Right Percentage of Gross Revenue to Invest in Marketing (2026 Data)

What Companies Spent on Marketing in 2026

Two big surveys track marketing budgets every year, and they disagree. That's normal. They ask different companies.

Gartner's 2026 CMO Spend Survey polled 401 marketing leaders, most of them at companies with $1 billion or more in revenue, between January and March 2026. Budgets came in at 7.8% of company revenue, barely up from 7.7% the year before. CMOs now put 15.3% of their budgets into AI.

Gartner's 2025 CMO Spend Survey of 402 CMOs had budgets flat at 7.7%, the same as in 2024. Half of those CMOs reported budgets of 6% or less, and 59% said their budget wasn't enough to carry out their strategy.

The CMO Survey, run by Duke's Fuqua School of Business with Deloitte and the American Marketing Association, put Spring 2026 budgets at 9.0% of revenue and 9.6% of overall company budgets, from 308 U.S. marketing leaders polled in January 2026. Its Spring 2025 report had 9.4% of revenue and 11.4% of company budgets, up from 7.7% and 10.1% in 2024. Total marketing spending grew just 1.7% over the year to 2026.

Marketing budget as a percentage of company revenue, by survey edition.

Why the gap? Sample. Gartner's respondents are mostly billion-dollar companies. The CMO Survey reaches further down the size ladder, and smaller companies spend a bigger share of revenue on marketing, so its average runs higher. Both numbers are honest. Neither one is your number.

Forrester adds a B2B-only view: the average B2B firm puts 8% of revenue into marketing, and European B2B firms put in 9%.

Smaller companies get a simpler rule. The U.S. Small Business Administration's marketing plan guide says businesses with revenue under $5 million should put 7-8% of revenue into marketing, assuming net margins of 10-12%. Don't skip that margin assumption. A business running on 5% margins can't spend like one running on 15% and stay solvent.

Why "Average" Marketing Budget Benchmarks Mislead

In 2023, MIT Sloan Management Review published "The End of Averages for Marketing Budgets" by Ali Tavassoli and Christine Moorman, who leads the CMO Survey. Their point: sector differences run so large that one overall average tells you very little. In their data, B2C budgets averaged 13.9% of revenue and B2B budgets averaged 9.3%.

Company size pulls the other way. The bigger the company, the smaller the share of revenue it spends on marketing, which is why enterprise-heavy surveys report lower averages.

So if you run a $2 million home services company and measure yourself against Gartner's 7.8%, you're benchmarking against Fortune 500 cost structures, brand recognition and acquisition math. Setting a budget from your own numbers instead is a big part of the digital marketing guidance I do with clients.

Marketing Budget as a Percentage of Revenue by Industry and Business Type

You'll find plenty of industry tables online with figures quoted to two decimal places. Most trace back to a single paywalled chart with no year on it, so I don't use them. The split the CMO Survey reports every year is more useful anyway: whether you sell to businesses or to consumers, and whether you sell products or services.

The 2025 edition looked different: B2C product companies spent 15.5% of revenue, B2B services 9.0%, B2B product 6.4% and B2C services 6.0%. Sub-groups this small move around from year to year, so treat any single year as a range, not a target.

Measured as a share of the total company budget instead of revenue, the 2026 order is B2C product 13.8%, B2C services 11.5%, B2B services 9.2% and B2B product 7.0%.

For a home services company, every marketing dollar comes out of the same account as payroll.

For a home services contractor, the SBA guideline is the honest starting point. A plumbing company doing $1 million a year at 7-8% would budget $70,000 to $80,000, roughly $5,800 to $6,700 a month, across Google Ads, SEO and local search optimization. Busy metro markets with well-funded competitors usually need more.

The Floor Problem: When a Percentage Is Too Small to Work

Percentages break down at the small end. A cleaning company doing $15,000 a month that follows the 7-10% rule ends up with $1,050 to $1,500 a month. In a lot of markets that buys a few dozen paid clicks. That's not enough to tell whether a campaign works at all.

So work the budget backward as well as forward. Start with what a customer is worth and what a lead costs in your market, then decide how many new customers you need this year. If a new customer brings in $2,000 in profit over time and it takes about $250 in marketing to land one, 40 new customers a year needs $10,000. Whether that comes to 2% or 12% of your revenue matters less than whether the math pays.

When revenue is small and the backward math asks for more than you can afford, put the money where it works with less: your Google Business Profile, steady reviews, and a website that turns visitors into calls. Those cost more time than ad dollars.

How Your Company's Growth Stage Changes the Math

A company in year one and a company in year fifteen face different problems. Nobody knows the new company's name. It has no reviews and no repeat customers, so every dollar builds awareness from zero. That's why young companies usually spend above the averages in this article. Venture-backed companies go further still, because their investors are buying market share, not this year's profit.

Established companies with recognizable brands can get by on a smaller share. Referrals and repeat business carry more of the load, so each marketing dollar has less work to do. A plumber with twenty years of repeat customers lives in a different world from one who opened last spring.

What Happens When Companies Cut Their Marketing Budget

Marketing is usually the first budget to go. In the Spring 2026 CMO Survey, executives cut marketing ahead of other expense categories 45.4% of the time, and 53.1% of companies said they focus on cutting expenses when profits miss, up from 46.0%.

The research on recessions says that instinct is expensive. Harvard Business Review's "Roaring Out of Recession" studied 4,700 companies across three recessions. Only about 9% came out stronger than they went in, and 17% didn't survive at all. The ones that pulled ahead cut costs selectively while still investing in their future, marketing included.

Analytic Partners found that brands which increased media investment during a downturn saw roughly 17% growth in incremental sales. McKinsey found that companies which grew through the 2008 recession beat their sector peers by more than 150 percentage points of cumulative shareholder return over about a decade.

The companies that kept investing during downturns reaped the rewards for years after.

By Gartner's own count, budgets averaged 11% of revenue in the four years before the pandemic. They haven't been back since. That leaves an opening for anyone willing to keep spending. When competitors pull back, ad auctions get cheaper, and ranking in search results gets easier because fewer of them are publishing.

Where Marketing Dollars Go: Channel Allocation in 2026

Online channels took 61.1% of marketing spend in Gartner's 2025 survey, the highest share since Gartner started tracking it in 2013. Paid media was the largest single slice at 30.6% of budgets. In the 2026 CMO Survey, digital marketing spending grew 8.2% while total marketing spending grew 1.7%, and social media took 14.3% of budgets.

The ad market tells the same story. U.S. internet advertising revenue reached nearly $300 billion in 2025, up 13.9%, according to the IAB/PwC Internet Advertising Revenue Report. Search, AI search included, brought in $114.2 billion of it. That's up 11%, a slowdown from 15.9% growth in 2024.

Search is where buyers with intent show up, which is why it takes such a big slice of most digital budgets.

Search ads keep their share for one reason: the person typing is already looking for what you sell. Email is the cheap overachiever. Litmus puts the average return at $36 for every $1 spent.

Two shifts stand out. Marketing technology fell to 22.4% of budgets in 2025, down from 23.8% in 2024 and 25.4% in 2023, even as AI spreads. And AI now handles 24.2% of marketing activities, according to the 2026 CMO Survey, with marketers expecting 55.9% within three years. And 41.5% of companies already practice generative engine optimization: they write content so AI assistants will cite it.

The 60/40 Rule, and Why B2B Sits Closer to 46/54

Les Binet and Peter Field spent years mining the IPA Databank of advertising effectiveness cases. Their best-known finding: for most brands, about 60% brand building and 40% performance marketing produces the best long-term results. For B2B, follow-up work by the B2B Institute put the optimum closer to 46% brand and 54% activation.

Brand building is broad-reach work that makes people think of you when they eventually need what you sell. Performance marketing is built for an immediate click, call or purchase. Most companies overspend on performance, because a Google Ads dashboard shows conversions today while brand work pays off over quarters and years.

Binet and Field also tied share of voice to growth. Brands whose share of voice runs ahead of their market share tend to grow. LinkedIn's guide to their work puts it at about 0.7% of annual market share growth for every 10 points of excess share of voice, and 0.6% in B2B. Small numbers, until they compound.

On a $200,000 budget with a 60/40 split, about $120,000 goes to work that builds your reputation and presence, like search engine optimization, content and community involvement. The other $80,000 funds campaigns that capture demand right now.

Beyond Percentages: CAC, LTV and the Metrics That Matter

Revenue percentages are a starting point. Customer acquisition cost and lifetime value tell you whether the spending pays.

A common rule of thumb: lifetime value should be at least three times acquisition cost. Spend $300 to win a customer worth $900 and you're in good shape. Spend $300 on a customer worth $400 and you have a problem, whether your budget is 5% or 15% of revenue. Subscription businesses also watch payback. Earning back the acquisition cost within about 12 months keeps cash free for growth. To run these numbers for your own business, plug them into my free marketing investment calculator.

McKinsey estimates that 15-20% of marketing spend can be freed up by measuring marketing return properly, and that companies doing it well see efficiency gains of up to 30% and up to 10% more top-line growth without a bigger budget. Spending better often beats spending more.

Budget-growth headlines overstate things, too. In Forrester's 2026 planning guide, 83% of B2B marketing decision-makers expected higher investment, but only 37% of U.S. respondents expected an increase of 5% or more.

When and How to Adjust Your Marketing Budget

Set the budget once a year and review it every quarter. That's long enough to see campaign results and short enough to react.

Reallocate when acquisition cost moves 20% or more in either direction, when a well-funded competitor starts flooding your market, when you launch a new service, or when your marketing intelligence data shows a channel stalling. Keep 10-15% uncommitted for the opportunity you can't plan for, like a partnership offer or a competitor who stumbles.

How to Set Your Marketing Budget in Five Steps

1. Start with a benchmark. 7-8% of revenue if you're under $5 million (SBA), or the 7.8-9.0% survey averages if you're larger.
2. Adjust for what you sell. B2C product companies run highest. B2B product companies run lowest.
3. Adjust for your stage. Newer companies spend above the averages. Established brands with steady referrals can spend below them.
4. Check the floor. Work backward from customer value and lead cost, and make sure the budget buys enough leads to learn from.
5. Hold 10-15% in reserve and review the whole budget every quarter.

One of my clients was acquired by a venture capital firm, and the new owners immediately raised their Google Ads budget tenfold. They cared less about this quarter's efficiency than about how fast they could own their market.