Most SaaS companies don’t have a budget problem but an allocation problem. Is your SaaS marketing budget allocation targeting where it converts or where it feels safe?
Every year, another wave of “X% of revenue” articles floods the internet.
Spend 15–25% of ARR on marketing. Or 10–15% if you’re being efficient. Or 30% if you’re hypergrowth. The numbers shift depending on who’s publishing, what stage they’re writing for, and, honestly, whether the author has ever actually attended a budget planning meeting.
The frustrating part? Most of these benchmarks are correct and useless at the same time.
This piece is about what happens after you’ve absorbed them.
It’s for the CMO who knows the industry averages cold but still isn’t confident that the budget they’re defending makes sense. It’s for the CFO asking sharper questions than “what’s the industry standard?”
And it’s for the founder who suspects their current allocation was built on assumptions from a market that no longer exists.
Why Revenue Percentage Is a Starting Point of SaaS Marketing Budget Allocation
The B2B SaaS marketing spend benchmark is between 10% to 30% of revenue. It varies depending on the stage and growth goals.
Early-stage companies lean higher because they’re buying market position. Mature companies lean lower because brand equity and word-of-mouth begin to carry the load.
This is all true. It’s also a starting point dressed up as a destination.
The problem with anchoring to revenue percentage is that it’s backward-looking by design.
Your current revenue is a product of past decisions. If you overinvested in a segment that stalled, or underinvested in a channel that was quietly outperforming, that’s already baked into your revenue base. Defending next year’s budget as “15% of current ARR” means perpetuating whatever you got right and wrong last year.
There’s also the composition problem.
Two SaaS companies can spend 20% of revenue on marketing and have completely different outcomes. Because one is spending 20% on brand, events, and awareness, while the other is plunging it into performance channels with direct attribution.
The percentage tells you nothing about the logic underneath it.
What finance-savvy marketing teams do instead is think about budget allocation as a portfolio construction problem. And that starts with a question most budget conversations skip entirely:
Which growth motion are we actually funding?
How to Allocate Your SaaS Marketing Budget Across Growth Motions
Rather than organizing your budget by channel type (paid search, content, events), organize it by go-to-market motion. There are three in most B2B SaaS companies, and they rarely offer funding in proportion to their actual strategic weight.
1. Acquisition
Demand generation, paid media, outbound SDR activity, and SEO-driven content are expensive, attributable, and fast in their feedback loops. Because it’s measurable, it tends to absorb the lion’s share of marketing investment.
2. Expansion
Product-led growth loops, customer marketing, cross-sell, and upsell campaigns all live here. Yet ask most CMOs what percentage of their marketing budget is targeted at existing customers. And the answer is embarrassingly small, often under 10%, although existing customers are 60–70% cheaper to grow than new ones.
3. Retention
What reduces churn? Content that makes your product feel indispensable.
But when churn rises? The instinct is to throw more acquisition spend at the problem. Like adding water to a leaking bucket.
The structural insight here? If your net revenue retention (NRR) is below 100%, increasing your acquisition budget is a short-term fix for a long-term problem. The allocation conversation must occur at the motion level before it ever reaches the channel level.
Stage matters too. But not in the generic way most budget guides describe it:
- At seed and Series A, you need signal, not infrastructure: small bets across channels that tell you what messaging converts and which personas respond.
- By Series B and C, you’re scaling what works, which is where channel diversification and compounding assets, such as SEO, actually earn their place.
- At enterprise scale, the Rule of 40 becomes a board-level constraint, and brand investment, which is notoriously hard to attribute, starts delivering returns in the form of lower paid media costs and shorter sales cycles.
Companies that starved brand spend in their growth years often find themselves paying a steep premium for attention later.
The Attribution Problem That’s Subtly Distorting Your SaaS Marketing Budget Allocation
Here’s the dynamic that almost nobody talks about: what’s attributable is not the same as what’s effective. And that distinction is warping how SaaS companies allocate their spend.
Performance marketing channels are easy to attribute. Click happened, form filled, opportunity created. The measurement is clean. At budget review time, these channels are appealing on a dashboard, and they tend to absorb an increasing share of resources year over year.
Meanwhile, the blog post a VP read eighteen months ago (the one that led them to add your product to their vendor shortlist) shows up as “direct” in your CRM. The podcast your champion listened to on their commute doesn’t appear in any attribution report.
The LinkedIn thread your CEO wrote that got shared in a Slack community your best customer belongs to? Good luck modeling that.
This creates a systematic budget bias toward short-cycle, attributable channels and away from the slower, compounding channels that often do the real heavy lifting in B2B buying decisions.
The result, over several budget cycles, is a portfolio that’s overweight on performance and underweight on the brand and content investments that actually lower your cost of acquisition over time.
The fix isn’t to abandon attribution.
It’s to hold two parallel views simultaneously: the attributed view and the influence view. Execute win/loss interviews and ask buyers directly what they read, watched, or heard before decisions.
Survey your pipeline about which content they engaged with. That data won’t be clean, but it will be real. And it will almost always reveal a dark funnel that’s far more active than your attribution model suggests.
Once you see it, you stop cutting brand and content budgets every time a performance channel has a bad quarter. You start treating them like the long-term infrastructure they actually are.
How to Build a SaaS Marketing Budget That Can Adapt Mid-Year
The mechanics of good allocation are less about arriving at the right percentages and more about building a budget with the right structure. One that can move with the market. Here’s what that actually looks like in practice:
Prioritize both short and long-cycle investments.
Short-cycle spend keeps the pipeline alive in the near term and is easy to adjust. Meanwhile, long-cycle spend brand, content, community, and partner ecosystem development compounds over time but is slow to restart once cut.
The most common budget mistake in SaaS is raiding long-cycle investments to fund short-cycle shortfalls. It feels rational in the moment and quietly raises your CAC for years afterward.
Revisit your channel mix against current market waves.
Events and field marketing have rebounded sharply.
Pipeline leads gauged from in-person roundtables and conferences are outperforming digital campaigns. So, if your field marketing budget is still calibrated to 2021 levels, it’s likely under-resourced.
Meanwhile, partner and ecosystem-driven marketing remains the most underrepresented allocation in most SaaS budgets, despite offering some of the lowest CAC available. Especially where buyers are already embedded in platforms like Salesforce, HubSpot, or AWS.
Hold a meaningful reserve, i.e., 10–15% of total budget, unallocated at the start of the year.
Annual budgets set in stone are a financial convenience, not a marketing reality. That reserve is what allows you to double down on a channel that’s outperforming midyear rather than honoring commitments made in October about a market that looked different then.
Expand the budget conversation beyond the marketing function.
Marketing budgets are often planned in silo: marketing presents a plan, finance pushes back, they negotiate, and something gets approved. This should include a genuine comparison of what an incremental dollar in marketing returns v/s an incremental dollar in product, customer success, or sales.
In some companies, the highest-leverage investment is in reducing churn through better onboarding. In others, it’s a competitive playbook that improves win rates on the existing pipeline.
The Most Vital Question in SaaS Marketing Budget Allocation
Budget allocation, done well, occasionally surfaces the uncomfortable insight that marketing isn’t the highest-leverage investment this quarter.
The leaders who can have that conversation and act on it are the ones building businesses that compound.
The most useful budget allocation question isn’t “are we spending enough?” It’s “Are we spending on the right problem?”
The correct spend level for a company defending a position in a commoditizing market isn’t similar to the right spend for one entering a greenfield segment.
The right balance between acquisition and retention looks completely different if your NRR is 115% versus 88%. Benchmarks are useful as sanity checks. They’re a poor substitute for the strategic clarity that actually makes a budget defensible.
The companies that get this right don’t have a better spreadsheet. They have a clearer perspective.
