# How to Create a Marketing Budget: The Complete Planning Guide > A step-by-step marketing budget planning guide for CMOs in 12 chapters: benchmarks, budgeting methods, CPA targets, categories, approval and budget vs actual. Written by [Aleksandra Korczynska](https://us.linkedin.com/in/aleksandra-korczynska-b6ab8485) — CMO with 10+ years experience managing marketing budgets at B2B SaaS companies. - Canonical HTML version: https://www.etropo.com/marketing-budget-planning-guide - Last updated: Sep 2026 - 12 chapters, each with its own `.md` twin linked below --- ## Quick answer Source: https://www.etropo.com/marketing-budget-planning-guide#quick-answer To create a marketing budget, start from last year’s spend and conversions, agree the growth target and your budget autonomy with the CEO, choose a budgeting method (objective-and-task to build, percentage of sales to check), set one key conversion metric and a CPA target, structure the budget into three to eight categories with owned line items, analyze it with six standard charts, then get sign-off from finance in their cost-center format. The average marketing budget is 11.4% of the total company budget (6.7 to 7.4% for B2B, 11.7 to 21.5% for B2C, CMO Survey 2025), and the planning cycle takes eight to ten weeks. Key takeaways: - Marketing needs its own budget structure, organized by category, channel and goal, with a translation layer to finance’s cost centers. - Benchmark first: marketing averages 11.4% of total company budget; B2B companies 6.7 to 7.4%, B2C 11.7 to 21.5% (CMO Survey 2025). - One key conversion metric and a blended CPA target drive every allocation decision; paid channels should return at least 4:1. - Keep three to eight categories. Headcount, contractors, paid media, promotion and tools are the must-haves; never use “Other”. - Build one plan aligned with the agreed strategy. Use budget versions later to show the effect of cuts, not as upfront hedges. - Track actuals monthly by channel, keep line items within ±5% of plan, and reallocate freely inside approved quarterly and annual totals. --- ## Chapters Source: https://www.etropo.com/marketing-budget-planning-guide#chapters 1. [Benchmark Your Company](https://www.etropo.com/marketing-budget-planning-guide/benchmark-your-company.md) 2. [Stakeholder Alignment](https://www.etropo.com/marketing-budget-planning-guide/stakeholder-alignment.md) 3. [Finance Team Rules](https://www.etropo.com/marketing-budget-planning-guide/finance-team-rules.md) 4. [Budgeting Methods](https://www.etropo.com/marketing-budget-planning-guide/budgeting-methods.md) 5. [The 70/20/10 Rule](https://www.etropo.com/marketing-budget-planning-guide/70-20-10-rule.md) 6. [Planning Process and Timeline](https://www.etropo.com/marketing-budget-planning-guide/planning-process-and-timeline.md) 7. [KPIs and CPA Targets](https://www.etropo.com/marketing-budget-planning-guide/budget-kpis-and-cpa-targets.md) 8. [Budget Categories and Allocation](https://www.etropo.com/marketing-budget-planning-guide/budget-categories.md) 9. [Marketing Budget Examples](https://www.etropo.com/marketing-budget-planning-guide/marketing-budget-example.md) 10. [Budget Approval](https://www.etropo.com/marketing-budget-planning-guide/budget-approval.md) 11. [Budget vs Actual Tracking](https://www.etropo.com/marketing-budget-planning-guide/budget-vs-actual.md) 12. [Budget Cuts and Reallocation](https://www.etropo.com/marketing-budget-planning-guide/budget-cuts-and-reallocation.md) --- ## CMO homework Source: https://www.etropo.com/marketing-budget-planning-guide#cmo-homework What to know before the first line item: where you stand against benchmarks, what the CEO expects, and what finance needs. ### 1. Benchmark Your Company Source: https://www.etropo.com/marketing-budget-planning-guide#benchmark-your-company *How Much Should a Marketing Budget Be? Benchmark Your Company Before You Plan* — ~5 min read. Full chapter: https://www.etropo.com/marketing-budget-planning-guide/benchmark-your-company.md (HTML: https://www.etropo.com/marketing-budget-planning-guide/benchmark-your-company) The CMO Survey 2025 puts the average marketing budget at 11.4% of the total company budget across 170 companies: 7.4% for B2B product companies, 6.7% for B2B services, 21.5% for B2C product and 11.7% for B2C services. Growth-stage companies sit above their sector average, mature ones below it. Use the benchmark as a ceiling check on the plan you build bottom-up, not as the plan itself. The interactive calculator in this chapter returns the average for your share of online sales, industry, revenue band and headcount; the full industry breakdown with additional sources lives in the benchmarks analysis. ### 2. Stakeholder Alignment Source: https://www.etropo.com/marketing-budget-planning-guide#stakeholders-alignment *Aligning With Your CEO Before You Plan: Growth Approach, Budget Autonomy and the Questions to Ask* — ~7 min read. Full chapter: https://www.etropo.com/marketing-budget-planning-guide/stakeholder-alignment.md (HTML: https://www.etropo.com/marketing-budget-planning-guide/stakeholder-alignment) Before planning, find out what is expected. Companies follow an exploratory, balanced or conservative growth approach, and your CEO’s answers to five questions (targets and ownership, risk appetite, whether 100% is a floor or a stretch, acceptable payback period, flexibility after approval) tell you which one you are in. Then establish your autonomy: full autonomy, guided autonomy within a range, allocation only, or strict control. Match the planning effort to that level, confirm the approval path and the number of versions expected, and push for a 30-minute strategy meeting before the budget file is submitted. ### 3. Finance Team Rules Source: https://www.etropo.com/marketing-budget-planning-guide#learn-finance-team-rules *What Finance Expects From a Marketing Budget: Cost Centers, Currencies, Tax Properties and Compensation Rules* — ~9 min read. Full chapter: https://www.etropo.com/marketing-budget-planning-guide/finance-team-rules.md (HTML: https://www.etropo.com/marketing-budget-planning-guide/finance-team-rules) Finance budgets track cost centers and cash flow; a marketing budget has to be organized around goals, channels and initiative status to be useful for decisions. The two coexist through a translation layer: you plan in your structure and export in theirs. Collect finance’s rules before the first line item: the spreadsheet template and level of detail, the cost center list with GL accounts, whether exchange rates are fixed company-wide or market-based (add a 3 to 5% buffer if the latter), the tax properties each vendor line needs (VAT, region, certificate of residence), whether a 3 or 5 year horizon is required, and how salaries, raises and bonuses are handled. --- ## Build your budget plan Source: https://www.etropo.com/marketing-budget-planning-guide#build-your-budget-plan How the number is set, how the year is planned, and how the budget is structured down to the line item. ### 4. Budgeting Methods Source: https://www.etropo.com/marketing-budget-planning-guide#budgeting-methods *Marketing Budgeting Methods: Percentage of Sales, Objective-and-Task, Top-Down vs Bottom-Up, Zero-Based* — ~9 min read. Full chapter: https://www.etropo.com/marketing-budget-planning-guide/budgeting-methods.md (HTML: https://www.etropo.com/marketing-budget-planning-guide/budgeting-methods) There are six common ways to arrive at the marketing budget number. Percentage of sales multiplies expected revenue by a benchmark share (the CMO Survey average is 11.4% of total company budget). Objective-and-task works backwards from the growth target through the funnel to the spend those conversions cost. Competitive parity copies the market, the affordable method spends what is left, and zero-based budgeting rebuilds every line item from scratch each cycle. None of them is used alone by a competent CMO. The guide’s recommendation is objective-and-task to build the plan, a percentage-of-sales check against benchmarks to sanity-test the total, and zero-based discipline on variable spend in a cost-pressure year. Top-down and bottom-up are not methods but directions: the CEO gives the envelope, channel owners build the line items, and the two meet in target setting. ### 5. The 70/20/10 Rule Source: https://www.etropo.com/marketing-budget-planning-guide#70-20-10-rule *The 70/20/10 Rule for Marketing Budgets: What It Means and When to Ignore It* — ~7 min read. Full chapter: https://www.etropo.com/marketing-budget-planning-guide/70-20-10-rule.md (HTML: https://www.etropo.com/marketing-budget-planning-guide/70-20-10-rule) The 70/20/10 rule allocates 70% of the marketing budget to channels and programs with a proven CPA, 20% to promising bets adjacent to what already works (a new market for a working channel, a new format on a working platform), and 10% to experiments with no track record. It is the most-asked marketing budget question on ChatGPT and a People Also Ask box on every budget search, and it is a portfolio heuristic, not a benchmark. It works when the 70% is genuinely proven and every bet in the other 30% carries an evaluation timeline. It fails in a cost-cutting year (the experimental share is the first thing finance removes, and 80/15/5 is closer to reality), in an early-stage company where nothing is proven yet, and when it is applied to categories such as headcount and tools that are not bets at all. Apply it to acquisition spend, tag line items new or existing, and review the split quarterly. ### 6. Planning Process and Timeline Source: https://www.etropo.com/marketing-budget-planning-guide#last-year-analysis *Marketing Budget Planning Process: Timeline, Milestones and Who Does What* — ~9 min read. Full chapter: https://www.etropo.com/marketing-budget-planning-guide/planning-process-and-timeline.md (HTML: https://www.etropo.com/marketing-budget-planning-guide/planning-process-and-timeline) Most companies run a four-stage budget cycle: department planning, HR/finance/board review, revisions, final sign-off. Finance sets those deadlines. The part you control is the first stage, and it splits into seven phases: baseline proposal, growth initiatives review, target setting, resource mapping, plan analysis, pitch preparation and submission. Together they take three to four weeks of marketing work inside an eight to ten week cycle. Start with last year: budget versus actual by category, budget growth against revenue growth, and which stakeholder questions forced revisions. Then hand line items to the channel owners who know their CPAs, set one deadline for their proposals, and build a single plan aligned with the strategy the CEO already agreed to. Budget versions come later, to show the effect of cuts, not as a way to hedge upfront. ### 7. KPIs and CPA Targets Source: https://www.etropo.com/marketing-budget-planning-guide#define-key-metrics *How to Set CPA Targets for Your Marketing Budget: Blended vs Channel CPA, LTV and ROI* — ~7 min read. Full chapter: https://www.etropo.com/marketing-budget-planning-guide/budget-kpis-and-cpa-targets.md (HTML: https://www.etropo.com/marketing-budget-planning-guide/budget-kpis-and-cpa-targets) Every marketing budget optimizes for one key conversion metric: MQLs or SQLs for sales-led B2B, signups for product-led, purchases for e-commerce. Blended CPA is total marketing spend divided by conversions in that metric, and it should fall year over year as channels scale. Channel CPAs sit well above and below the blend; PPC at $500 per MQL next to organic at $50 and a $150 blend is a healthy mix, not a problem. Work backwards from the revenue target to get the CPA target: revenue goal, average contract value, customers needed, funnel conversion rates, conversions needed, and only then the budget those conversions cost at last year’s CPA. Hold paid channels to at least 4:1 lifetime revenue to spend, and skip LTV by channel unless you acquire enough customers for the averages to mean anything. ### 8. Budget Categories and Allocation Source: https://www.etropo.com/marketing-budget-planning-guide#create-budget-structure *Marketing Budget Categories: How to Structure Line Items and Allocate by Channel* — ~12 min read. Full chapter: https://www.etropo.com/marketing-budget-planning-guide/budget-categories.md (HTML: https://www.etropo.com/marketing-budget-planning-guide/budget-categories) Set the structure before the first line item, so the budget can later be analyzed by owner, goal, category and continuity. Five categories are must-haves: headcount, contractors, paid media, promotion and tools. Keep the total between three and eight, merge anything under five percent of spend into a neighbour, and never create an “Other” bucket. Each line item carries eight properties: cost center, owner, currency, fixed or variable, new or existing, business goal, recurring frequency and status. Set the total budget from year-over-year growth aligned to the KPI target before allocating, then map channels by last year’s conversions, CPA and scalability, funding the ones that move the key metric. ### 9. Marketing Budget Examples Source: https://www.etropo.com/marketing-budget-planning-guide#marketing-budget-example *Marketing Budget Example: Three Worked Budgets by Category and Channel* — ~10 min read. Full chapter: https://www.etropo.com/marketing-budget-planning-guide/marketing-budget-example.md (HTML: https://www.etropo.com/marketing-budget-planning-guide/marketing-budget-example) A marketing budget example is only useful if it shows the structure, not just the total. Three worked B2B SaaS budgets, at $250k, $1M and $5M, each split into the five must-have categories: headcount stays around 40 to 44% at every size, paid media grows from 22% to 30% as channels prove out, contractors and agencies fall from 18% to 14% as work moves in-house, and tools shrink from 8% to 6% of the total as the budget scales. The $1M budget is then shown by channel (paid search, paid social, content and SEO, events, partners, creative production), by quarter (back-loaded 20/25/25/30 to match seasonality and Q4 pipeline), and as eight sample line items with the owner, cost center, fixed or variable, goal and continuity properties finance will ask about. Use the industry templates to start from a version closer to your own company. --- ## Get budget approval Source: https://www.etropo.com/marketing-budget-planning-guide#get-budget-approval The self-review, the team review, and what the CEO, board and finance each need to sign off. ### 10. Budget Approval Source: https://www.etropo.com/marketing-budget-planning-guide#budget-charts *How to Get Your Marketing Budget Approved: Presenting to the CFO and Board* — ~8 min read. Full chapter: https://www.etropo.com/marketing-budget-planning-guide/budget-approval.md (HTML: https://www.etropo.com/marketing-budget-planning-guide/budget-approval) Approval is won before submission. Run the six standard charts on your own plan first: budget versus conversions year over year, quarter over quarter and H1 versus H2, new versus existing initiatives, breakdown by category, breakdown by goal, and marketing as a percentage of revenue. Anything you cannot defend, fix in the plan rather than in the meeting. The CEO and board get a short deck built on those charts. Finance gets the export in their format: cost center IDs, currency, VAT, payment terms, vendor details. Then expect the same six questions every year, from headcount growth to “can you cut 10%?”, and have the answers and the cut version ready before they are asked. --- ## Execute and track Source: https://www.etropo.com/marketing-budget-planning-guide#execute-and-track Tracking actuals against plan every month, and moving or cutting budget without losing credibility. ### 11. Budget vs Actual Tracking Source: https://www.etropo.com/marketing-budget-planning-guide#automate-actuals-tracking *Marketing Budget vs Actual: How to Track Variance by Channel Every Month* — ~8 min read. Full chapter: https://www.etropo.com/marketing-budget-planning-guide/budget-vs-actual.md (HTML: https://www.etropo.com/marketing-budget-planning-guide/budget-vs-actual) Finance reports monthly totals a month late and without channel detail, so marketing needs its own actuals. Three formulas do the work: monthly variance (actual minus planned), year-to-date deviation, and available budget (annual budget minus YTD actual minus committed spend). Within ±5% on a line item, no action; 5 to 10%, explain it; above 10%, reallocate or reforecast. Keep the tracking from becoming a copy-paste job: pull Google Ads, LinkedIn and Meta spend automatically, forward invoices to an inbox that extracts and matches them to line items, and let owners get reminded about the items they own. Log every variance with a reason, whether reallocation is needed, its status and a comment, so the monthly review is reading, not building. ### 12. Budget Cuts and Reallocation Source: https://www.etropo.com/marketing-budget-planning-guide#move-dollars-around *Marketing Budget Cuts: What to Cut, What to Protect, and How to Reallocate Mid-Year* — ~9 min read. Full chapter: https://www.etropo.com/marketing-budget-planning-guide/budget-cuts-and-reallocation.md (HTML: https://www.etropo.com/marketing-budget-planning-guide/budget-cuts-and-reallocation) Once the budget is approved you can move money between line items, categories and even cost centers, as long as quarterly and annual totals hold. The board judges you on revenue targets, effective spend and delivered growth, not on whether paid social in Q3 matched the plan. Move budget from channels above target CPA to those below it, and do not sit on unspent budget until Q4. Mid-year cuts usually follow a missed H1 target, a runway extension, new leadership or investor pressure. Optimize first (channel mix, quick wins, tool consolidation). If that does not close the gap, cut in order: operational spend, then non-acquisition programs, then fixed acquisition costs like subscriptions and retainers. Never cut a flat percentage across everything, and present the reduced version in finance’s cost-center language with an evaluation timeline per surviving bet. --- ## Frequently asked questions Source: https://www.etropo.com/marketing-budget-planning-guide#faq ### What is a marketing budget? A marketing budget is the approved amount a company will spend on marketing over a period, usually a fiscal year, broken into categories such as headcount, contractors, paid media, promotion and tools, and into line items with owners. It is planned against a conversion target and tracked monthly against actual spend. ### How much should a marketing budget be? The CMO Survey 2025 puts the average at 11.4% of total company budget: 7.4% for B2B product companies, 6.7% for B2B services, 21.5% for B2C product and 11.7% for B2C services. Growth-stage companies spend more, mature ones less. Use the [marketing budget calculator](https://www.etropo.com/marketing-budget-calculator) for a range based on industry, revenue and growth target, and the [benchmarks by industry](https://www.etropo.com/blog/marketing-budgeting/average-marketing-budget-by-industry) for the full breakdown. ### What is the 70/20/10 rule for a marketing budget? The 70/20/10 rule puts 70% of the budget into proven channels and programs, 20% into promising bets adjacent to what already works, and 10% into experiments. It is a portfolio heuristic rather than a benchmark. Under cost pressure most teams drift toward 80/15/5, and in a growth year the experimental share can justifiably be higher, as long as every bet has an evaluation timeline. ### What is the 3-3-3 rule for marketing? There is no single definition. The most common version says test three channels, with three messages, for three months before judging results. Treat it as a testing cadence for new initiatives, not as a way to split the budget; the guide’s approach is one new initiative per quarter, evaluated within that quarter. ### Top-down or bottom-up: which is better for a marketing budget? Use both. Top-down gives you the envelope (a growth target and a percentage-of-revenue range from the CEO or board); bottom-up builds the line items from channel CPAs, conversion targets and resource needs. Reconcile them in the target-setting phase. A pure top-down number ignores channel capacity; a pure bottom-up plan usually overshoots what finance will approve. ### How long does it take to plan a marketing budget? Eight to ten weeks end to end: three to four weeks of marketing work (baseline, initiatives, targets, resource mapping, analysis, pitch) and the rest in finance and board review with one or two revision rounds. Start about three months before the fiscal year begins. ### What is the difference between a marketing budget and a marketing plan? The marketing plan states what you will do and why: targets, audiences, channels, initiatives. The marketing budget states what it costs, by category and line item, and how spend is phased across the year. Plan the initiatives and their expected impact first, then budget the resources needed to execute them. --- ## Links - Marketing budget planning guide (HTML): https://www.etropo.com/marketing-budget-planning-guide - Marketing budget software: https://www.etropo.com/marketing-budget-software - Marketing budget calculator: https://www.etropo.com/marketing-budget-calculator - Marketing budget templates: https://www.etropo.com/marketing-budget-template - Marketing budget benchmarks by industry: https://www.etropo.com/blog/marketing-budgeting/average-marketing-budget-by-industry - Marketing salaries: https://www.etropo.com/marketing-salaries.md - Marketing tool prices: https://www.etropo.com/marketing-tool-prices - Pricing: https://www.etropo.com/pricing.md - Documentation: https://docs.etropo.com - Website: https://www.etropo.com