A budget in a marketing plan is a set of decisions, not a total
The budget section of a marketing plan answers four questions: how much, split into which lines, tied to what result, and reviewed when. A plan that gives only a total and a pie chart answers the first question and leaves the other three for the owner to guess, which is why those plans get approved in a hurry and cut in a panic.
I write these sections for owners who hold the money, not for a marketing department that defends its own headcount. The test I use is simple: could the person signing the plan explain every line to their accountant without calling me? If not, the section is not finished.
Choosing the total: two methods and the check between them
You can reach the total from the top (a share of revenue) or from the bottom (the cost of each activity the plan needs). Use both, then compare. If the two are far apart, the plan is either asking for more than the business can fund or promising results it has not paid for.
For the top-down view, the best public reference is Gartner's annual CMO Spend Survey. The 2025 edition reports marketing budgets at 7.7 percent of company revenue, and its respondents are mostly large companies, so a small business should treat it as a reference point and not a target. Gartner's own release has the full breakdown.
| Measure | Gartner 2025 CMO Spend Survey | What to do with it |
|---|---|---|
| Marketing budget as a share of company revenue | 7.7 percent | Use as a sanity check on your top-down total, not as the total |
| Share of marketing budgets going to paid media | 30.6 percent | Compare with your own plan: a far higher share needs a reason |
| Paid media as a share of company revenue | 2.4 percent | A rough ceiling for large companies, rarely right for a local one |
Source: Gartner, May 2025, survey of 402 marketing leaders in North America, the UK and Europe, fielded February to March 2025.
The bottom-up view is the one I trust more. List every activity the plan needs, price each one, and add them up. For paid media, the price of an activity is the media spend plus the cost of the work to run it. My article on planning a marketing budget backwards from the sales you need walks through how to get the target customer cost that makes the bottom-up number defensible.
The lines I put in every plan
A budget line is a commitment with an owner, a start date and a result it is supposed to produce. These are the lines I expect to see, and the reason each one earns its place:
- Media by channel. One line each for search, social and any channel you own, never one line called "advertising". Without the split you cannot move money when one channel underperforms.
- Measurement. Conversion tracking, call tracking, and the work to connect leads to closed sales. This is the line owners cut first and regret first.
- Creative and landing pages. Ads and pages are a cost that repeats, because they wear out.
- Tools and platforms. Software subscriptions, kept apart from media so that a tool never hides inside ad spend.
- People and fees. Salaries, a freelancer or a consultant, shown separately from media. A fee is not media, and mixing them flatters the cost per lead.
- A test reserve. Money set aside to try something unproven, with a rule written in advance for what counts as a pass.
- A contingency. A small held-back amount released only by a named person for a stated reason.
If a line cannot be tied to a number the plan promises, it is a wish. Cut it or turn it into a test.
What the 70/20/10 rule is, and where the 3-3-3 rule falls apart
The 70/20/10 rule is a split of the budget between proven work, emerging work and experiments, usually 70 percent, 20 percent and 10 percent. It is a rule of thumb and not a standard, so I use it only to remind a plan that some money has to be allowed to fail. The proven share should come from your own results, and in a first-year plan with no history it will be smaller.
The 3-3-3 rule appears in the questions people ask, but it has several meanings depending on who writes it, and I have not found a single agreed definition. Do not put a rule in your plan if you cannot say which version you mean and why it fits your business.
Separate brand traffic from new demand before you promise a result
The result a plan promises is only believable if brand clicks and new-customer clicks are counted apart. In the accounts I run, brand terms take 20 to 35 percent of clicks, and they convert far better than anything else, so a blended cost per lead looks healthier than the work that finds new customers really is.
That is why I write two lines into the results column for paid search: one for brand, which defends what you already earn, and one for non-brand, which is the part that grows the business. The same logic runs through return on ad spend, where a blended figure can pass a plan that is losing money on new customers.
Phasing and review: when the budget is allowed to change
Phase the budget by month for media and by quarter for everything else, and write down in advance what moves money. A reallocation trigger can be as plain as "if a channel misses its customer cost target for two consecutive months, a third of its budget moves to the best performer". The wording matters less than the fact that it was agreed before the money was spent.
Put the review date in the plan. A budget reviewed only at year end drifts for eleven months, and a budget reviewed every month turns into a meeting about last week. Quarterly for the whole plan and monthly for media is the rhythm that has worked in the accounts I run.
Seasonal businesses need one more rule: say whether the budget follows demand or stays flat. For a local service business, my default is to ramp before the busy season, since waiting for the phones to ring means buying the peak at its highest price.
How to defend the budget to the person who approves it
The person approving a marketing budget asks three questions, whether they say them aloud or not: what do I get, what is the downside, and when will I know. Write the answer to each at the top of the budget section, in one sentence apiece.
- What do I get. A target number of customers or sales at a target cost, using what a customer is allowed to cost against what that customer is worth.
- What is the downside. The most that can be lost before the plan is stopped: the test reserve plus the media committed before the first review.
- When will I know. The first date on which results can be read with enough data to trust, which for paid search is usually later than the owner hopes.
If paid search is a large line in your plan, what Google Ads actually costs is the next thing to check, and you can see how the same logic plays out in a real estate budget where buyer and seller leads cost very different amounts. If you want a second pair of eyes on the numbers before you commit them, that is the work I do through Google Ads management.
