Marketing budgets averaged nearly 8% of company revenue in 2025, flat for the second straight year, according to Gartner’s 2025 CMO Spend Survey. That number comes from companies mostly over $1 billion in revenue. For smaller and local businesses, the right answer is usually higher as a percentage and much smaller in dollars, which is exactly why you need your own budget instead of borrowing someone else’s.
An effective marketing strategy comes with a cost. For many businesses, the hard part is figuring out what that cost should be. So how much should your business spend on marketing? It depends, but this guide will help you figure it out once and for all: what a marketing budget is, how much to allocate, three worked examples, and an eight-step process, plus free templates.
Contents
- What is a marketing budget?
- Why you need a marketing budget
- How much should you budget for marketing?
- How to create your marketing budget
- Marketing budget examples
- 10 free marketing budget templates
- Marketing budget FAQs
What is a marketing budget?
Let’s cover the basics first: A marketing budget is the amount of money you allocate toward promoting your business.
When you run a multichannel marketing strategy, a marketing budget tells you how much to spend on each marketing channel, plus the other line items that come with marketing your business.
Here are a few examples of what goes into a marketing budget:
- Marketing software
- A marketing partner
- Your in-house marketing team
- Creative design
- Contract or freelance work
- Advertising
- Reputation management
- Website services
- Branding services
Essentially, a marketing budget outlines all the money you’ll spend on marketing-related projects over a period of time—typically a year.
🚨 Want to know all the possible ways you could spread your marketing budget? Take a look at our complete cross-channel marketing guide that will break down all your marketing options.
Why you need a marketing budget
Committing real dollars to marketing can be a challenge for small businesses. It’s still the single most useful planning document you’ll produce this year. Here’s why:
1. It can inform your marketing strategy
With endless options for marketing out there, it’s hard to know where to start. Your marketing budget gives you a starting line: once you know how much you can spend, you can prioritize the strategies and channels that both fit in your budget and drive the best ROI for your business. A marketing budget keeps your strategy clear and organized.
2. It helps you keep track of your results
If your marketing budget is tied to your marketing goals, you’ll set specific KPIs around the results you expect that budget to yield. That tells you whether your marketing is using your money wisely or needs adjusting. It also gives you a reason to check progress regularly. You want to see your money being put to good use.
3. It can help you identify areas of optimization
As you spend your marketing budget, you’ll see which parts of your marketing are performing and which need help. By tracking budget, spend, and results together, you can catch slow leaks before they turn into a flood.
4. It can keep you competitive
It also helps to know how other businesses are thinking about marketing spend right now. The current numbers:
- Marketing budgets sit at 7.7% of company revenue, flat from 2024, per Gartner’s 2025 CMO Spend Survey of 402 marketing leaders.
- Even so, 59% of CMOs say they don’t have enough budget to execute their strategy. Everyone is being asked to do more with the same money.
- Paid media takes the biggest single slice: 30.6% of marketing budgets in Gartner’s survey.
- Digital keeps growing inside the budget: The CMO Survey’s 33rd edition found digital marketing spending grew 11.1% over the past year, with 12.7% growth projected for the next.
As Ewan McIntyre, VP analyst and chief of research at Gartner’s marketing practice, put it: “While marketing budgets have stabilized, marketing spending has stalled at a level that falls short for many CMOs.”
Here’s a look at how small businesses are thinking about their budgets right now.
The takeaway: You need to spend money to make money if you want to stand out from the competition. A written budget is how you make every one of those constrained dollars accountable.
5. It can fuel your always-on marketing strategy
Running marketing year-round, rather than just seasonal campaigns, keeps your business building an online presence and maintaining the historical data that AI-optimized ad campaigns learn from. When you budget accordingly, it’s easier to sustain an always-on marketing approach that grows your business through every season.
📆 Do you know why you need to market your business year-round? Find out + get tips to do it right in our guide to Always-On Marketing: The Not-So-Secret Strategy for Unstoppable Growth >>
How much should you budget for marketing?
The honest answer: It depends on your goals, your industry, and your stage. Factors that shape the number:
- Your overall business goals
- How your customers buy (map it with a sales funnel)
- Industry trends
- Your target audience
- Business expenses aside from marketing
Some businesses set a fixed dollar amount for the year. Others allocate a percentage of revenue. Some cap spending once they hit specific objectives.
As a starting rule of thumb, most local businesses put about 5-10% of revenue toward marketing. Businesses focused on growth push higher: 14% or more. For context, the large companies in Gartner’s 2025 survey average 7.7%, but they’re spreading that across national brand campaigns. A local business buying visibility in one metro gets more per dollar and usually needs a higher percentage while growing.
Want your own numbers instead of ours? Try our marketing budget calculator. It does this math for any revenue and percentage, then splits it by channel:
INTERACTIVE TOOL
Marketing Budget Calculator
Enter your revenue, pick an allocation percentage and see your annual and monthly marketing budget with a suggested channel split.
Rule of thumb: most local businesses start at 5-10% of revenue; growth-focused businesses run 14% or more. Fine-tune with the slider.
$40,000
per year ($3,333/month)
SUGGESTED STARTING SPLIT (EDITABLE MENTAL MODEL, NOT A MANDATE)
How to create a marketing budget in 8 steps
Let’s look at the easy steps to create your own marketing budget.
INTERACTIVE TOOL
Marketing Budget Readiness Checklist
The eight steps from this guide as a scorecard. Check what you've done; the score and your next move update as you go.
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1. Organize your financial information
First, take stock of your current financial information and gather the documentation you need to understand your business costs and finances. Pull revenue forecasts, review historical financials, and loop in your accountant or financial advisor so the budget you set is one your cash flow can honor.
2. Assess your marketing goals
Your business’s current state tells you which marketing strategies deserve investment. Frame your goals as SMART goals (specific, measurable, attainable, relevant, timely) to keep the budget pointed at outcomes.
For example, one of your SMART goals could be to grow your Instagram following by 5% in 30 days through weekly video posts.
3. Choose how you’ll source your marketing budget
Decide the funding approach: a percentage of revenue, a fixed dollar amount, or a goal-dependent threshold. For example, a business earning $2 million annually that allocates 10% has a $200,000 marketing budget.
Pro tip: While you might ideally want to keep your spending consistent, building some flexibility into your budget planning is also important. Markets shift mid-year; your budget should be allowed to notice.
4. Decide how you’ll execute your marketing budget
Will you run marketing with an in-house team, an agency, freelancers, or a mix? Each carries different cost structures. The line items in your budget follow from this choice.
Evaluate all your options before you rule anything out. For example, the cost of in-house versus a marketing partner may surprise you!
5. Factor in the costs of the basics first
Fund the foundation before the experiments: an optimized website, social media marketing, and local SEO are the infrastructure everything else builds on. Strengthening your online presence makes every paid dollar work harder.
Pro tip: Run your site through our free website grader to understand what marketing strategies will help you improve your online presence.
6. Estimate your channel costs
Allocate across channels using industry benchmarks and your own historical data. Current reference points from our 2026 search advertising benchmarks: the average cost per click is $5.42, the average conversion rate is 8.18%, and the average cost per lead is $66.69 across industries.
The math matters because clicks aren’t customers. Say you want local PPC ads to bring in 10 new customers per month and your industry’s average CPC is $5.42. At an 8.18% conversion rate, that’s roughly 12 clicks per lead, so 10 leads means about 122 clicks and roughly $663 in click spend. Not every lead becomes a customer either. Budget from the benchmark, then adjust to your actuals.
Pro tip: If you’re new to a certain marketing strategy you’re budgeting for, leave yourself wiggle room.
Using industry resources like this will help you anticipate costs across channels for budget allocation purposes.
7. Make your marketing budget make sense for you
Structure the budget so your team can actually read it. Track monthly, keep the format consistent, and match it to how your team already reports.
Pro tip: Set up the ways you’ll measure your marketing ROI in advance. Schedule regular check-ins to keep yourself on track with your “big picture” goals.
An example of a Google Sheets marketing budget template that can be used for tracking and reporting.
8. Don’t forget the details
Sort the logistics: payment methods, invoicing procedures, and which card each subscription bills to. Unglamorous, but this is what prevents the surprise $400 renewal in March.
Pro tip: Try to maintain consistency across your payment methods to make all your costs easier to manage.
Marketing budget examples
Here are three marketing budget examples, one per business size, showing what those percentages look like in dollars. (They’re worked examples of the math, not spending mandates.)
Small business marketing budget example
A small business generating $100,000 in annual revenue that allocates 10% would budget $10,000 per year (about $833 per month) for marketing while building its digital presence.
Medium-sized business marketing budget example
A business at $1 million in annual revenue dedicating 12% would budget $120,000 per year ($10,000 per month).
Marketing budget example for enterprise or multi-location businesses
A multi-location business at $50 million in annual revenue allocating 14% would budget about $7 million per year toward marketing.
Marketing budget templates
You don’t need to build your budget spreadsheet from scratch. Start with ours, then raid the rest of the list:
1. LocaliQ marketing planning template
Our free marketing planning template is built for beginners, with guidance for the steps before, during, and after you set your budget.
2. LocaliQ marketing budget guide
Our marketing budget guide is an editable PDF worksheet for businesses reworking an existing budget, with calculation guidance built in.
3. Monday
Monday offers budget templates broken down by use and industry, organized inside its work management platform.
4. Smartsheet
Smartsheet published 12 free marketing budget templates organized by timeframe or channel.
5. Template Lab
Template Lab’s customizable business budget templates balance revenue against marketing expenses for small businesses.
6. Score
SCORE’s annual marketing budget template is an Excel sheet that tracks costs across the entire year, bird’s-eye style. (SCORE’s mentors will also review your budget with you for free, which is the best deal in small business.)
7. 24Slides
24Slides has a customizable PowerPoint deck with graphics for presenting an evolving campaign budget to stakeholders.
8. ProjectManager
ProjectManager’s marketing budget template is an Excel build broken out by marketing channel, showing individual and total costs.
9. PDFconverter.com
PDFconverter’s Excel templates account for market research, staff costs, and the rest of a small business’s budget picture.
10. Google Sheets annual budget
The free annual budget template in the Google Sheets template gallery is the fastest zero-cost start: duplicate it, relabel the categories to your marketing channels, and share it with your accountant.
11. HubSpot
This marketing budget resource from HubSpot is accessible in a few different ways—making it ideal for a business owner on the go. These eight templates are categorized by marketing channel, so this resource does the job when you’re looking to get hyper-specific.
Marketing budget FAQs
What is a marketing budget?
A marketing budget is the amount of money a business allocates toward promoting itself over a set period, typically a year. It covers advertising, marketing software, staff or agency costs, creative design, website services, and related line items. It determines how much goes to each marketing channel.
How much should a small business spend on marketing?
Most local businesses start with about 5-10% of revenue going toward marketing, while growth-focused businesses push to 14% or more. For comparison, large enterprises in Gartner’s 2025 CMO Spend Survey average 7.7% of company revenue. A $100,000-revenue business at 10% budgets $10,000 per year.
What percentage of a marketing budget should go to paid media?
There’s no universal split, but Gartner’s 2025 CMO Spend Survey found paid media takes 30.6% of marketing budgets on average, the largest single allocation. Local businesses that depend on search visibility often run higher. Base your split on where your customers actually are, then check it against results quarterly.
How do I estimate marketing channel costs?
Estimate marketing channel costs by starting from published benchmarks, then replacing them with your own data as it accumulates. Per LocaliQ’s 2026 search advertising benchmarks, the average cost per click is $5.42, the average conversion rate is 8.18%, and the average cost per lead is $66.69. Multiply your lead target by cost per lead for a realistic channel cost estimate.
How often should I revisit my marketing budget?
Revisit your marketing budget monthly for performance checks and quarterly for rebalancing. Channel costs like CPC move throughout the year, seasonal demand shifts your channel mix, and a marketing budget reviewed only in January quietly drifts away from reality by summer.
Grow your business with a marketing budget
Plant yourself a seed for success with a solid marketing budget. Creating one can seem impossible at first glance, but it only takes a few steps to make one that works for your business. There are plenty of ways to optimize both small marketing budgets and mega marketing budgets, so don’t hesitate to get started, whichever end of the budget pool you’re on.
For more support in making the most of your marketing budget, see how our solutions can help you maximize your campaigns regardless of the marketing and advertising costs you might face.
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