How Much Should You Spend on Marketing in 2027? A Guide for UK CEOs
The right marketing budget is the one your acquisition maths can pay back. A benchmark tells you where to start. Your growth target, your cost per customer and your cash tell you where to finish.
The short answer
Large companies spend 7.8% of revenue on marketing (Gartner, 2026). US companies under $25m revenue spend 13% to 17% (The CMO Survey, 2026). Start there. Build your number up from your 2027 revenue target, check it against what a customer is worth to you and cap it by the cash you can commit. This guide shows the method with worked examples in pounds.
What changes the number in 2027
Meta's average price per ad rose 12% year on year in both the first and second quarters of 2026 (Meta filings).
Google's cost per click rose 7% across 2025 (Alphabet filings).
In the UK, £1 of advertising returns £4.11 in profit for firms over £10m turnover and £1.89 for smaller firms, measured over 24 months (Credos, 2025).
A median UK marketing manager costs around £62,000 a year to employ once National Insurance and pension are added (ONS, 2025).
For the full benchmark tables by industry, size and business model, see Marketing Spend as a Percentage of Revenue by Industry: UK Benchmarks 2027.
The 4 step method
Most budget guides give you a percentage and stop. A percentage is an average of other companies. It knows nothing about your margin, your target or your bank balance.
Use 4 steps in this order.
Start from the benchmark for your size and sector.
Build up from your revenue target. Work out how many customers you need and what it takes to win them.
Check it against what a customer is worth. The budget must pay back inside a period your cash can carry.
Cap it by cash. Commit what you can fund without betting the business.
If steps 1 and 2 land close together, your target is realistic. If step 2 lands far above step 1, the target or the margin needs another look.
Step 1: Start from the benchmark
The benchmark is a sense check. It tells you what companies like yours tend to spend.
| Company type | Marketing spend, % of revenue | Source |
|---|---|---|
| Large companies (mostly over $1bn revenue) | 7.8% | Gartner CMO Spend Survey 2026 |
| US companies, all sizes | 9.0% | The CMO Survey 2026 |
| US companies under $10m revenue | 13.3% | The CMO Survey 2026 |
| US companies with $10m to $25m revenue | 17.4% | The CMO Survey 2026 |
| B2B services | 10.1% | The CMO Survey 2026 |
| B2B product | 7.0% | The CMO Survey 2026 |
| B2C product | 12.0% | The CMO Survey 2026 |
| Private B2B SaaS (median, % of annual recurring revenue) | 8% marketing, 15% sales | SaaS Capital 2026 |
No primary UK source publishes marketing spend as a percentage of revenue by size or sector. The CMO Survey figures are US means and the typical company spends less than the average.
Smaller companies spend a bigger share because they have less existing demand working for them. Every customer has to be found and won.
Step 2: Build up from your revenue target
This is the step most companies skip. Start from the revenue you need in 2027 and work backwards to the customers, the leads and the cost of winning them.
Worked example 1: a B2B services firm
Illustrative figures for a business with £5m revenue.
| Input | Figure |
|---|---|
| New revenue target for 2027 | £1m |
| Average first year value of a new client | £25,000 |
| New clients needed | 40 |
| Proposal to win rate | 20% |
| Qualified opportunities needed | 200 |
| Gross margin | 50% |
| First year gross profit per client | £12,500 |
If you want each new client to pay back their acquisition cost within 12 months, you can afford up to £12,500 to win each one. 40 clients at £12,500 gives a ceiling of £500,000 for sales and marketing acquisition.
That is 10% of revenue. The CMO Survey puts B2B services at 10.1%. The target and the benchmark agree. This plan is fundable on paper.
Worked example 2: a consumer brand selling online
Illustrative figures for a business with £2m revenue.
| Input | Figure |
|---|---|
| Average order value | £80 |
| Gross margin | 40% |
| Gross profit per order | £32 |
| Orders per customer in the first year | 2.5 |
| First year gross profit per customer | £80 |
| New customers needed for the 2027 target | 5,000 |
At a 12 month payback, each new customer can cost up to £80 to acquire. 5,000 customers at £80 gives a ceiling of £400,000. That is 20% of revenue.
It looks high. Companies that make more than half their sales online spend 18.6% to 18.8% of revenue on marketing in The CMO Survey. The plan is in range.
If the target were 10,000 customers, the same maths would need 40% of revenue. The target would need cutting or the margin would need to rise.
Step 3: Check it against what a customer is worth
The worked examples rest on 2 numbers: what a customer costs to acquire and how long it takes to earn that back.
Customer acquisition cost (CAC) is your sales and marketing acquisition spend divided by the new customers it wins. Payback is CAC divided by the monthly gross profit each new customer brings in.
The best published payback data comes from subscription software. The median B2B SaaS company takes 16 months to earn back what it spent to win a customer, down from 18 months in 2024 (Aleph and Benchmarkit, 2026, 198 companies). The top quarter does it in 6 months or less.
The famous rule that customer lifetime value should be 3 times CAC comes from investor David Skok's SaaS Metrics 2.0. He describes it as a guideline from experience. There is no dataset behind it.
"I should stress that these are only guidelines."
David Skok, SaaS Metrics 2.0
No equivalent benchmark exists for UK SMEs, retailers or professional services firms. Use the method and set your own payback tolerance. A business on a 30% margin cannot carry a 16 month payback the way a software company on 80% can.
Our guide to measuring marketing ROI with CAC and LTV sets out the metrics in more detail.
Step 4: Cap it by cash
The maths can justify a number your bank balance cannot fund. Marketing returns arrive over time. The cash goes out before the profit comes back.
Thinkbox's Profit Ability 2 study of 141 brands found advertising returned £1.87 in profit per £1 within 13 weeks. Over 24 months that rose to £4.11. More than half the return arrives after the first quarter.
Commit only what you can fund through that gap. If cash is tight, shorten the payback you will accept. Lean on channels that convert this quarter and build the rest as cash allows.
What goes in the number
Benchmarks include people. If your budget counts only media and agencies, you will think you are underspending.
A complete marketing budget covers in house salaries, agencies and freelancers, paid media, technology and AI tools, content and production, events and research. Sales team costs sit outside it. Labour is 24.5% of the average large company marketing budget (Gartner, 2026).
What marketing capability costs in 2027
| Option | Approximate annual cost | Basis |
|---|---|---|
| Marketing executive, in house | £38,500 | ONS median £33,412 plus employer NI and pension |
| Marketing manager, in house | £62,300 | ONS median £53,703 plus employer NI and pension |
| Marketing director, in house | £108,800 | ONS median £94,135 plus employer NI and pension |
| Freelancer at the UK average rate, 2 days a week | £38,500 | YunoJuno UK average day rate £418, 46 weeks |
| Director level freelancer, 2 days a week | £49,500 | YunoJuno director day rate £538, 46 weeks |
Salaries are ONS full time medians for April 2025. Employer NI at 15% above £5,000 and the 3% minimum pension contribution are added. Freelance costs exclude IR35 considerations. None of these figures include media spend.
For a £2m business budgeting £156,000 at the large company average, a marketing director alone takes more than two thirds of it. That is why many growing businesses buy senior marketing time by the day. See our fractional CMO cost and pricing guide and the retainer vs full time salary breakdown.
Why the same budget buys less in 2027
The platforms where your customers spend their time are charging more for every ad.
Meta and Alphabet filings
What it costs to buy attention, year on year
Meta average price per adGoogle cost per click
Source: Meta and Alphabet quarterly filings. Worldwide, in US dollars. Google did not report Q4 2025 separately.
| Quarter | Meta average price per ad, worldwide | Meta average price per ad, Europe | Google cost per click |
|---|---|---|---|
| Q1 2025 | +10% | +9% | +7% |
| Q2 2025 | +9% | +17% | +8% |
| Q3 2025 | +10% | +19% | +7% |
| Q4 2025 | +6% | +12% | Not reported separately |
| Q1 2026 | +12% | +19% | +5% |
| Q2 2026 | +12% | +10% | +3% |
Year on year changes, in US dollars, from Meta and Alphabet quarterly filings. Google's full year 2025 change was +7%. Neither company reports UK figures. Europe is the closest proxy for UK advertisers.
Price per ad is a different measure from cost per customer. Meta attributes part of the rise to better ad performance. Cost per result can move less than price.
The direction is clear all the same. If your 2027 budget matches 2026, it will buy fewer impressions and clicks.
What UK small businesses actually spend
No official UK source measures how much SMEs spend on marketing. The Department for Business and Trade, the ONS and the FSB do not publish it.
The only UK figures in pounds come from a LOCALiQ survey of more than 500 UK businesses published in January 2026. It does not publish its method. Treat it as indicative.
41% spend under £5,000 a year on marketing.
54% spend under £10,000.
17% spend £50,000 or more.
11% do not know what they spend.
When to spend more than the benchmark
You are entering a new market or launching a product. You are buying awareness that does not exist yet.
Your growth target is well above your current rate. Step 2 will show it.
Most of your sales happen online. Online led companies spend more than twice the share of revenue of offline ones (The CMO Survey 2026).
Competitors are cutting. In the 2008 and 2009 recession, brands whose share of voice exceeded their market share by more than 8 points grew share by 4.5% a year (Peter Field, IPA Databank). We cover this in the benchmark article.
When to spend less
You cannot measure what you already spend. Fix tracking and attribution before adding budget.
Payback runs longer than your cash can carry. Shorten the payback first.
You are buying traffic that does not convert. Free attention has a hidden cost. Paid attention has a visible one.
How to put the budget to your board
Boards ask for a guarantee. Give them the maths instead.
Show the revenue target, the customers it needs, the cost to acquire each one and the payback period. Then show the benchmark as a cross check.
A board can challenge an assumption. It cannot challenge a percentage pulled from a blog.
Agree how you will judge it before you spend. Most advertising profit arrives after the first 13 weeks. A quarterly review alone will undervalue it. We cover the leading indicators in how boards decide whether marketing is working.
Where AI changes the budget
AI is moving money inside the marketing budget. Large companies now put 15.3% of their marketing budgets into AI (Gartner, 2026).
For smaller firms, marketing is where AI lands first. Among UK firms with 5 or more staff that use or plan to use AI, 72% apply it to marketing, level with admin (DSIT, 2025). Content creation is the most common use.
"Employers want commercially minded, AI-enabled growth professionals who can directly influence revenue."
James Nally, Michael Page, September 2026
What I see
The first question I ask is what the business is trying to achieve, and by when. Short term, medium term or long term. The answer decides how much to spend and where to spend it.
Short term results mean paying for attention. Paid media buys reach and relevance on the platforms where your customers spend their time. It works. It also never stops.
You commit to the same spend month after month until other channels can carry some of the load. Stop paying and the results stop with it.
Medium and long term growth means building assets that keep working. Content, editorial, organic search and social all compound over time. Paid media still has a role. It supports that work instead of carrying the business.
Most companies need both. Paid buys results now. Organic builds the channels that reduce your dependence on paid later.
The budget question has changed too. It used to be people or media. In 2027 there are 3 places the money can go.
| Where the money goes | What it buys |
|---|---|
| People | In house talent, agencies and freelancers |
| AI | The tools and usage costs (tokens) that now do work people used to do |
| Media | Your brand in front of customers on the platforms where they spend their time |
| Your objective | Where the budget leans |
|---|---|
| Short term revenue | Media first, with the people to run it |
| Medium term growth | A mix of media, AI and content |
| Long term growth | AI, content and organic, with some media in support |
Every company has different targets. There is no single right split. Every CEO has to accept that paid attention has a price. That price is rising.
You have to spend money to make money. Spending without a plan is just spending.
Frequently asked questions
How much should a small business spend on marketing in the UK?
US companies under $10m revenue spend 13.3% of revenue on marketing on average (The CMO Survey 2026). No UK survey measures it as a share of revenue. Build your figure up from your revenue target and the cost of winning each customer, then check it against that benchmark.
What percentage of revenue should I spend on marketing?
Large companies average 7.8% (Gartner 2026). Companies under $25m revenue average 13% to 17% (The CMO Survey 2026). Your own figure depends on your margin, growth target and cash.
How much should a startup spend on marketing?
Private B2B SaaS companies spend a median 8% of annual recurring revenue on marketing and 15% on sales (SaaS Capital 2026). Equity backed companies spend twice as much on marketing as bootstrapped ones.
Is £500 a month enough for marketing in the UK?
£500 a month is £6,000 a year. In one survey of more than 500 UK businesses, 41% spent less than £5,000 a year (LOCALiQ 2026). Whether it is enough depends on how many customers you need and what each one costs to win.
Should I spend more on marketing when business is slow?
The evidence favours holding your share of voice. In the 2008 and 2009 recession, brands with excess share of voice above 8% grew market share by 4.5% a year, against 1% for those with none (Peter Field, IPA Databank). Cut only what cannot show a return.
Do salaries count as marketing spend?
Yes. Gartner's benchmark includes in house labour, which makes up 24.5% of the average large company marketing budget. A median UK marketing manager costs around £62,300 a year to employ.
Should I hire an agency or build an in house team?
Compare the full cost. An in house marketing manager costs around £62,300 a year including NI and pension. A freelancer at the UK average day rate, 2 days a week, costs around £38,500. See our comparison of a fractional CMO, an agency and a consultant.
How much should I spend on social media ads per month?
Work back from the cost of a customer. Meta's average price per ad rose 12% year on year in the first half of 2026. Budget for rising prices.
How do I justify marketing spend to the board?
Present the revenue target, the customers it needs, the cost per customer and the payback period. Agree the review period first. Advertising returned £1.87 per £1 within 13 weeks and £4.11 over 24 months in Thinkbox's study of 141 brands.
How do I know if my marketing budget is working?
Track cost per customer and payback against the targets you set in step 2. If either drifts, adjust the channel mix before cutting the total.
Sources and methodology
Figures on this page were checked against the original publisher's material on 9 October 2026. Figures we could not trace to a primary source are excluded or labelled.
Meta quarterly filings. Q1 2026. Q2 2026 10-Q. Q4 2025. Q3 2025. Q2 2025. Q1 2025.
Alphabet quarterly filings. Q2 2026. Q1 2026. FY 2025. Q3 2025. Q2 2025. Q1 2025.
Credos, Advertising Pays 2025. Report. The £1.89 figure for firms under £10m is a model estimate.
Thinkbox, Profit Ability 2. Study. 141 brands, 2021 to 2023.
Gartner CMO Spend Survey 2026. Press release.
The CMO Survey 2026. Firm and Industry Breakout Report. US companies.
SaaS Capital. 2026 spending benchmarks.
Aleph and Benchmarkit. CAC payback 2026. Benchmarkit 2026.
David Skok. SaaS Metrics 2.0.
ONS Annual Survey of Hours and Earnings 2025. Table 14.
YunoJuno. Marketing and communications freelancer rates 2026.
LOCALiQ UK. UK state of digital marketing report. Method not published.
DSIT. AI adoption research.
Michael Page. Marketing hiring study, September 2026.
Peter Field. Seven lessons for advertising during a recession, IPA.
Limits of the data. Ad price data is global or European. CAC and payback benchmarks come from software companies. No primary UK source publishes SME marketing spend as a share of revenue.
Next update: Meta and Alphabet third quarter 2026 results, due late October 2026. ONS salary data for 2026, due late October 2026.
