How much of revenue is going to marketing?
№ 167 · Marketing spend as % of revenue
Definition
MetricTotal marketing budget as a share of company revenue
Unit% of revenue
Single line over time. 15 to 25% typical for growth SaaS; 5 to 15% for retail. Build from total marketing spend divided by revenue per period. Rising trend without revenue acceleration signals diminishing returns. Example: 18% Q1, 24% Q4 (concerning if revenue growth flat).
- SaaS
- Software as a service. Software sold as a recurring subscription rather than a licence.
Benchmarks
| Bottom 30% | Median | Top 30% |
|---|---|---|
| Below 4% signals underinvestment for a growth company, above 15% at scale signals inefficiency; early-stage B2B SaaS below $5M ARR sits at a median 14% by design | 7.7% (Gartner 2025) to 9.4% (Deloitte/Duke CMO Survey); half of Gartner respondents run at 6% or less, so the median CMO is below the average | Not a top-is-better metric; the efficient band is roughly 6 to 10% for established companies, with the judgement being whether spend is proportionate to growth rate rather than whether it is low |
Gartner: n=402 CMOs in North America, UK and Europe, majority above $1B revenue, 2025. Benchmarkit: B2B SaaS by ARR band, 2025. Marketing budget here excludes sales cost, which is the most common definitional error when comparing to S&M ratios · This metric is directionless without stage and model context, which is why direction is set to shape. Gartner's 7.7% is an average across large enterprises while half the same sample sits at 6% or below, so the mean and median diverge materially and quoting 7.7% as typical overstates it. Gartner and the Deloitte/Duke CMO Survey disagree by 1.7 points because of sample composition and self-reporting, not because either is wrong. Marketing budget excludes sales headcount; a S&M-inclusive figure for B2B SaaS runs far higher, which is why Benchmarkit's ARR-band series is the right comparator for software and Gartner's is the right one for large enterprises.
| Category | Bottom 30% | Median | Top 30% |
|---|---|---|---|
| B2B SaaS below $5M ARR | above 20% | 14% of revenue | under 10% |
| B2B SaaS above $150M ARR | above 7% | 4% of revenue | under 3% |
| Private B2B SaaS, all bands | above 12% of ARR | approx. 8% of ARR | under 6% of ARR |
| Consumer packaged goods | n/a | approx. 18% of revenue | n/a, spend is structurally high |
| IT and business services | n/a | 5.8% in 2025, down from 9.0% in 2024 | n/a |
When it looks bad
The spend share line climbs while the revenue line is flat, so the ratio is moving because the denominator stalled rather than because the company chose to invest, and the chart records a decision nobody made.
Marketing at 8.1% of revenue rising to 11.4% over four quarters with absolute spend unchanged, because revenue fell 29% and nothing in the budget was reset.
What to do about it
- Chart absolute spend and revenue as two lines underneath the ratio; a rising ratio caused by falling revenue requires a budget reset, while a rising ratio caused by deliberate investment requires a payback check, and the ratio alone cannot distinguish them.
- Benchmark against the ARR band rather than the cross-industry average; B2B SaaS marketing budget falls from a median 14% of revenue below $5M ARR to 4% above $150M (Benchmarkit 2025), so a $20M ARR company comparing itself to Gartner's 7.7% enterprise figure is using the wrong reference entirely.
- Split the ratio into paid media and everything else; paid media is 30.6% of marketing budget and 2.4% of company revenue at Gartner's sample, so a company well above the benchmark on total spend but at or below on media has a labour and agency cost question, not a media question.
- Where the ratio is high and payback is long, cut agency before media; 39% of CMOs planned agency reductions in 2025 with the top actions being eliminating unproductive relationships and renegotiating scopes, which removes cost without immediately removing demand.
Sources
- Gartner Marketing budgets flat at 7.7% of company revenue for a second year; paid media 30.6% of marketing budget, equal to 2.4% of company revenue; 59% of CMOs report insufficient budget gartner.com ↗
- Gartner Confirms 7.7% of company revenue and details channel and budget reallocation by industry gartner.com ↗
- Chief Marketer 7.7% average is down from 9.5% three years earlier; half of respondents run budgets at 6% of revenue or less; IT and business services fell from 9% to 5.8% chiefmarketer.com ↗
- Campaign US Digital takes nearly two-thirds of channel budget with 69% of digital spend going to paid channels; half of CMOs report 6% of revenue or less campaignlive.com ↗
- Marketing Brew Budgets flat at 7.7% after two years of decline and still below pre-pandemic levels marketingbrew.com ↗
- Boomcycle Gartner reports 7.7% of revenue while the Deloitte/Duke CMO Survey reports 9.4%; CPG near 18% and energy near 3%; B2C product companies spend roughly 2.5x B2B product companies boomcycle.com ↗
- Benchmarkit with Emergence Capital Marketing budget falls from a median 14% of revenue below $5M ARR to 4% above $150M ARR; pipeline generated is the top marketing metric at 62% of respondents benchmarkit.ai ↗
- The Zulu Method Private B2B SaaS spends about 8% of ARR on marketing at the median per SaaS Capital 2026; median company spends $2.00 in S&M per $1 of new ARR thezulumethod.com ↗
- Benchmarkit Median new CAC ratio $2.00 of S&M spend per $1 of new ARR in 2024, up 14% YoY, fourth quartile $2.82; CAC payback highly correlated to ACV band benchmarkit.ai ↗