Marketing Budget Calculator
Wondering how much to invest in your marketing efforts? Our easy-to-use Marketing Budget Calculator takes the guesswork out of planning. By aligning with industry best practices and the latest research, we guide you through allocating your annual marketing budget.
How our Budget Calculator Works
Expert Guidance: Based on solid marketing principles and up-to-date research.
Customised Strategy: Tailor your budget to suit your current situation and your business goals.
Optimised Spending: Ensure your budget is allocated to the right area of marketing for proven success.
Our overall budget calculation
We use a percentage of revenue as a suggested yearly budget. For those looking to maintain their market share we use 5% of turnover. For those looking to grow it's 8% and for those aiming for transformative growth we suggest reinvesting 11% of revenue.
These figures may be higher than your current level of spend so be warned: underinvestment in marketing will hamper your results. A Nielson report found that 50% of media plans are underinvested by a median of 50% and ROI can be improved 50% with an ideal budget.
Brand vs Activation budget split
For brand vs activation budget we start out with a 60:40 split in favour of brand. This calculation has been widely used since Binet and Field showed to be be optimal in 'The Long and Short of it'. From here we apply weightings based on research from Effectiveness In Context, again by Binet and Field, from 2019. These adjustments to the baseline 60/40 split relate to industry, brand size and pricing.
Many businesses underinvest in brand building activity in favour of activation activity which is focused on driving short term returns. For significant long term growth you will need to invest in building brand equity.
Our references
This isn't just our opinion, it's based on guidance from some of the most respected voices in the marketing industry, based on their statistical research.
"Aim for 10% of [your] business’s turnover, to get the “maximum efficiencies and effect” and, most likely, a competitive advantage."
Mark Ritson, brand consultant and former marketing professor at London Business School & MIT, writing in Marketing Week.
"Media spend needs to be between 1% and 9% of revenue to stay competitive."
Nielsen ROI Report 2022
"A good rule of thumb is to spend between 5% and 10% of turnover on advertising for the highest return on investment."
Grace Kite, founder and managing director of Magic Numbers, in Marketing Week.
"A 60:40 ratio of brand to activation spend is typically optimal"
The Long and the Short of It: Balancing Short and Long-Term Marketing Strategies by Les Binet and Peter Field. Published June 2013 in association with Thinkbox and the IPA
"[Brands] that cut brand budgets and try to rely on short-term activation only will continue to underperform"
Media In Focus: Marketing Effectiveness in the Digital Era by Les Binet and Peter Field. Published October 2017 in association with Google, Thinkbox and the IPA
The “60:40” rule for balancing brand and activation expenditure is evolving... there are significant variations by sector"
Effectiveness In Context, A Manual For Brand Building By Les Binet and Peter Field. Published October 2019 in association with Google, Thinkbox and the IPA
How to use our Budget Calculator
Step 1: Use the link below and click the ‘make a copy’ button to create your own copy of the spreadsheet which you can edit.
Step 2: Enter your previous year’s total business revenue in the revenue box (if you don’t know this just leave it at £1m).
Step 3: Select your growth aspiration from the option in the drop down.
Step 4: Select the most relevant industry category from the industry drop down.
Step 5: Select your brand size from the drop down. This should be your size in comparison to your main competitors.
Step 6: Select how your product or service cost compares to those of your competitors from the drop down.
Once you have completed these steps the document will give you two figures:
Figure 1 - Suggested Marketing Budget: How much of your revenue you should invest in marketing, based on your turnover and growth aspiration.
Figure 2 - Suggested Budget Split: The optimal way to split that budget between brand building activity and activation activity.
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