How Much Should a Company Spend on Marketing? A Mid-Market Guide

How much should a company spend on marketing? There is no universal percentage that works for every business, and treating a benchmark as a target is one of the fastest ways to build the wrong budget.

Marketing budgets should be built from growth goals, customer economics, market conditions,

business model, and the capabilities required to execute. External benchmarks are useful as a

reasonableness check, not as the answer. For 2026, Gartner reports average marketing

budgets of 7.8% of company revenue among predominantly large enterprises, while The CMO

Survey reports a 9.0% average across its respondent base. A mid-market company can

reasonably sit above or below those figures depending on how much growth depends on

marketing, how mature the category is, and what the business is trying to build.

Marketing budget benchmarks are useful, but they are not the strategy

Executives often begin with a percentage of revenue because it creates a clean number.

That number feels objective.

But the benchmark does not know your growth target, customer acquisition cost, average contract value, sales cycle, market maturity, channel mix, or whether the company is trying to maintain its position or take share.

That is why marketing budget benchmarks should be treated as context.

Gartner's 2026 CMO Spend Survey found that marketing budgets averaged 7.8% of company revenue, up slightly from 7.7% in 2025. But the vast majority of Gartner respondents were companies with more than $1 billion in annual revenue.

The CMO Survey reported a 2026 average of approximately 9.0% of company revenue. Its breakouts also show meaningful differences by business model and company size.

Those numbers are useful because they tell leadership what other organizations are spending.

They do not tell you what your company should spend.

1. Start with the growth goal

The first question is not, "What percentage should marketing get?"

It is, "What are we asking marketing to accomplish?"

A company targeting modest organic growth should budget differently from one trying to enter two new markets, launch a new product line, or materially increase pipeline.

The budget should reflect the ambition.

If leadership wants aggressive growth while funding marketing like a maintenance function, the plan and the budget are already misaligned.

The opposite can also happen.

A company can spend heavily without a clear growth strategy and assume the budget itself will create momentum.

It will not.

Money amplifies a strategy. It does not replace one.

Before setting the budget, leadership should define:

Revenue growth target

Expected contribution from new customers

Expected contribution from existing customers

Priority markets and segments

New products or services being introduced

Sales capacity

Market share objectives

Major strategic bets

Those decisions establish what marketing is being asked to support.

2. Separate maintenance spending from growth spending

Not every marketing dollar has the same job.

Some spending keeps the existing system running.

That may include the website, CRM, core content, analytics, agency retainers, brand maintenance, email infrastructure, essential technology, and the internal team.

Other spending is intended to create incremental growth.

That may include expansion campaigns, new market entry, paid acquisition, product launches, new research, events, new creative platforms, or additional demand generation.

Leadership should understand the difference.

A company may say it has a $1 million marketing budget, but if $800,000 is required simply to maintain the existing organization and infrastructure, only $200,000 is actually available for new growth initiatives.

That distinction changes the conversation.

The budget should make clear what protects the current engine and what is funding the next stage.

3. Work backward from customer economics

A marketing budget becomes much more useful when it connects to the economics of acquiring and retaining customers.

For acquisition-focused businesses, that means understanding:

Average customer value

Gross margin

Customer acquisition cost

Sales conversion rate

Lead-to-opportunity conversion

Opportunity-to-close conversion

Payback period

Retention or churn

The company does not need perfect attribution before it can make better budget decisions.

It does need enough economic discipline to know what a customer is worth and what it can reasonably spend to acquire one.

For example, if the company wants 100 additional customers, leadership should be able to estimate how much pipeline is required, how many qualified opportunities are required, and how much demand generation capacity is needed to create them.

That creates a budget tied to the growth model rather than a percentage selected in isolation.

4. Your business model changes the answer

A B2B services company, a SaaS business, a consumer brand, and a multi-location professional services firm can all have the same revenue and require very different marketing budgets.

Why?

Because the role marketing plays in growth is different.

A business with founder-led sales and strong referrals may need less acquisition spending but more investment in positioning, content, systems, and sales enablement.

A company with a high-volume digital acquisition model may need a much larger media budget.

A business with long enterprise sales cycles may invest more heavily in account-based programs, events, thought leadership, customer marketing, and sales support.

An ecommerce company may spend far more directly on media because the path from marketing to transaction is shorter.

The CMO Survey's 2026 breakouts illustrate this variation. Its reported marketing-spend percentages differ across B2B and B2C models, company sizes, and industries.

That is exactly why a single universal benchmark is weak guidance.

5. Growth stage matters more than a neat percentage

A company maintaining a mature position can often operate differently from a company building the next stage of growth.

A growing mid-market company may be investing simultaneously in:

New leadership

Marketing operations

Brand development

Demand generation

Technology

Customer research

New creative

Website infrastructure

New market entry

Agency or specialist support

That can temporarily push marketing spend above what a mature benchmark would suggest.

That is not automatically inefficient.

The question is whether those investments are building capabilities the company genuinely needs.

Growth periods often require capacity before the resulting revenue fully appears.

The important distinction is between intentional investment and unmanaged cost.

6. Include the full cost of marketing

Executives sometimes compare budgets using incomplete definitions.

One company includes salaries, agencies, technology, media, production, events, and research.

Another counts only media and agency spending.

Those percentages are not comparable.

When calculating marketing investment, decide what the budget includes.

A complete view may include:

Internal marketing compensation

Agency fees

Freelancers and contractors

Paid media

Marketing technology

Creative production

Website and development

Events and sponsorships

Research

Content production

PR

Data and analytics

Customer marketing

Training or capability development

The CMO and CFO should agree on the definition.

Otherwise the company can spend far more than leadership realizes while still believing the marketing budget is conservative.

7. Do not let last year's budget become this year's strategy

One of the weakest budgeting methods is taking last year's number and adding or subtracting a percentage.

It is simple.

It is also disconnected from the actual business plan.

If the company is entering a new market, changing its positioning, expanding the sales team, introducing a new service, or reducing dependence on referrals, last year's budget may be a poor starting point.

The budget should respond to what changed.

A useful process starts with the strategic plan and asks what marketing capabilities and programs are required to support it.

Then leadership can compare that required investment with historical spending and external benchmarks.

That order is important.

Strategy first.

Benchmark second.

8. Build the budget in layers

For mid-market companies, I prefer thinking about the budget in layers rather than one large number.

Layer one: Core operating capacity

This is the cost of maintaining the marketing function.

People, systems, essential vendors, reporting, infrastructure, and recurring work.

Layer two: Proven growth programs

These are programs with enough evidence that the company expects continued investment.

Established paid channels, high-performing events, lifecycle programs, content systems, or other repeatable activities.

Layer three: Strategic growth bets

These are investments required to enter new markets, launch new offers, reposition the business, build a new channel, or materially change the growth model.

Layer four: Experimentation

The company should reserve some capacity to test.

New channels, creative approaches, technology, offers, audiences, or partnerships.

The exact mix will vary.

The principle is what matters.

Leadership should know how much of the budget is keeping the engine running, how much is scaling proven growth, and how much is creating the next source of growth.

9. Marketing headcount and media compete for the same budget

A company can have what looks like a healthy marketing budget and still lack the capacity to execute.

This happens when leadership focuses only on media.

Campaign spend gets protected while the internal team remains too small, marketing operations is underdeveloped, analytics are weak, or creative production becomes a bottleneck.

Gartner's 2026 research is useful here because it shows the increasing pressure on CMOs to fund AI and transformation while overall marketing budgets remain relatively flat.

That means budget allocation matters as much as the total number.

A company cannot simply buy more media if the operating system cannot absorb the demand.

The reverse is also true.

A large internal team with very little working media or program budget can become an expensive planning department.

The budget needs balance between people, systems, partners, and programs.

10. The budget should reflect confidence

Not every marketing initiative deserves equal certainty.

Some investments are established.

Others are hypotheses.

Budgeting should reflect that.

A proven program may receive committed funding for the year.

A newer initiative may receive staged funding tied to evidence.

Leadership can release additional budget when specific assumptions are validated.

That creates discipline without forcing every initiative to prove immediate revenue.

For example, the company may approve an initial investment to test a new market.

If the first phase produces the right demand signals, sales engagement, and customer evidence, the company increases investment.

If the evidence is weak, the company learns before committing the full amount.

That is a healthier approach than either refusing to experiment or funding every idea for twelve months.

11. A percentage can still be a useful guardrail

This is not an argument against benchmarks.

It is an argument against treating them as strategy.

If your budget model produces a number equal to 2% of revenue while comparable businesses often spend materially more, leadership should understand why.

Maybe the business has unusually strong organic demand.

Maybe marketing plays a limited role in growth.

Maybe the company is underinvesting.

Similarly, if the model produces 15% of revenue, that does not automatically mean the budget is excessive.

The company may be entering a new market or operating in a business model where marketing carries more of the acquisition burden.

Benchmarks should trigger questions.

They should not end the discussion.

A practical executive framework for setting the budget

Before approving the marketing budget, leadership should be able to answer six questions.

What growth is the business trying to create?

What role does marketing play in creating that growth?

What customer economics define acceptable acquisition cost?

Which marketing capabilities must exist to execute the plan?

How much spending maintains the current engine versus builds new growth?

What evidence will cause us to increase, reduce, or reallocate investment?

If those questions are answered clearly, the percentage of revenue becomes much easier to interpret.

If they are not, arguing over whether marketing should receive 6%, 8%, or 10% is mostly false precision.

The right marketing budget funds the strategy

The marketing budget should not be a reward for last year's performance or a negotiated percentage of revenue.

It should be the financial expression of the company's growth strategy.

That means some companies should spend more.

Some should spend less.

Most should spend differently.

The goal is not to match an industry average.

The goal is to fund the capabilities and programs required to produce the growth the company expects, while maintaining enough measurement discipline to know when the plan should change.

Green Mo. works with a limited number of companies at a time. If your company is unsure whether its marketing budget matches its growth strategy, customer economics, or operating capacity, apply for a Marketing Systems Audit to identify where investment is misaligned and whether there is a fit to work together.