Every planning season starts with the same question: how big should the marketing budget be? In 2026 the honest answer is that most firms spend between 7% and 12% of revenue on marketing, UK budgets are rising for the third quarter in a row, and the money is moving fast towards paid media, digital video and social. This report pulls the best 2025 and 2026 evidence into one place: what a marketing budget should be as a percentage of revenue, how that changes by sector, where UK budgets are going, and a seven step plan to set yours with confidence.
We use the IPA Bellwether Report for the UK picture, the Gartner CMO Spend Survey and The CMO Survey for budget levels and mix, the Advertising Association and WARC for market size, and peer reviewed effectiveness research for what happens when budgets are cut.
The short version
- Most firms spend 7% to 12% of revenue on marketing. The CMO Survey puts the 2026 average at 9.0%, from 7.0% for B2B product firms to 12.0% for B2C product firms.
- UK budgets are growing again. The IPA Bellwether net balance hit +14.3% in Q3 2026, with events, PR and main media all up. Main media had its best reading in nine years.
- Paid media is taking a bigger slice. Gartner says paid media rose to 31.4% of budgets in 2026 while martech fell to 19.4%, and digital channels now take 67.5% of marketing expenses.
- Cutting is expensive. Brands that go dark lose share year after year: about 10% after one year and 28% after three, in a study of 365 brands.
- Set the number from goals, not habit. Anchor on a percentage of revenue, then test it against your growth target and share of voice. Our seven step plan is below.
How much should a marketing budget be in 2026?
There is no single correct figure, but there is a well evidenced range. The CMO Survey, run by Duke University's Fuqua School of Business with Deloitte and the American Marketing Association, found that marketing budgets averaged 9.0% of company revenue and 9.6% of the total company budget in early 2026, based on 308 senior US marketers. That is a touch lower than the 9.4% the same survey recorded in 2025.
Gartner's 2026 CMO Spend Survey of 401 large firms in North America, the UK and Europe reports a lower average, because its sample is weighted towards companies with revenue above $1bn, where the absolute sums are huge but the percentage is smaller. Big firms tend to spend a smaller share of a bigger number.
For smaller businesses, the most quoted rule of thumb comes from the US Small Business Administration: firms with revenue under $5 million should put 7% to 8% of revenue into marketing, assuming margins of around 10% to 12%. The same guidance is clear that this is a starting point, not a law.
“Marketing budgets can vary widely, from 2 percent of sales to 20 percent (while gearing up a new product or service).” US Small Business Administration
Our view: treat 7% to 12% of revenue as the normal band for an established business, go higher when you are launching, entering a new market or trying to take share, and only go lower when your brand already dominates its category and the job is maintenance.
Marketing budgets by industry and business type
The average hides big differences. Business to consumer product companies, which fight for attention on shelves and in feeds, spend the most. B2B product firms, which sell through sales teams and long relationships, spend the least as a share of revenue.
Marketing budget as a percentage of revenue, by business type (%)
At industry level, The CMO Survey found the highest shares in consumer services (19.1% of revenue) and education (18.4%), with mining and construction at the bottom. The survey also asked where spend is heading over the next 12 months, and the pattern is the same in every sector: digital up, traditional advertising flat or down.
| Business type | Budget as % of revenue | Budget as % of company budget | Expected digital growth, next 12 months | Expected change in traditional advertising |
|---|---|---|---|---|
| B2B product | 7.0% | 7.0% | +9.4% | minus 0.3% |
| B2B services | 10.1% | 9.2% | +8.8% | minus 2.2% |
| B2C product | 12.0% | 13.8% | +13.0% | minus 4.1% |
| B2C services | 7.2% | 11.5% | +12.8% | +1.1% |
| All firms | 9.0% | 9.6% | +10.4% | minus 1.5% |
Source: The CMO Survey 2026, US marketing leaders, January 2026. Means.
What percentage of revenue should a B2B marketing budget be?
For B2B, the benchmarks sit between 7.0% (product) and 10.1% (services) of revenue. The bigger question for B2B is usually not the total but the split. In their work for the LinkedIn B2B Institute, Les Binet and Peter Field found that B2B efficiency appears to peak when around 46% of the budget goes on brand building and 54% on activation, a more even split than the 60:40 they recommend for consumer brands. They called the B2B result tentative because it rests on fewer than 50 cases, but it is the best evidence available.
Are UK marketing budgets rising in 2026?
Yes. The IPA Bellwether Report, the UK's longest running quarterly survey of marketing budgets, asks around 300 marketing leaders, mostly from the UK's top 1,000 companies, whether they have revised their budgets up or down. In Q3 2026, 25.6% raised budgets and 11.3% cut them, a net balance of +14.3%. That is the third quarter of growth in a row and the strongest reading in nine quarters.
UK marketing budgets: net balance of firms revising budgets up, by quarter (%)
The line tells a useful story for anyone setting a 2027 budget. At the end of 2025 the outlook was grim: the net balance was flat at 0.0% and firms' preliminary expectations for 2026/27 were among the weakest in the survey's history. Then budgets rose in every quarter of 2026. Plans made in a gloomy January were too cautious.
Q3 2026: net balance of UK firms revising budgets, by category (%)
The detail matters. PR hit a series high, events stayed strong and main media, the bucket that covers advertising, posted its best reading in nine years. Within main media, other online (which includes social and search) led at +17.2 and video followed at +9.8. Market research turned positive for the first time in seven quarters, which suggests firms are investing in knowing what works, not just in doing more.
The caution is in the outlook. The same Q3 survey found only a modest +3.0% net balance expecting growth in 2026/27, and S&P Global cut its UK adspend forecast for 2027 to +1.3%. Firms' confidence in the wider industry stayed negative.
How big is the UK advertising market?
The Advertising Association and WARC put UK advertising spend at £46.7bn in 2025, up 6.4%. In July 2026 they raised their forecasts after a strong first quarter, when spend grew 9.3% to £11.7bn, and now expect £50.5bn in 2026 and £53.5bn in 2027. Search is still the largest channel, at 38.3% of 2025 spend, with social at 24.7%.
UK advertising spend, actual and forecast (£bn)
Globally, WARC expects ad spend to grow 11.9% to $1.34 trillion in 2026, with social the fastest growing channel. Advertiser surveys point the same way: ISBA's 2026 Media Budgets Survey found 65% of UK advertisers expected their total marketing budget to rise in 2026, against 50% globally, and Forrester's 2027 planning research found 91% of marketers expect their budgets to increase next year.
Where marketing budgets are going
The total is only half the picture. The mix inside marketing budgets has changed more in the last five years than in the previous fifteen.
Share of the marketing budget going to paid media and martech, 2021 vs 2026 (%)
Gartner's 2026 survey shows paid media rising to 31.4% of the marketing budget, its highest level in five years, while martech fell to 19.4%, its lowest. 53% of CMOs plan to spend more on paid media. Digital channels now make up 67.5% of marketing expenses, up from 54.9% in 2023, and within digital, search ads take 16.0% and social ads 15.7%. Gartner also reports that awareness and conversion now take 62.6% of media spend while loyalty and retention spend has fallen 29% since 2024.
Offline is not dead. Events take 23.1% of offline budgets and linear TV 15.5%, and the B2B and B2C mixes differ sharply: events are 27.6% of B2B offline budgets, while linear TV is 19.9% of B2C offline spend. If you are weighing TV against streaming, our report on connected TV advertising covers the buying routes.
Social media share of the marketing budget: now, in 12 months and in five years (%)
Social is the clearest long term shift. US marketing leaders say social media takes 14.3% of their budget today and expect it to reach 23.1% within five years. For the trade offs inside that line, see our report on paid vs organic social media. Search is changing too, as AI answers reshape how people find brands, which is why we now treat generative engine optimisation as part of the owned media budget rather than an afterthought.
How to allocate a marketing budget
Once you know the total, three decisions do most of the work: the split between brand building and activation, the channel mix, and how much you hold back to test and move.
What is the 60:40 rule for marketing budgets?
The 60:40 rule comes from Les Binet and Peter Field's analysis of the IPA Databank, which covers 996 campaigns for 700 brands in 83 categories. On average, the most effective campaigns put around 60% of spend into long term brand building and 40% into short term activation. The right ratio moves by category and life stage, and B2B sits closer to 46:54. We cover the splits by situation in our report on brand vs performance marketing, so we will not repeat them here.
“Efficiency appears to be maximised when around 46% of the budget is allocated to brand.” Les Binet and Peter Field, The 5 Principles of Growth in B2B Marketing
Use share of voice to sense check the total
Share of voice is your share of all advertising in your category. The same body of IPA work found that brands whose share of voice is above their share of market tend to grow, and Binet and Field's B2B analysis found that each 10 points of excess share of voice was linked to around 0.6 points of extra market share a year for B2C brands and 0.7 points for B2B. If your market share is 15% and your share of voice is 8%, your budget is probably too small to grow, whatever percentage of revenue it represents.
Choose a budgeting method
| Method | How it works | Best for | Watch out for |
|---|---|---|---|
| Percentage of revenue | Set the budget as a fixed share of current or forecast revenue | Stable businesses that need a quick, defensible number | Budget falls exactly when sales fall, which is often when you need it most |
| Objective and task | Cost out what it takes to hit a specific goal, then add it up | Launches, new markets, clear growth targets | Easy to overspend if the goals are not tied to profit |
| Share of voice | Spend enough to hold a share of category advertising above your market share | Brands trying to grow share in a competitive category | Needs a decent estimate of competitor spend |
| Competitive parity | Match what competitors spend | Defending a position | Copies their mistakes and ignores your goals |
| What you can afford | Spend what is left after other costs | Very early stage firms with no data | Treats marketing as a cost, not an investment |
Advertain guidance. Most strong budgets combine two: a percentage of revenue as the anchor and objective and task to decide the final number.
What happens if you cut the marketing budget?
When finance asks for savings, marketing is often first in line, because the costs are visible now and the damage shows up later. Gartner found that 62% of CMOs expect budget cuts if they miss 2026 growth targets. The evidence on what cuts do is consistent.
Researchers at the Ehrenberg Bass Institute studied 365 US supermarket brands that stopped advertising for a year or more. On average they lost about 10% of market share after one year, 20% after two and 28% after three. The decline was slow at first, which is exactly why cuts feel safe at the time.
Recessions tell the same story. Peter Field's review of around 50 IPA case studies from the 2008 and 2009 downturn concluded that it was the brands that held their nerve that came out ahead. Vendor research from Analytic Partners points the same way: brands that cut media in the last recession lost around 18% of incremental sales, while those that increased it gained around 17%. Treat that last figure with care, as the method is not published.
If you must cut, cut smart: protect the brand building that compounds, pause the activation with the weakest measured return, and keep at least a presence in your core channels. Our guide to marketing ROI explains how to tell which spend is really working.
How to calculate your marketing budget: a seven step plan
This is the process we use with the brands we work with. It turns a vague percentage into a number you can defend in a board meeting.
| Step | What to do | Output |
|---|---|---|
| 1 | Anchor on a percentage of revenue for your sector and stage | A starting range, for example 7% to 12% |
| 2 | Write down the growth target and what it requires | A cost per goal for each objective |
| 3 | Check your share of voice against your market share | Whether you need to spend above the anchor |
| 4 | Split brand building and activation | A ratio such as 60:40 for B2C or about 46:54 for B2B |
| 5 | Allocate by channel using evidence, not habit | A channel plan with test budgets ring fenced |
| 6 | Hold back 10% for tests and in year moves | A reserve you can redeploy each quarter |
| 7 | Agree the measures and the review rhythm with finance | A quarterly review that moves money to what works |
Advertain guidance.
A worked example. A UK B2C product brand with £20m revenue (illustrative) starts with an anchor of 10% of revenue, or £2m. It holds a 12% share of its market but only 9% share of voice, so to grow it needs to spend above the anchor, say £2.4m. It splits that roughly 60:40 between brand and activation, puts £240,000 (10%) into a test reserve, and reviews the plan with finance each quarter. The figures are illustrative; the logic is the point.
Two practical notes. First, budget for the people and production behind the media: our guides on video production costs in the UK and in house vs agency marketing cover those lines. Second, agree how you will measure success before the money moves. Gartner found that one in five CMOs already reallocates more than 5% of the budget every month, and 38% do so each quarter. Flexibility only helps if you know what to move towards.
Marketing budget for small businesses
How much should a small business spend on marketing?
Start with the SBA's 7% to 8% of revenue guide, then adjust for your situation. A new business with no awareness may need to spend well above that for a period, in line with the SBA's own note that budgets run up to 20% of sales when launching. An established local business with strong word of mouth may need less. What matters most at small scale is focus: one or two channels done consistently beat five done badly. If social is one of them, our guide on how to calculate social media ROI shows how to prove it is paying back.
We could find no robust, recent survey of what UK small businesses actually spend on marketing, so be wary of any precise UK SME benchmark you see quoted without a source.
Frequently asked questions
What is a good marketing budget as a percentage of revenue?
For most established businesses, 7% to 12% of revenue. The CMO Survey's 2026 average is 9.0%, ranging from 7.0% for B2B product firms to 12.0% for B2C product firms. Spend more when launching or chasing share.
What should a marketing budget include?
Paid media, content and production, martech and data, agency and freelance fees, events and sponsorship, research and measurement, and the cost of the marketing team if you report it that way. Gartner's 2026 survey shows paid media at 31.4% and martech at 19.4% of the average budget.
Should you increase your marketing budget in a downturn?
If you can, hold it or increase it. Brands that stop advertising lose market share steadily, about 28% after three years in an Ehrenberg Bass study, and IPA case studies from the last recession show the brands that held their nerve came out stronger.
How do you allocate a marketing budget between channels?
Set the brand and activation split first (around 60:40 for B2C, closer to 46:54 for B2B), then choose channels by where your audience spends attention and by measured return, and keep about 10% for testing.
Want help building a budget that grows the brand, not just the dashboard? See our work or get in touch.
