Setting your marketing budget for 2025-26
A guide for growing B2B companies
Whether you are a founder/CEO, sales manager, or marketing specialist, you're probably trying to drive sales and grow your business.
It’s that time of year when business leaders are trying to put the finishing touches to their strategic plans and budgets for the 2025-6 financial year (eek, how did we get to twenty-twenty SIX), but it can often be challenging to know where to start when setting budgets.
Is it last year plus or minus a bit?
Is it dream big, then look at reality?
It’s even harder to know where to pitch your marketing budget if you have ambition for significant growth over the coming year(s) and need to ramp up your sales and marketing efforts.
I thought it would be helpful to share some guidelines to help you set your marketing budget for the year. In particular one that aligns and supports your business objectives and drives results.
A little note - this post is deliberately focused on marketing, but marketing and sales should be taken as a whole, so much of what is written below applies to the whole growth team, not just marketing.
What are Your Objectives
Sadly, some people have a very narrow view of marketing and consider it an expense, or a nice-to-have (“when we are bigger”). This often comes from a place of viewing marketing as only about the tactical activity. I have written a lot about this elsewhere, so won’t go into more detail here (although I’d love to hear from you if you want to talk more - get in touch), but here I will just say that done properly, marketing is a strategic business driver for you.
So, before you dive into the numbers, be clear about your business objectives and goals, and to have clarity over exactly how sales and marketing is going to play a part.
Is this about growth of an existing or new market?
Do you have a new product or an existing one?
Is the focus on growth through existing clients, or new lead generation?
Do people even know you exist?
Are you totally new to marketing and need to build capability and resource?
Of course, your answer might be just “yes, yes AND yes” to everything. But life is full of choices, so try and get really clear where priorities lie. I find it helpful to think about percentages when making trade-offs, for example:
“Most (80%) of our focus is on growth through selling a wider range of our offerings to our existing client base, but we’re going to be spending 20% of our time exploring this new market here”
It can also be useful to be really explicit about any assumptions you are all making about the activities you have planned and your setting of budgets. Assumptions could be macro (government legislation in this area is / not going to change), or specific, such as assuming a competitor will / not launch a new product, or that a specific activity will generate a specific outcome e.g. leads. Include your assumptions of the impacts on projected revenue or costs.
It’s More than Tactics
I find what is included in marketing budgets interesting to see. I’ve worked with, or for, organisations where the most random things are coded to marketing as a way of reducing what’s included in other budget lines (I might use the word ‘hiding’ here!).
At the other end are organisations who hardly code anything to marketing, as it is all coded elsewhere. I find this makes it hard to manage and get visibility of what you are doing and whether it is working (the adage: you can’t manage what you don’t measure).
Many people just think of the visible tactical activity when talking about marketing - paid socials, events and collateral, but this is only one small part of how marketing should be viewed.
I have a simple framework I use to explain how marketing works which you might find as a useful prompt for thinking about what you need to include in your marketing budget.
Build a Marketing Engine
Strategy & Direction: from a budgeting sense this might include customer research, new product development, new market investigation or a competitive analysis
Systems & Processes: whether you are working on a spreadsheet, or are all into a full marketing stack of CRM, AI, automations, project management, communications etc.. These are the tools and processes you use to make things happen effectively
People & Resources: include your internal and external marketing team, any agencies or contractors you work with, consultants, or specialists. I also include anything you need to grow your team, such as upskilling or recruitment, plus tools such as the development of sales decks, templates, collateral etc.
Tactics & Activity: this is the section most people are familiar with. Before rolling over to do the ‘same again’, a wee word of warning….don’t make an assumption that what has worked in the past will always be working for you, marketing is an ever-changing beast and you might need to try new things
This diagram might be helpful (NB it’s from Salesforce, so is from enterprise organisations, rather than small and mid-sized ones).
How Much?
Sorry, there is no absolute answer to this, but, having tracked this over the last few years, estimations of spend on marketing for B2B and technology companies typically varies between 5-12% of revenue.
There are a range of things to consider when thinking about how much to allocate:
How competitive is your market, where do you sit now and where do you want to sit?
What are your growth goals this year and compared with previous years?
Are you bringing a new offering to a market that understands your offering, or are you having to create and explain the sector as well as promote your offering?
For example: a startup entering a new market might allocate 10-12% of revenue to marketing, while an established company focused on customer retention might allocate 5-7%.
These percentages seem a relatively broad range, but appear to be remarkably consistent between New Zealand and globally.
Measuring It
I’m going to make an assumption that you have reviewed the effectiveness of your marketing and sales efforts from this (your previous) financial year, before identifying what you need to do next year. If not - don’t forget to do that, or you could be throwing good money away, or missing out on opportunities to go harder.
Looking forward, track your marketing and sales metrics to help you understand your effort and budget is going on the things that are making a difference.
If there are big projects in your plan this year with a bigger price tag, it might make sense to have a stage-gate approach. Break down large projects into smaller phases, with clear objectives and decision points at each stage. Review if you have achieved these objectives before moving to the next phase and releasing more within budget.
To work out where to invest your money this year download the Marketing Budget Planning Checklist.
I’d love to hear back from you with any questions or feedback on this topic. Please get in touch if you need help setting your budget, or to build and deliver a marketing and sales plan that links to your business objectives.
Get In Touch
I provide leadership, support and direction for growing Kiwi tech and innovation companies as your 'fractional' (part-time) Chief Marketing Officer (CMO) - an affordable way to get senior thinking and direction for businesses.
If you could do with some help to grow your business, get in touch
Helen Shorthouse
Fractional Chief Marketing Officer (CMO)