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Marketing Budget Calculator: How Much to Spend

By 1920 Agency Editorial Team · Reviewed by Rana Zain Usman · Updated 4 November 2026

The short answer

Multiply your annual revenue by a marketing share and divide by 12. The CMO Survey's 2025 report puts the average US company at 9.4% of revenue: 6.4% for businesses selling products to other businesses, 9.0% for B2B services, 15.5% for consumer products and 6.0% for consumer services. Then check that budget against your cost to win a customer, because a share of revenue says nothing about whether the spend pays back.

Your business Currency Annual revenue $ Last year's, or your forecast for this year. What you sell, and to whom Averages from The CMO Survey 2025, US companies. Share of revenue for marketing %

What the budget buys (optional) Share for paid ads % The rest covers people, content, SEO, tools and agencies. Cost to win one customer $ All marketing spend ÷ new customers, from last year. Revenue from a new customer's first year $

Your marketing budget

A month–

A year–

Paid ads a month–

Everything else a month–

New customers it can win a month–

Their first-year revenue–

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How the calculator works

The calculator sets a budget the way most businesses do, as a share of revenue, and then checks it against the way it should be judged: what it costs to win a customer.

What	Formula
Marketing budget a year	Annual revenue × marketing share
Marketing budget a month	Annual budget ÷ 12
Paid ads a month	Monthly budget × paid ads share
New customers it can win a month	Monthly budget ÷ cost to win one customer
Their first-year revenue	New customers × first-year revenue per customer

A worked example: a business with $1,000,000 of revenue at the all-company average of 9.4% has $94,000 a year, about $7,833 a month. If it costs $400 in marketing to win a customer, that wins about 19.6 customers a month. If each brings $2,000 in the first year, that is about $39,167 of new first-year revenue each month, or $5 for every $1 spent.

What companies spend on marketing, 2025

The default shares come from The CMO Survey, which is sponsored by Deloitte, Duke University's Fuqua School of Business and the American Marketing Association. Its 2025 Highlights and Insights Report surveyed marketing leaders at US for-profit companies between January 21 and February 12, 2025. 281 of the 2,047 invited took part, a 13.7% response rate.

Business type	Marketing as % of revenue	Marketing as % of company budget
All companies	9.4%	11.4%
Products to businesses (B2B product)	6.4%	7.4%
Services to businesses (B2B services)	9.0%	6.7%
Products to consumers (B2C product)	15.5%	21.5%
Services to consumers (B2C services)	6.0%	11.7%

Two limits to keep in mind. The survey asks marketing leaders, so its companies mostly have one, which leans the sample toward larger firms than most small businesses. And it is an average of what companies do, not proof that the figure is right for them.

The "SBA says 7-8%" rule is not on the SBA's site

Many marketing budget pages say the US Small Business Administration recommends spending 7-8% of revenue. We could not find that on sba.gov. The SBA's blog post How to get the most from your marketing budget, by Rieva Lesonsky in July 2019, says: "There's no hard and fast answer to how much your marketing budget should be." It suggests basing the budget on a share of sales and quotes two other sources: Small Business Trends, for the average business spending 1.08% of revenue on advertising, and Web Strategies, for average marketing spending of 7.9% of revenue in 2018. We could not trace the 7-8% figure to the SBA itself.

A share of revenue is easy to set and easy to defend, but it has two weaknesses. It shrinks when sales fall, just when more marketing might help. And it says nothing about whether the money comes back. So once you have a figure, test it:

Find your cost to win a customer. Divide last year's total marketing spend by the new customers it brought. For ads alone, our cost per lead calculator gets you there from leads and close rate.
Compare it with what a customer brings. If a customer's first-year revenue, after costs, is more than the cost to win them, more budget can mean more growth. If not, spending more loses more. Fix the cost per customer first.
Plan the paid part. Turn the ads share into campaigns with our ad budget calculator, and check its limits with the break-even ROAS calculator.

If SEO is part of the plan, our SEO ROI calculator shows when that spend pays back, and our guide to what SEO costs a small business shows what it costs to buy.

Sources

All checked November 4, 2026.

The CMO Survey, Highlights and Insights Report 2025, pages 5 and 21-22.
US Small Business Administration, How to get the most from your marketing budget, Rieva Lesonsky, July 9, 2019.

Frequently asked questions

How much should a small business spend on marketing?

There is no single right figure. The US Small Business Administration's own blog says there is no hard and fast answer and suggests basing the budget on a share of sales. The CMO Survey's 2025 average for US companies is 9.4% of revenue, but its sample leans toward larger firms, so treat it as a reference and test it against your cost to win a customer.

Does the SBA recommend spending 7-8% of revenue on marketing?

Not on its own site. Many pages credit the SBA with a 7-8% rule, but the SBA blog post on marketing budgets, written by Rieva Lesonsky in July 2019, says there is no hard and fast answer. That post quotes other sources: Small Business Trends for advertising at 1.08% of revenue, and Web Strategies for marketing at 7.9% of revenue in 2018.

What percentage of revenue do B2B companies spend on marketing?

In The CMO Survey 2025, companies selling products to businesses spent 6.4% of revenue on marketing and companies selling services to businesses spent 9.0%. Consumer product companies spent the most, at 15.5%.

Should a new business spend more on marketing?

Often, because it has to win every customer from nothing and its revenue is small, so a share of last year's revenue gives too little. A new business can work from the goal instead: the customers it needs a month times what it costs to win one. The calculator shows both.

How should I split a marketing budget?

Start from where your customers come from today and what each channel costs per customer. A business that wins most customers from search might put more into SEO and Google Ads; one that sells on impulse might weight social ads. Set the paid ads share in the calculator to see the split in money.