes last year’s spend.
Diagnose the market before you cost the plan. Name what has to change among customers, what competitors are doing and where marketing can actually influence the outcome.
Cost the strategy, then compare. Build the budget from what the plan requires, and only then set it against last year and the benchmarks.
Treat benchmarks and share of voice as pressure tests. A number that is unusual needs an explanation. It does not need to be changed until it has one.
Make the trade-offs visible. If the business cannot afford the plan, say which part of the ambition is being given up, rather than hiding the cut inside a flat budget.
If you cannot answer these before the number is set, the number is setting your strategy. If you can, the number becomes what it should have been all along: evidence.
What the budget says about marketing
There is a reason I care about this beyond the annual irritation of budget season. How a company sets its marketing budget tells you how it sees marketing. When the conversation begins with last year’s cost base, it moves naturally toward increases, reductions and efficiencies. When it begins with the growth ambition, the questions get broader and more commercially useful. Where does the company want to win? What would need to change for that to happen? What is stopping it now? Where can marketing make a real difference? What is the business prepared to invest, and what should it reasonably expect in return?
High-performing marketing functions should welcome that scrutiny. Marketing does not deserve investment simply because it is marketing, and a growth engine still has to produce growth. But the scrutiny has to work both ways. If a business wants aggressive growth while holding marketing investment flat, that assumption deserves to be examined. If it expects marketing to build future demand while measuring the function entirely on the current quarter, the consequences of that choice should be visible. If it wants AI transformation but frames the opportunity almost entirely around reducing headcount and production costs, it should be clear about what kind of marketing function it is creating.
Most importantly, if the budget has been decided before anyone has agreed the marketing strategy, we should be honest about what has happened. The investment envelope has constrained the strategy before the strategic choices were made. That is the marketing budget trap.
Back2Marketing exists to help marketers plan the other way round.
We believe marketing is a commercial discipline, not a promotional service. Its budget is a consequence of what the business needs marketing to achieve, not the starting point of the plan.
We believe benchmarks, last year’s spend and effectiveness research belong in the conversation as evidence, constraints and pressure tests. They are not substitutes for strategic thinking, and a precise-looking average is not a strategy.
Above all, we believe the sequence matters more than the number. A better planning process starts with where the business wants to grow, what needs to change in the market and what role marketing can realistically play. The numbers still matter, perhaps more than ever. They just come second.
The budget gets set before the strategy. That is the marketing budget trap, and it is a choice, not a law of finance.
Evidence informs. Judgement decides.
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Sources
Gartner, CMO Spend in 2026: Redefining Marketing Investment Under Constraint, June 2026. Marketing budgets have plateaued since 2022; the 2026 average is 7.8 per cent of company revenue, 18 per cent below the mean allocation four years earlier; 73 per cent of CMOs describe growth expectations as high, very high or overly ambitious.
Gartner, 2026 CMO Spend Survey, May 2026. 401 CMOs and marketing leaders surveyed January to March 2026; 56 per cent say their marketing organisation lacks the budget to deliver its 2026 strategy; AI at 15.3 per cent of marketing budgets; 70 per cent name AI leadership a critical goal; 30 per cent report mature AI readiness.
The CMO Survey, 35th edition, 2026. 308 marketing leaders at US for-profit companies, 97 per cent at VP level or above; marketing budgets at 9.0 per cent of company revenue; 68 per cent of time managing the present against 32 per cent preparing for the future, every year since 2019; 70.6 per cent shifting toward short-term impact over long-run gains.
Gartner, Only 52% of Senior Marketing Leaders Can Prove Marketing’s Value, press release, September 2024. Two surveys: 378 senior marketing leaders (April to May 2024), of whom 52 per cent say they successfully prove marketing’s value; and 395 CMOs (February to March 2024), of whom 47 per cent say marketing is viewed as an expense rather than a strategic investment.
Gartner, Top Three Priorities for CMOs to Deliver Marketing Excellence in 2025, December 2024, and Market-Shaping CMOs Are Eight Times More Likely to Succeed in Their Role, May 2025. Both report one survey of 125 CEOs and CFOs conducted August to September 2024: companies where the CMO is effective at market shaping are 2.6 times more likely to exceed revenue and profit goals; 88 per cent of CMOs who are very effective market shapers exceed performance expectations, which Gartner reports as eight times more likely.
Mark Ritson, Why Unilever is right to adopt zero-based budgeting, Marketing Week, January 2016. The marketing team researches, builds the plan and concludes it with a budget request and a promised return, rather than accepting an arbitrary percentage of projected sales.
Mark Ritson, Triple-Cooked Marketing Budgets: The full recipe, Marketing Week, October 2022, and Marketing Week’s summary Ritson’s ‘foolproof’ system for marketing budgets, October 2022. Grace Kite’s analysis of three datasets (the ARC database, Paul Dyson’s budget optimisations and Nielsen’s 2022 ROI study) supports a rule of thumb of 5 to 10 per cent of turnover on advertising; Ritson proposes 10 per cent as the practical starting point.
Nielsen, Need to know: What is share of voice?, 2025. Summarises Binet and Field’s analysis of 171 campaigns (1980 to 2010): market share typically gained 0.5 points for every 10 points of excess share of voice, with the relationship varying by category, brand size, channel and pricing power.