The answer to the age-old question – how much should our marketing budget be – is going to vary, based on what kind of business you have, how strong (or weak) your current branding is, what kind of market you’re operating in, and whether your business is in a “sustain” phase or a growth one.
Smart business owners know that the secret to an effective marketing strategy isn’t necessarily the size of the marketing budget, but how it’s strategically allocated. That’s why disruptive marketing is so powerful – when you can’t outspend the 800 pound gorilla in your market, you have to outsmart it.
But let’s clear the air on one major thing first.
Smart businesses don’t “spend” on marketing. They invest. Strategically. Predictably. Purposefully.
But how much is enough? And more importantly, where should that budget go first?
Let’s start with a universal truth:
If you haven’t built a strong brand, there’s no amount of paid ads that will save you.
Paid ads can drive traffic, but if your brand lacks clarity, trust, or emotional pull, that traffic won’t convert properly—it’ll just cost you burning through large amounts of ad dollars and sending you price-sensitive, pain-in-the-butt leads who don’t appreciate the genius of your business and what you offer.
On the other hand, if you have a strong brand, this makes every marketing dollar work harder. Your leads are more qualified because they already believe in your company and the value you provide, and they don’t view you as some kind of interchangeable commodity that they can do aggressive price shopping on.
Follow the 60/40 Rule
There’s a reason this principle is gospel in modern marketing strategy. The 60/40 rule, coined by marketing effectiveness experts Les Binet and Peter Field, recommends allocating:
Brand building is long-term. It drives emotional connection, credibility, and market perception.
Sales activation, on the other hand, is short-term. It pushes for conversion.
Here’s the kicker: companies that follow this model consistently outperform those that don’t—across industries, revenue sizes, and business models.
How Much Should You Invest?
Generally speaking:
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5–10% of gross revenue supports steady growth and retention.
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11–20% of gross revenue fuels aggressive growth, new markets, and major campaigns.
But the amount alone isn’t the full picture. You also need to ask: How should I allocate those funds based on the unique makeup of our business?
Let’s dig into the 9 most important factors to guide your marketing budget—and why branding remains at the core of each one.
1. Business Goals
Aggressive goals require a bold brand.
If your business goal is market leadership, your brand must lead emotionally—not just functionally. A strong brand makes performance marketing work better and cheaper.
Take Nike, for example. Before it could own the performance category, it had to first stand for something. “Just Do It” wasn’t a campaign—it was a global declaration of purpose. That brand identity paved the way for decades of profitable growth.
