How to calculate your marketing budget: backwards from the goal, not by percentage

The most reliable way to calculate your marketing budget is backwards from the goal: new customers times the allowed cost per new customer gives the media budget, and the fixed costs come on top. Percentage of revenue is only the cross-check, because the usual benchmarks come from large companies. This article shows the three common methods, the calculation in six steps with an example, what belongs in the budget and how much you need at a minimum for campaigns to learn. As of November 2026.

In short

• Calculate backwards from the goal: new customers, close rate, cost per enquiry. That gives the media budget.
• Percentage of revenue is the cross-check, not the plan. Gartner measures an average of 7.8% of revenue for 2026, mainly at large corporations.
• Plan media budget and fixed costs separately: platforms on one side; team, agency, content and tools on the other.
• The minimum is set by the ability to learn, not by a platform value: every campaign needs enough results.
• Add 5% in Austria: Google and Meta charge a surcharge on ads delivered there.

Three methods compared

In practice, most companies combine the first two: they calculate backwards from the goal and then check whether the result fits revenue and cash flow.

What percentage of revenue really tells you

According to the Gartner CMO Spend Survey 2026, marketing budgets averaged 7.8% of company revenue, after 7.7% in 2025. From January to March 2026, 401 marketing leaders in North America, the UK and Europe were surveyed, most of them from companies with more than $1 billion in annual revenue.

For a mid-sized company in Austria or Switzerland, this is a reference point, not a target. An online shop that wins new customers almost entirely through advertising often needs a larger share. A company with many referrals and regular customers needs less. And a company that wants to grow cannot derive its budget from revenue it has yet to reach.

Calculating your marketing budget in 6 steps

1. Set the goal: how many new customers, purchases, hires or units sold do you need in the next twelve months?
2. Determine the allowed cost per result: what may a new customer cost you at most? The basis is the contribution margin, i.e. revenue minus variable costs; for repeat customers, over a period you can reliably oversee.
3. Apply the close rate: how many enquiries turn into customers? The goal divided by the close rate gives the enquiries you need.
4. Estimate the cost per enquiry: from your own campaigns, otherwise cautiously from a test. For Google, Keyword Planner shows bid ranges per search term.
5. Calculate the media budget: enquiries needed times cost per enquiry, times 1.05 for the Austrian share.
6. Add the fixed costs: team or agency, creatives and video, website and landing pages, tools for tracking, CRM and consent.

Then the cross-check: is the cost per new customer from steps 5 and 6 combined lower than the allowed cost from step 2? If not, more budget changes nothing. Then you have to work on close rate, offer or landing page.

A worked example

The values are assumed and only illustrate the calculation; they are not a benchmark for your industry:

If a new customer brings €1,500 in contribution margin, there is enough room after media for fixed costs and profit. If they bring €200, the calculation already fails at the ad costs, however well the campaigns run. Run the numbers with your own figures in the ROAS calculator: three numbers, one result.

What belongs in the marketing budget

The advertising budget, also called media budget, is only the part that goes to Google, Meta, LinkedIn or TikTok. The marketing budget also includes:

• Staff or agency for strategy, campaigns, design, video and web.
• Creatives: photos, videos, graphics. Without new creatives, campaigns wear out.
• Website and landing pages, including running costs.
• Tools: tracking, consent tool, CRM, newsletter.
• A reserve for tests: a fixed share for new channels or messages that does not have to deliver results straight away.

What an in-house team costs compared with an agency can be calculated with your own salaries in the calculator on the page Pricing and models.

The minimum: enough for campaigns to learn

Google does not require a minimum budget, and Meta only sets small daily minimums. But both systems optimise for results, and they need enough of them to do so. A budget spread across many campaigns gives each one too little data. So with a small budget: one channel, few campaigns, one clear goal. For most campaigns, Google spends up to twice the daily budget on a single day and at most 30.4 times per month, so plan in months, not days.

Which channel suits the start depends on whether demand already exists. How costs come about on the two big platforms is explained in the articles What does Google Ads cost? and What do Meta ads cost?.

How we plan budgets at ad.boutique

Before launch, we agree a metric with you, such as cost per qualified enquiry or ROAS, and calculate the media budget backwards from the goal. You pay the media budget directly to the platforms and see every figure in the live dashboard. The starting point is a 12-week proof of concept at a fixed price; after that, you decide based on the results. More under Pricing and models and on the page Marketing consulting in Vienna and Zurich.

ad.boutique is a marketing agency in Vienna and Zurich. If you are planning your budget for next year, book an intro call.