What is a realistic marketing budget as a % of revenue?

The short answer

Most companies spend between 7% and 10% of revenue on marketing. Smaller companies spend more, not less: firms under $10 million in revenue report about 19.6%, while firms over $10 billion report 4.3%. The right number depends on your growth target, margin and sales cycle, not on an industry average.

What the actual benchmarks say

Two credible surveys measure this, and they disagree in a useful way.

The CMO Survey, run by Duke University’s Fuqua School of Business with Deloitte and the American Marketing Association, collected 308 responses from US marketing leaders between 7 and 29 January 2026. It found marketing budgets at 9.0% of company revenues and 9.6% of overall company budgets, the lowest share in several years.

Gartner surveyed 401 CMOs across North America, the UK and Europe between January and March 2026, mostly at companies above $1 billion in revenue. It found marketing budgets at 7.8% of company revenue, up marginally from 7.7% in 2025.

Direction matters as much as level. The same CMO Survey panel forecast 8.9% growth in marketing spending and 11.9% growth in digital marketing spending over the coming year. Budgets are a smaller share of revenue and still growing in absolute terms, which tells you revenue grew faster than marketing did.

The gap between 9.0% and 7.8% is company size. Big companies spend a smaller share of a much larger number. That matters because most benchmark articles quote the enterprise figure to owners of $5 million businesses, who then underspend by half.

By company size

By business model

Both tables come from the same January 2026 CMO Survey dataset. A $15 million B2C services business sitting at 4% of revenue is not being disciplined. It is starving.

How to tell which number applies to you

Benchmarks tell you whether you are strange. They do not tell you what to spend. Build the number from the bottom up instead, in four steps.

1. Start with the revenue you need from marketing. Not total revenue. The portion that must come from new customers marketing is responsible for sourcing.
2. Divide by average deal value to get the number of new customers required.
3. Divide by your close rate from qualified lead to customer. If you do not know this number, stop and find it. Every budget built without it is guesswork.
4. Multiply the resulting lead count by your cost per lead. If you have no history, the 2026 all-industry median for search advertising is $66.69 per lead at an 8.18% conversion rate. That figure comes from 13,474 US search campaigns measured between April 2025 and March 2026 across 23 industries, reported as medians. Use your own category rather than the headline number.

Then sanity-check the total against the tables above. If bottom-up says 6% and your size band says 13%, either your close rate is unusually strong or your growth target is unambitious. If bottom-up says 30%, your unit economics do not support the target and no budget will fix that.

Three modifiers move the number materially. Higher gross margin supports higher spend. Longer sales cycles need more spend earlier, because you are funding pipeline that lands two or three quarters out. And a new market entry costs more than defending an existing one, every time.

What we’d do

TACK has worked with 300+ brands across 15+ industries since 2009. Budget conversations go the same way every time.

• Split the number into three buckets, not one. Demand capture, which is people already looking for you. Demand creation, which is people who do not know you exist. And infrastructure, which is the site, tracking, CRM and content assets everything else depends on. Most underperforming budgets are 95% capture and 5% everything else, which caps growth at the size of existing demand.
• Watch where the money actually goes. Gartner’s June 2026 survey of the same 401-CMO panel found awareness and conversion together account for 62.6% of total media spend, while loyalty and retention take under 15% and have fallen 29% since 2024. Retaining an existing customer is cheaper than acquiring a new one, so an allocation that ignores retention inflates the budget you need.
• Fund infrastructure first in year one. Spending 12% of revenue driving traffic to a site that converts at 1% is the most expensive mistake in this article. Our paid media and CRO work is deliberately one engagement because the media budget is wasted without the conversion side.
• Hold a fixed test allocation. Ten to fifteen percent of the marketing budget, ring-fenced, spent on channels you cannot yet prove. Without it you will still be running the same two channels in three years.
• Account for AI properly. Gartner found CMOs now allocate 15.3% of marketing budgets to AI, rising to 21.3% at organisations Gartner classes as AI-ready, though only 30% report mature AI capability. Budget for the integration work, not just the licences. See our capabilities for how we scope that.

Common mistakes

Setting the budget as a percentage of last year’s revenue. Marketing funds next year’s revenue. Percentage-of-trailing-revenue budgeting guarantees you underfund exactly when growth is available and overfund after a good year is already banked.

Counting salaries inconsistently. The 9.0% figure includes marketing staff costs. If you compare your media-only spend to it, you will conclude you are underspending by half and buy media you cannot support operationally. Decide what is in the number and hold it constant.

Cutting the whole budget in a soft quarter. Demand capture spend can be throttled quickly with proportional loss. Demand creation cannot be restarted quickly, because the pipeline it feeds is months long. Cutting both together produces a revenue hole two quarters later that looks like it came from nowhere.

The bottom line

Nine percent of revenue is the current all-company median, but your size band matters more than the median: under $10 million in revenue, the reported figure is closer to 19.6%. Build the number bottom-up from your close rate and cost per lead, then check it against the benchmark rather than the other way round.

If you want help pressure-testing your number before you commit the year, book twenty minutes at calendly.com/tack-media-agency/talk-to-an-expert or call TACK at 310-620-1141. Engagements start at $5,000 per month.

Sources

• The CMO Survey Highlights and Insights Report 2026 (Duke Fuqua, Deloitte, AMA)
• Gartner 2026 CMO Spend Survey
• LocaliQ: search advertising benchmarks 2026
• The CMO Survey: marketers claim a broader role and increased influence
• Gartner: awareness and conversion account for 62.6% of total media spend
• WordStream: 2026 Google Ads benchmarks