'What percentage of revenue should we spend on marketing?' is the most common question a marketing director gets from a CFO, and the least useful one to answer literally. Two businesses at the same revenue with the same spend can be years apart in outcome depending on allocation.
Still, benchmarks are a starting point. Here is how to use them without being led astray.
The rough ranges
B2B scale-ups typically run marketing at 6-12% of revenue. High-growth software businesses chasing share often sit well above that; established services businesses with strong referral engines sit below it.
Growth stage matters more than sector. A business trying to double is not comparable to one defending a position, whatever the industry benchmark says.
Allocation beats amount
A reasonable long-run split is roughly 40% into brand and proposition work that compounds, and 60% into demand generation that converts now. Businesses that push demand above 80% typically see acquisition costs rise every year, because they are buying attention they never built.
The reverse failure is real too: brand investment with no conversion path attached produces awareness the sales team never sees.
Three signs your budget is under-powered
You cannot fund both brand and demand, so brand loses every quarter. Your cost of acquisition rises each year despite improving execution. Sales spends the first half of every conversation explaining who you are.
None of those are fixed by spending more on the same channels. They are fixed by proposition clarity and by protecting the compounding spend from short-term cuts.
Three signs it is badly allocated, not too small
More than half of budget goes to agencies producing volume against an unclear brief. Reporting cannot attribute pipeline by segment. Or the largest line item is a channel nobody has questioned in two years.
Before asking for more, run the allocation audit. In most scale-ups it releases 15-25% of spend with no loss of pipeline.
Benchmark to orient yourself, then stop. The useful number is not what others spend — it is what each pound of your own spend currently returns, and which pounds you can stop spending tomorrow.