How to calculate the right digital marketing budget for your brand
- Jack Carr
- Reading time: 6 minutes
Making digital marketing investment decisions is hard. Whether you’re launching a new product or scaling customer acquisition, your marketing budget plays a crucial role in defining your brand’s momentum. Done right, your spend reflects ambition and market intent. Done wrong, it can lead to missed opportunities or unsustainable burn.
Over the coming weeks we’ll be releasing more specific guides for different shaped and sized businesses. For now, here are the key principles for every organisation to have in mind.
Why Getting Your Budget Right Matters
Your marketing investment shapes your competitive positioning and directly impacts how quickly you move customers through the funnel – from awareness to consideration, and ultimately to loyalty. A well-planned budget ensures that you’re not under-investing and missing growth opportunities, nor over-investing without a strategic foundation that leads to profitability.
Modern marketing spend covers a wide spectrum: from paid digital campaigns and brand-building activities to tools, in-house salaries, and outsourced agency support. With such a wide scope, defining a clear and appropriate budget is essential – not just for execution, but for long-term strategy.
Budgeting Basics: Start with Net Revenue
The most common approach to budgeting is to allocate a percentage of your net revenue—that is, total revenue minus taxes, returns, and discounts. For most online brands, marketing budgets fall within 5–15% of net revenue, depending on your industry and stage of growth.
For example:
Key Components of Your Marketing Budget
To build a comprehensive view of your marketing spend, consider the following categories:
It’s not just about what you spend—it’s about how efficiently that spend translates into results. Track your customer acquisition cost (CAC) against lifetime value (LTV) to ensure your investments are profitable over time. This will also inform how you allocate budget between acquisition and retention strategies.
Monitor, Refine, Repeat
Budgeting isn’t a one-and-done exercise. Build a consistent method for tracking marketing ROI, campaign performance, and budget pacing. Regular reviews ensure your spend stays aligned with goals, adapts to performance, and reflects real-time market conditions.
———————————————————
Conclusion
Marketing is not just an expense – it’s a strategic investment. By aligning your digital marketing budget with your revenue, goals, and industry benchmarks, you’ll empower your brand to grow deliberately and sustainably.
Over the coming weeks we’ll be releasing more specific guides for different shaped and sized businesses. For now, here are the key principles for every organisation to have in mind.
Why Getting Your Budget Right Matters
Your marketing investment shapes your competitive positioning and directly impacts how quickly you move customers through the funnel – from awareness to consideration, and ultimately to loyalty. A well-planned budget ensures that you’re not under-investing and missing growth opportunities, nor over-investing without a strategic foundation that leads to profitability.
Modern marketing spend covers a wide spectrum: from paid digital campaigns and brand-building activities to tools, in-house salaries, and outsourced agency support. With such a wide scope, defining a clear and appropriate budget is essential – not just for execution, but for long-term strategy.
Budgeting Basics: Start with Net Revenue
The most common approach to budgeting is to allocate a percentage of your net revenue—that is, total revenue minus taxes, returns, and discounts. For most online brands, marketing budgets fall within 5–15% of net revenue, depending on your industry and stage of growth.
For example:
- Startups or high-growth brands might lean toward the upper end (10–15% and beyond) to aggressively capture market share.
- Established businesses may operate closer to 5–8%, optimizing for efficiency and retention.
Key Components of Your Marketing Budget
To build a comprehensive view of your marketing spend, consider the following categories:
- Marketing Operational Costs
- Staff salaries (in-house marketing team)
- Agency and consultant fees
- Subscriptions for tools (CRM systems, analytics, feed managers)
- Paid Media and Campaign Costs
- Paid search, social media, programmatic display, and video
- Influencer marketing or affiliate programs
- Creative and Branding
- Content creation, copywriting, photography, video production
- Brand identity design or refresh projects
- Events and Sponsorships
- Webinars, trade shows, or pop-up activations
- Sponsored content and brand partnerships
It’s not just about what you spend—it’s about how efficiently that spend translates into results. Track your customer acquisition cost (CAC) against lifetime value (LTV) to ensure your investments are profitable over time. This will also inform how you allocate budget between acquisition and retention strategies.
Monitor, Refine, Repeat
Budgeting isn’t a one-and-done exercise. Build a consistent method for tracking marketing ROI, campaign performance, and budget pacing. Regular reviews ensure your spend stays aligned with goals, adapts to performance, and reflects real-time market conditions.
———————————————————
Conclusion
Marketing is not just an expense – it’s a strategic investment. By aligning your digital marketing budget with your revenue, goals, and industry benchmarks, you’ll empower your brand to grow deliberately and sustainably.
