How Much Should I Spend on Marketing? A 2026 Guide
How Much Should I Spend on Marketing? A 2026 Guide
“How much should we spend on marketing?” is one of those questions that sounds simple yet shapes everything from quarterly targets to long-term brand health. You might be hoping for a neat percentage. You will get one soon, along with a way to make that number fit your company, your goals, and your market.
If you want a ballpark: many established companies land somewhere between 5 and 12 percent of revenue, with consumer brands typically at the higher end and B2B firms lower. Startups and new product launches often go well beyond that range because growth, not last year’s sales, sets the pace.
Those ranges are useful. They are not a plan. A plan starts with what you are trying to achieve, then turns those objectives into activities, timelines, and costs you can track.
Five ways companies decide “the number”
Most budgeting conversations begin with one of these models. The smartest teams blend them.
| Method | What it is | Where it shines | Watch-outs |
|---|---|---|---|
| Percentage of sales | Spend a fixed share of current or forecast revenue | Stable, mature businesses that want budgets to scale with size | Can starve marketing during a downturn, ignores opportunity spikes |
| Objective and task | Define goals, list tasks to reach them, cost the tasks, total becomes the budget | Product launches, clear KPI targets, teams that plan precisely | Time-consuming, needs decent forecasting and cost data |
| Competitive parity | Match category spend or share of voice | Markets where being outspent quickly erodes visibility | Herd mentality, competitors may be wrong for your situation |
| Affordable | Spend what is left after other costs | Bootstrapped phases, survival mode | Strategy blind, risks chronic underinvestment |
| ROI or analytics-driven | Allocate to channels with proven or modelled returns | Data-rich teams, performance-led growth | Requires reliable data and models, can bias toward short-term wins |
Most New Zealand firms end up using a hybrid. A percentage-of-revenue anchor for predictability, topped up by objective-and-task for launches, and continually adjusted with ROI data is a common pattern.
The right number depends on who you are
Two retailers may have the same revenue but very different marketing needs. Context matters.
Company size and stage. Large, mature organisations often operate at single-digit percentages because their brands already carry weight. Early-stage tech or e-commerce ventures can justify 20 to 40 percent against revenue, especially while building a customer base or entering Australia for scale.
Industry. Consumer categories that live on reach and recall, like FMCG, fashion, and automotive, tend to invest heavily in brand and mass media. Niche B2B manufacturers often spend far less, channelling funds into events, search, and account-based programmes.
Growth path. If the brief is new market entry, you spend to be seen. If the brief is margin recovery, you cut waste and double down on proven channels. A product at maturity usually gets maintenance-level budgets, while a new category needs education, sampling, and bigger waves of media.
Brand equity. High-equity brands can maintain awareness with lower spend. Low-awareness or recently rebranded companies must buy reach and frequency just to be considered.
New Zealand reality. Our market is compact, media buys can be efficient, and word-of-mouth is powerful. Yet scale can be a challenge, so many NZ brands blend domestic brand-building with lower-cost digital performance to tap Australian and global demand.
Factors that should move your budget up or down
Economic signals always find their way into budgets, even when they should not. Some signals are worth acting on.
- Inflation pressure easing or intensifying
- Competitor share-of-voice spikes
- Channel performance swings after privacy changes
- Fast-moving category trends
- Regulatory requirements that add compliance costs
Cutting spend is sometimes prudent. Cutting blindly often hurts long-term growth. Research across cycles shows firms that keep brand investment steady during tough periods tend to bounce back stronger on share and profitability.
Set the split: short-term results and long-term brand
You do not need a giant media budget to think in two horizons. You do need a deliberate split.
Here is a simple template you can tune by product, margin, and growth ambition:
- Performance (near-term revenue): Search, shopping ads, affiliates, retargeting, direct response. These tactics feed the forecast now. Many teams set 40 to 70 percent here, guided by cost per acquisition and payback rules.
- Brand (longer-term demand): Video, sponsorships, PR, always-on creative, brand-led social. A common range is 30 to 50 percent. Cutting this line first often looks smart only on this quarter’s spreadsheet.
- Testing and learning: New channels, creative concepts, audience segments. Reserve 5 to 10 percent as a flexible test pot. Small bets, fast readouts.
In New Zealand’s smaller media market, brand can punch above its weight through consistent creative and well-chosen partnerships. A national TV burst may be out of reach for some, yet integrated video and outdoor, backed by digital reach, often gives efficient coverage.
Turn goals into dollars with two numbers: CAC and LTV
If you take one quantitative step, make it this. Define your acceptable customer acquisition cost (CAC) and your expected lifetime value (LTV). Then let those two numbers govern how much you are willing to spend to hit targets.
A simple example. Say your average online order is $120, gross margin is 50 percent, and the average new customer buys twice in the first year. LTV on year one margin is 120 x 0.5 x 2 = $120. If you require a 3:1 LTV to CAC ratio on first-year margin, your CAC ceiling is $40. To add 10,000 customers, your performance budget should be near 10,000 x $40 = $400,000. Layer brand investment on top to sustain demand and reduce future CAC.
For B2B, swap orders for pipeline. If an average deal is $60,000 with 60 percent gross margin and your historical close rate from marketing qualified leads is 20 percent, backsolve how many leads you need and the cost per lead that keeps payback within your target window.
Objective-and-task fills in the rest. If you know you need 12 million impressions to hit a recall KPI, cost the media and creative. If you need 15 events to reach enterprise buyers, price the stands, travel, and follow-up. This is the part that makes the percentage-of-revenue rule feel blunt.
Choose channels with cost structure in mind
Channel mix quietly sets your spend level. Some choices lock in big fixed costs, others scale up and down weekly.
Digital. High measurement, granular targeting, and controllable spend. Ideal for performance, incremental reach, and rapid testing. Privacy changes can affect ROI in social and programmatic, so build your own audiences where possible.
Traditional. TV, radio, print, and outdoor still build broad reach efficiently in many categories. They need production and committed buys, so plan early and keep creative platforms consistent to get compounding value.
Experiential and sponsorships. Trade shows, sports partnerships, community events. Pricier per touchpoint, yet powerful for memory structures and trust. Budget for activation, not just fees.
Channel economics should be transparent in your plan. Scope creative once, resize many times. Reuse assets across platforms to lift effective frequency without ballooning production costs.
Make timing a lever, not an afterthought
Spend where demand is. Retail and travel are obvious examples, yet even B2B has cycles. Align budgets to peak seasons, launches, and moments when your category earns attention. In practice, this means front-loading spend into weeks where your share of search spikes, and easing off when attention is elsewhere.
Weekly and monthly reallocation keeps you honest. Budget-agile teams review results frequently, shift funds from weak to strong tactics, and keep a small buffer to back winners. That agility does not happen by accident, it comes from pre-agreed rules with finance and clear KPIs.
A practical 90-day budgeting workflow
Start simple, build discipline, and the numbers get sharper each quarter.
- Set outcomes. Revenue, leads, awareness, share-of-voice by market, with targets and timeframes.
- Fix your split. Decide performance, brand, and test percentages that fit those outcomes.
- Cost the plan. Channels, creative, agency time, tools, events, with a 5 to 10 percent contingency.
- Define guardrails. CAC and payback thresholds, channel caps, minimum brand-level funding.
- Book and brief. Lock media that needs long lead times, brief creative, prepare assets in reusable formats.
- Instrument measurement. Dashboards, attribution, brand tracking, incremental tests.
- Reallocate on cadence. Weekly for performance, monthly for the overall mix, quarterly to reset the model.
When the economy wobbles, keep your head
Cuts across the board feel fair. They rarely are. You get better results by trimming low-return lines and protecting the activities that prop up future demand. During pressure periods, keep a baseline brand presence, and use performance budgets with tighter CAC rules. Raise the test bar, do not shut testing down.
If competitors go quiet, you can buy share of voice more cheaply. If they flood channels with heavy spend, meet them where it matters rather than mirroring them everywhere. Parity is a tool, not a law.
What good looks like on paper
A fit-for-purpose plan is visible at a glance. It links dollars to outcomes, shows how money shifts over time, and tells you what success looks like before you spend a cent.
- Clear KPIs: Targets by channel and objective, with both immediate and brand metrics.
- Transparent math: CAC ceilings, LTV assumptions, media CPMs, production costs.
- Adaptive rules: Triggers to scale up winners, thresholds to pause underperformers.
- Documented splits: Performance vs brand vs test, by product and region.
One page can hold the essentials: the objective, the split, the numbers that justify it, the dates you will review. The supporting sheets can carry the line items.
How much, then?
Use a range as your starting point. If you are an established NZ B2B firm with moderate growth goals, 5 to 8 percent of revenue often covers performance and a steady brand base. A consumer brand with national ambitions will usually need 8 to 15 percent to keep reach and mental availability high. If you are launching, entering a new market, or trying to reset your growth curve, plan for a higher percentage or even a budget anchored to acquisition targets rather than revenue.
Then move from range to plan. Tie spend to goals, cost the work, set your split, and measure like a hawk. As your data improves, shift more of your allocation using ROI evidence and less by habit. That is how a budget stops feeling like a guess and starts working like an investment.