This is one of the most common questions I get.
It usually shows up right after another sentence like,
“We feel like we should be spending more.”
Or, “Our competitors seem louder than us.”
Or, “Sales wants more leads.”
Then comes the real ask.
“What percentage should we be spending on marketing?”
People want a number. A rule. A clean benchmark they can point to and feel confident about.
That number does not exist.
At least not in any way that actually helps.
Why the Percentage Question Is the Wrong Starting Point
Marketing spend is not a fixed tax.
It is an investment decision.
Yet many companies treat it like rent or payroll. Something that should neatly fit into a predefined percentage of revenue.
That approach ignores reality.
Two companies with the same revenue can require wildly different marketing budgets depending on what they are trying to accomplish.
One is defending market share.
Another is trying to grow 30 percent.
One has strong inbound demand.
Another is invisible.
One has a short sales cycle.
Another has a six month buying process.
Same revenue. Completely different needs.
Context matters more than benchmarks.
What Actually Determines How Much You Should Spend
Marketing spend should be driven by business conditions, not industry averages.
Here are the real factors that matter.
Growth Goals
A company trying to maintain steady revenue spends very differently than a company trying to grow aggressively.
Maintenance marketing is about consistency and efficiency.
Growth marketing is about expansion, testing, and sometimes discomfort.
If leadership wants faster growth but keeps a maintenance budget, frustration is guaranteed.
Margins
High-margin businesses have more flexibility.
Low-margin businesses have less room for error and need tighter discipline.
Marketing that works at 70 percent gross margin can destroy a business operating at 30 percent if it is not tightly controlled.
Sales Cycle
Short sales cycles can handle faster experimentation and quicker spend adjustments.
Long sales cycles require patience, stronger messaging, better nurturing, and more coordination with sales.
If you spend aggressively without accounting for how long it takes revenue to show up, marketing will look like it is failing even when it is not.
Competition
Markets with heavy competition cost more to compete in.
If you are in a crowded category, visibility is expensive. There is no way around that.
The mistake is pretending otherwise and underfunding marketing while expecting outsized results.
Positioning
Clear positioning reduces marketing waste.
When people instantly understand who you are, what you do, and why you matter, every dollar works harder.
When positioning is fuzzy, marketing has to work overtime just to explain you, and spend increases with very little return.
The Most Common Budgeting Mistake
The biggest mistake I see is increasing spend before fixing direction.
Marketing is not a slot machine. You do not pull the lever harder and expect better results.
If messaging is unclear, the funnel is broken, or sales and marketing are misaligned, more money simply amplifies those problems.
You get more traffic that does not convert.
More leads sales does not want.
More activity with no confidence.
That is not a budget problem. That is a leadership problem.
When Spending More Actually Makes Sense
Increasing marketing spend works when fundamentals are in place.
Spending more can accelerate growth when:
- Messaging is clear and consistent
- The target customer is well defined
- The funnel is understood from first touch to closed deal
- Sales can reliably close leads
- You know which channels convert and why
In these situations, additional spend is not guesswork. It is fuel.
You are not hoping something works. You are scaling what already does.
That is when marketing starts to feel predictable instead of stressful.
When Spending More Hurts You
Spending more fails when leadership mistakes activity for progress.
More budget hurts when:
- Strategy is unclear
- Sales and marketing do not trust each other
- Results feel random month to month
- No one owns outcomes
- Reporting focuses on vanity metrics instead of revenue
In these cases, increasing budget creates noise.
Teams stay busy. Dashboards look impressive. But revenue does not follow.
Worse, leadership loses confidence in marketing entirely.
The Hidden Cost of Under-Spending
Under-spending has its own risks.
When companies spend too little, they often experience:
- Inconsistent lead flow
- Overreliance on referrals
- Panic spending during slow periods
- Short-term decisions driven by fear
Marketing becomes reactive instead of intentional.
This is especially common in growing companies that are profitable but cautious. They want growth, but they are afraid to commit.
The result is a stop and start approach that never builds momentum.
A Better Way to Think About Marketing Spend
Instead of asking, “What percentage should we spend?” ask better questions.
- What growth outcome are we trying to achieve?
- What is our current visibility gap?
- How long does it take revenue to show up?
- Where do we already see traction?
- What is broken that money will not fix?
Marketing spend should be tied to outcomes, not comfort levels.
Sometimes that means spending more.
Sometimes it means spending differently.
Sometimes it means spending less until clarity exists.
Why Slowing Down Can Be the Smartest Move
One of the hardest recommendations I make is telling companies not to increase spend.
Not because they cannot afford it.
Because they are not ready for it.
If direction is unclear, slowing down long enough to fix fundamentals saves more money than rushing forward.
Clear positioning.
Aligned teams.
Defined priorities.
Owned accountability.
Once those are in place, budget decisions become obvious.
The Role of Marketing Leadership in Budget Decisions
This is where marketing leadership matters most.
Someone needs to connect:
- Business goals to marketing activity
- Spend to outcomes
- Effort to return
Without leadership, budget decisions are emotional.
With leadership, they become strategic.
Marketing spend stops being a guessing game and starts becoming a lever.
The Real Answer to the Question
How much should a growing company spend on marketing?
Enough to support its goals.
Not so much that confusion grows faster than clarity.
Not so little that growth becomes accidental.
There is no universal percentage.
There is only the right decision for the business you are actually running.
And that decision starts with clarity, not a calculator.