Marketing Strategy
The two most authoritative marketing spend surveys tell a consistent story: budgets remain structurally lower than pre-pandemic levels and show no signs of returning to previous highs. Understanding where your budget sits relative to these benchmarks is the first step toward strategic allocation.
Marketing Budget Benchmarks 2026: How Much Should UK Businesses Actually Spend?
The definitive guide to setting your marketing budget based on the latest industry data and effectiveness research.
The bottom line: Marketing budgets have flatlined at 7.7% of company revenue according to Gartner's 2025 CMO Spend Survey—unchanged from 2024 and well below the pre-pandemic average of 11%. For UK SMEs, the picture is even starker: 58% spend less than £250 per month on marketing. With zero-click searches reaching 58–69% of all queries and AI reshaping how buyers discover solutions, the question isn't whether you can afford to invest in marketing—it's whether you can afford not to.
Gartner's 2025 CMO Spend Survey, conducted among 402 CMOs from predominantly £1 billion+ revenue companies, found marketing budgets stuck at 7.7% of company revenue for the second consecutive year. Half of all CMOs reported budgets of 6% or less, and 59% said their current budget was insufficient to execute their strategy effectively.
The Duke/Deloitte CMO Survey painted a slightly more optimistic picture at 9.4% of revenue, up from 7.7% in late 2024. The difference reflects population bias: Gartner skews toward large global enterprises whilst Duke surveys a broader US mix including mid-market companies.
| Source | 2025 Budget (% Revenue) | 2026 Outlook |
|---|---|---|
| Gartner CMO Spend Survey | 7.7% (flat) | Modest growth expected |
| Duke/Deloitte CMO Survey | 9.4% (up from 7.7%) | +8.9% projected |
| Forrester (B2B) | ~9% of revenue | 83% expect increases |
| McKinsey (Europe) | Varies by sector | 72% of CMOs plan increases |
The historical trajectory matters for context. Gartner's figure plunged from 11.0% pre-pandemic to a low of 6.4% in 2021, rebounded to 9.5% in 2022, then slid to the current 7.7%. This isn't a temporary dip—it represents a structural reset in how businesses fund marketing.
The UK advertising market tells two very different stories depending on where you look. At the macro level, total UK ad spend reached £42.6 billion in 2024 (+10.4% year-over-year), with the AA/WARC Expenditure Report forecasting £50.4 billion for 2026—exceeding £50 billion for the first time in history.
Digital advertising continues to dominate, with UK digital ad spend hitting £35.5 billion in 2024. Search accounts for 44% of digital spend (approximately £8.3 billion in H1 2025), followed by video at 23%. These channels remain critical for businesses seeking measurable results—something Whitehat SEO's integrated approach to SEO services and marketing services is designed to deliver.
However, the IPA Bellwether Report paints a more cautious picture at the firm level. After a brief recovery in Q2 2025 (net balance of +5.5%), sentiment deteriorated through the year, reaching a 0.0% net balance in Q4 2025—effectively a flatline. Company-own financial prospects plunged to -19.0%, the most pessimistic reading in 13 quarters.
The UK SME Reality Check
According to industry research, 58% of UK SMEs spend less than £250 per month on marketing—just £3,000 annually. Meanwhile, 65% of marketing activities are managed by business owners themselves. The AA's Advertising Pays report found that every £1 spent on advertising returns £4.11 in profit for medium-to-large businesses, but only £1.89 for micro-small businesses. This efficiency gap highlights why strategic expertise matters.
The clearest trend in 2025 marketing budgets is paid media's growing dominance. Gartner reports paid media now absorbs 30.6% of total marketing investment—up from 27.9% in 2024 and the only budget category to have grown its share over five years.
The remaining budget splits across martech (22.4%, declining), labour (21.9%, declining), and agencies (20.7%, declining). This shift reflects CMOs prioritising measurable, performance-oriented spending at the expense of people and external partners—a trend that carries risks for long-term brand building.
Within digital channels (now 61.1% of total spend according to Gartner—the highest since the survey launched in 2013), the breakdown reveals where budgets concentrate:
Critically, 69% of digital spend goes to paid channels, with owned and earned channels declining 9% year-over-year. Email was the sole exception, seeing marginal growth. For businesses looking to balance paid efficiency with sustainable organic growth, this is where a comprehensive website audit can identify opportunities you're currently missing.
Les Binet and Peter Field's landmark research established that the optimal marketing budget split is approximately 60% brand building and 40% sales activation. However, practice has diverged sharply from theory.
Gartner's 2025 data shows that more than half of marketing budgets now go to consideration and conversion activities, with brand awareness accounting for just 29% of media spend—effectively an inversion of the recommended ratio.
For B2B specifically, Binet and Field's LinkedIn B2B Institute research recommends a 46:54 brand-to-activation split—more balanced than B2C but still requiring substantial brand investment. The nuances matter considerably:
8×
Binet's October 2025 research found that budget is 8× more important than ROI in driving marketing effectiveness. The message: "Go Big or Go Home."
This finding directly challenges the "efficiency obsession" driving most CMO behaviour. While ROI has increased 4% since the pandemic, net profit generated is down 11%. Over 56% of campaigns now target sub-segments rather than broad audiences—which Binet warns is counterproductive for long-term growth.
Marketing spend varies dramatically by sector, making industry-specific benchmarks essential for realistic budget planning. Here's what the data shows for key B2B sectors:
Professional services firms typically spend 7–12% of revenue on marketing, with high-growth firms pushing higher. UK data from industry research shows services and consulting at approximately 6%, while US data suggests 10–12% for growth-oriented firms. Law firms present a particularly wide range: the industry average is just 2% of gross revenue, but high-growth firms spend approximately 16.5% versus 5% for no-growth firms.
B2B SaaS companies spend a median of 8% of ARR on marketing, with combined sales and marketing at 30–50% of revenue. Spending varies dramatically by stage: pre-product-market-fit startups may allocate 20–30% of revenue, scaling companies (£5M–£20M) spend 15–25%, and mature firms (£50M+) typically spend 5–7%. VC-backed companies outspend bootstrapped peers by approximately 58%.
Healthcare marketing budgets range from 6–14% of revenue depending on sub-sector. Most medical practices (62%) spend a conservative 1–5%, while pharmaceutical companies invest 18–21%. The biopharma/medtech promotional budget averaged $7.2 million in 2024, with compliance requirements often driving up content production costs.
Multi-location businesses typically contribute 1–4% of gross revenue to national advertising funds (QSR franchises higher at 4–5%), plus an additional 1–3% on local marketing, bringing total marketing investment to 3–8% of revenue. Local SEO becomes particularly important for these businesses—Whitehat's local SEO approach demonstrates how targeted geographic strategies can deliver measurable results.
The most disruptive trend demanding budget reallocation is the collapse of traditional search traffic patterns. Research from SparkToro shows US zero-click searches at 58.5% (EU: 59.7%), with mobile zero-click rates reaching 77%. When Google AI Overviews appear, the zero-click rate jumps to 83%, and click-through rate for the top organic result drops by 34.5%.
Gartner predicts organic traffic will decline 25% by 2026. This isn't speculation—it's happening now, and it requires a fundamental rethink of how businesses approach search visibility.
The Conductor 2026 CMO Investment Report found organisations allocated approximately 12% of digital marketing budgets to AEO/GEO in 2025, with competitive organisations pushing to 15%+ in 2026. Gartner forecasts that 33%+ of web content will be specifically optimised for AI-powered search within 18 months.
This shift from click-dependent to visibility-based strategies means "share of answer" is replacing sessions as the primary KPI. Learn more about how Whitehat approaches this emerging discipline in our HubSpot CRM guide—showing how integrated platforms enable the attribution these new approaches require.
Beyond AEO, other emerging budget priorities for 2026–2027 include connected TV (growing 15–22% annually), retail media networks (UK retail media grew 23% to £1.4 billion), and creator/influencer partnerships (the fastest-growing media category at +20–24%).
AI's impact on marketing budgets operates on three levels: direct tool investment, productivity-driven reallocation, and the emergence of entirely new optimisation categories.
AI spending now represents approximately 9% of total marketing budgets (up from 7% in 2024), with AI powering 17.2% of all marketing activities—a 100% increase since 2022. The CMO Survey projects this will reach 44.2% within three years.
Productivity gains are substantial and measurable:
These gains are driving real budget reallocation. Gartner found that 22% of CMOs say GenAI has enabled them to reduce reliance on external agencies, 39% plan agency budget cuts, and 39% plan labour reductions. Forrester predicts a further 15% reduction in agency jobs in 2026.
For businesses working with agencies, this shifts the value equation. The question becomes not whether to use AI, but how to combine AI efficiency with human strategic insight. This is why Whitehat's HubSpot onboarding services focus on getting clients to value quickly—because technology without strategy delivers tools without results.
The data tells a clear story for budget planning. Marketing budgets are structurally lower than pre-pandemic levels and unlikely to return to approximately 11% of revenue. The winners will be organisations that deploy the 7.7–9.4% benchmark strategically.
Based on Whitehat SEO's analysis of the available research, here's how forward-thinking B2B businesses should approach budget allocation:
The most novel insight from 2025 research is Binet's finding that budget size matters 8× more than ROI optimisation—a direct challenge to the "efficiency obsession" driving most CMO behaviour. For UK SMEs specifically, the gap between market opportunity (a £50 billion advertising market) and actual investment (£3,000/year for the majority) represents both a competitive vulnerability and an opportunity for those willing to invest above the floor.
UK SMEs should aim for 7–10% of revenue on marketing to remain competitive, though high-growth firms often invest 12–15%. The industry benchmark of 7.7% applies primarily to large enterprises; smaller businesses often need proportionally higher investment to build initial awareness and compete with established players.
LinkedIn B2B Institute research recommends a 46:54 brand-to-activation split for B2B companies. New businesses should weight more heavily toward activation (65:35), whilst mature market leaders can push brand investment to 72%. The key insight: cutting brand investment doesn't just reduce awareness—it degrades the effectiveness of all performance activity.
Research shows average SEO ROI of 748% over three years with a break-even period of roughly 9 months, compared to approximately 36% ROI for PPC with a faster 4-month break-even. SEO-generated leads convert at 14.6% versus 1.7% for traditional outbound. The trade-off is speed versus sustainability: PPC delivers faster results whilst SEO compounds over time.
AI spending currently represents approximately 9% of total marketing budgets and is growing rapidly. For AEO/GEO specifically, competitive organisations allocate 12–15% of digital marketing budgets. Mid-market brands typically invest £60,000–£120,000 annually in GEO tools and resources; enterprises may allocate £200,000+.
Marketing budgets dropped from 11% of revenue pre-pandemic to the current 7.7% due to structural changes in business priorities, increased scrutiny of marketing ROI, and the shift toward digital channels that promise greater measurability. This represents a permanent reset rather than a temporary dip, requiring marketers to demonstrate clearer attribution and business impact.
Whitehat SEO helps UK B2B businesses turn marketing investment into measurable pipeline. Start with a free website audit to identify your highest-impact opportunities.
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Whitehat SEO is a London-based HubSpot Diamond Solutions Partner helping B2B companies generate qualified leads through integrated SEO, inbound marketing, and HubSpot implementation. We run the world's largest HubSpot User Group and believe in doing the right thing—for our clients, their customers, and the industry.