Here in the middle of annual planning, most CMOs are asking for benchmarks to help justify their investments.
It’s hard to get real-world data that applies specifically to your context. You can pay IDC to run a custom study, but it’s expensive. You can look at Insight Partner’s data, but it’s from the beginning of the year and has a higher mix of earlier-stage companies. You can go person-to-person, asking for their private mix, but it’s time-consuming. Additionally, the many factors of company strategy change the investment mix and make it hard to compare (B2B vs B2C, product-led vs. sales-led, company size, are SDRs inside or outside of marketing?)
I wrote earlier this year about justifying your spend with CAC ratios to better align spend to revenue, and highly recommend that strategy. While we would all love to do more detailed ROI-based budgeting, it remains difficult for a number of reasons. And so, budget benchmarks can be a useful tool in planning.
Take The Survey!
This year, Ray Rike, Jon Miller, Bill Macitis, and I have come together to survey our networks for the 2024 data we would want to see for at-scale marketing budgets. TAKE THE SURVEY HERE - it should take no longer than 7 minutes.
To thank you for your support on the survey (Please take it!) I provide budget insights and tips you can use today, below.
Benchmarks
Last year, I personally called and then surveyed a number of at-scale CMOs for their budget details and cross-referenced all past and present benchmarks I could find. I combined this with my knowledge of budgets from all of my personal budgets and advisory clients’. Because I didn’t consider my sample sizes statistically significant, I published the following benchmark guide as “my very informed guesstimates.”
In my early discussions with CMOs this year, many of these are still holding - despite some oddities from company layoffs or late-year program adjustments for companies balancing budgets:
Consider the following as you compare your company to the benchmarks above (and those we publish after you TAKE THE SURVEY)
Strategy - Atlassians spent much less on marketing than peer companies because we were trying to invest twice as much as peers in product (see fascinating charts here). Some companies I know that are inbound-based have much different ratios of people / programs - they spend more on converting than on advertising. The strategy of your company and what works in your market will change budget distribution choices.
Large companies tend to spend less as a % of revenue - they already have the infrastructure in place, and they have greater market awareness than early-stage startups trying to be seen for the first time. At Oracle, we often spent 2-3% of forward-year revenue, while IBM was spending 5% at the time.
Higher growth companies *may* have higher marketing % of revenue as they are trying to rapidly prime the pump to get recognized and take market share quickly. The exception is that some efficient, word-of-mouth products/companies don’t spend as much - the viral nature of the products does much of the advertising for them at a MUCH cheaper price (OpenAI would be a prime example).
Model matters. Product-led-growth companies might spend differently than sales-assisted companies. Trying to do both at once is the most expensive.
Average deal size matters - companies with a lower average sales price might rely more on marketing to drive revenue, whereas companies with a higher average sales price may rely more on the sales team and less on marketing.
What’s in and out of the buckets? I’ve seen budgets for many different companies. Sometimes, BDR / SDR budgets are included in marketing, sometimes not. Some companies include hosting costs for free / trial users in the total costs of marketing, and some do not. Some companies have a higher composition of growth-hacking in marketing vs. product. It’s tricky to get a clean comparison.
How much is AI driving up tech budgets? It’s possible that companies have increased their tech budget even more significantly than my guesstimate from last year - Forrester reports a marketing budget mix of 23% on tech, 35% on personnel, and 42% on programs in their recent survey, though they don’t specify the respondant profiles.
Take This Survey - See Current Results
Help us understand the 2025 data based on these different factors! TAKE THE SURVEY HERE - and we’ll report it back here and in a webinar. Thanks for your help! Good luck in planning.
Resources
Insight Partners: SaaS marketing benchmarks: 3 budgeting and strategy trends for 2024
2025 B2B Marketing Planning Guide Forrester
Carilu Dietrich is a former CMO, most notably the head of marketing that took Atlassian public. She currently advises CEOs and CMOs of high-growth tech companies. Carilu helps leaders operationalize the chaos of scale, see around corners, and improve marketing and company performance.
Two budget hacks I just remembered, NEVER, under any circumstances, call your budget holdback a 'slush fund' - this will get it recalled by finance. Innovation budget, experimentation budget, and 'projects with big ROI budget' could all work, but never, ever slush fund.
I just found you and this is very "meaty"(I am veg, but it fits here best) post!
Plus, it's not very "hot" topic to write about - and you made it interesting! Thanks for that!