It's the question every founder eventually asks: how much should we actually be spending on marketing? Spend too little and you starve growth. Spend too much on the wrong things and you burn cash you can't get back. The good news is you don't have to guess — there's a framework that scales with your business.
Most "just spend 10% of revenue" advice is too blunt to be useful. A pre-launch startup, a scaling e-commerce brand, and an established service firm should all treat their budgets differently. Here's how we think about it.
Start with a percentage of revenue — then adjust
The industry rule of thumb is that businesses invest somewhere between 7% and 15% of gross revenue into marketing. That range is a starting point, not an answer. Where you land inside it — or outside it — depends on three things:
- Your growth stage. If you're establishing a brand or entering a new market, you sit at the top of the range or above it. Growth costs money before it makes money. Established brands defending market share can operate at the lower end.
- Your margins. A high-margin business can reinvest aggressively because each new customer is worth more. A thin-margin business has to be far more disciplined about efficiency.
- Your goals. "Grow 15% this year" and "double in 18 months" are not the same budget conversation. Your spend should be reverse-engineered from the target, not picked because it feels comfortable.
Split the budget: growth vs. foundation
A number on its own doesn't help. What matters is how you divide it. We split every marketing budget into two buckets:
- Foundation (the assets you own). Your website, your brand, your email list, your SEO and content. These compound. A dollar here keeps working long after you spend it.
- Growth (the channels you rent). Paid ads and paid social. These turn off the moment you stop paying — but they buy speed and data you can't get any other way.
Early on, weight toward foundation. You cannot pour paid traffic into a site that doesn't convert and expect a return — you're just renting attention and letting it leak out the bottom. Fix the engine first, then feed it.
A marketing budget isn't a cost to be minimised. It's an investment to be allocated — and the allocation matters more than the amount.
Tie every dollar to a number
The single biggest budgeting mistake we see: spending by activity ("we need to post more, run some ads, send a newsletter") instead of by outcome. Before a dollar goes out, it should be attached to a metric you can watch — cost per lead, cost per acquisition, return on ad spend, revenue per email sent. If you can't say what a line item is supposed to move, that's not a budget. It's a wish.
This is also how you earn the right to spend more. When you can prove that $1 in reliably returns $3 or $4, increasing the budget stops being a leap of faith and becomes an obvious decision. Measurement is what turns marketing from a gamble into a growth lever.
Revisit it quarterly, not yearly
Markets move, channels shift, and what worked last year quietly stops working. A budget set once and left alone for twelve months is a budget slowly drifting out of date. Review the allocation every quarter: double down on what's returning, cut what isn't, and keep a small slice — 10% or so — for testing new channels before your competitors find them.
The honest answer
How much should you spend on marketing? Enough to hit your growth goal, allocated between assets that compound and channels that accelerate, with every dollar tied to a number you're watching. That's a framework you can defend to a board — and one that grows with you instead of being torn up every year.
If you're not sure where your current spend is leaking, our 7-area marketing audit is the fastest way to find out before you commit another cent.