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Planning a marketing budget for a SaaS company is never a simple task, and 2025 brings new twists to the process. With economic shifts, tighter funding, and the prevalence of AI, SaaS companies must allocate their marketing dollars wisely to drive growth.
In this article, we’ll look at industry benchmarks and trends for marketing spend, explore how to plan and allocate a SaaS marketing budget at different growth stages, and highlight common mistakes to avoid.
The honest answer: it depends on your company’s stage, growth targets, and resources. However, there are some useful benchmarks and trends for SaaS businesses that can inform your planning.
One common rule of thumb often cited is to invest around 10% of your annual revenue back into your marketing budget. Recent data shows many SaaS companies are currently budgeting a bit less than that, likely due to cost-cutting.
A 2024 survey of 1,500+ private B2B SaaS companies found the median marketing spend is about 8% of Annual Recurring Revenue (ARR) (down from roughly 10% the year before).
It’s important to note that this is a median, not a mandate. Your optimal percentage could be higher or lower. For instance, high-growth, venture-backed startups often spend aggressively to capture market share. They might pour significantly more than their annual revenue into sales and marketing combined – essentially operating at a planned loss to fuel rapid growth.
The survey data supports this: venture-funded SaaS companies in the study were spending about 58% more on marketing (as a % of revenue) than their bootstrapped counterparts. It’s not unusual for a fast-scaling SaaS in growth mode to invest 15%, 20%, or even more of total revenue into marketing when customer acquisition is the priority. On the flip side, a bootstrapped or mature SaaS company focused on efficiency might stick to <5% of revenue on marketing, especially if they rely more on organic growth or referrals.
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Besides percentage of revenue, another benchmark to consider is marketing spend per acquisition or as a ratio to lifetime value. For example, some SaaS CFOs will look at the Customer Acquisition Cost (CAC) payback period – how long it takes to recoup marketing and sales spend from a new customer’s revenue.
While this strays into technical territory, keeping an eye on metrics like CAC or Customer Lifetime Value (LTV) helps ensure your budget is not only in line with revenue but also with the profitability of customers acquired.
Benchmarks for healthy SaaS CAC vary, but many aim for a CAC that is about 1/3 or 1/4 of LTV (implying an LTV:CAC ratio of 3:1 or 4:1). If you find your planned budget would make that ratio way off (say 1:1, spending as much as you earn), it’s a red flag to adjust.
Marketing budgets overall have been under pressure (as noted, average marketing spend across industries fell to ~7.7% of company revenue). If your company’s board is citing cost cuts, you might target the lower end of the range.
Conversely, if competitors are raising big funding rounds and stepping on the gas, holding steady at 5% might actually mean falling behind.
Keep an ear to the ground: for instance, many SaaS companies that saw slower growth in 2024 are re-accelerating product and marketing investments in 2025 thanks to new innovations (AI features, etc.) and an improving outlook.
(use these as guidelines, not strict rules)
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Remember, these percentages are just reference points. The “right” budget for you will also depend on factors like your Average Contract Value (ACV), sales cycle length, and how effective your past marketing spend has been.
The beauty of SaaS is the data you have – use it. If last year 8% of revenue on marketing yielded 30% growth, you can decide if maintaining or increasing that investment aligns with your 2025 growth target. Benchmarks guide you, but your own numbers should ultimately drive your budget allocation decisions.
Once you have a sense of how much to spend, the next challenge is where to spend it. A successful SaaS marketing budget isn’t just about the total dollars – it’s about how you distribute those dollars across channels, campaigns, and time.
Here are practical tips to allocate your marketing budget for maximum impact:
Start by identifying which marketing channels have historically brought you the best results for the cost. Do your closed-won customers often cite finding you through content marketing, paid search, or search engine optimization (SEO)? Lean into what works.
Allocate a good portion of your SaaS budget to the proven winners that drive quality leads. But be careful not to put all your eggs in one basket.
The marketing landscape changes quickly (algorithms update, ad prices rise, buyer behaviors shift). Diversify across a few core channels so that if one underperforms, others can pick up slack.
For example, you might allocate 40% to digital ads/search, 25% to content/SEO, 15% to webinars/events, 10% to partner or referral programs, and 10% to experimental/new channels.
The exact mix will vary, but a spread ensures you’re not overly reliant on a single source.
It’s tempting to spend the bulk of your budget on immediate lead generation – things like PPC campaigns, lead purchase, or sales development reps – because these can show quick returns. However, sustainable growth in SaaS also comes from building your brand and nurturing customer trust, which are longer-term plays.
Set aside part of your budget for top-of-funnel and brand awareness efforts that may not yield MQLs overnight but pay dividends over time. This could include content marketing (thought leadership blogs, whitepapers), PR/media efforts, community building, or sponsoring industry events/podcasts.
Strong brand presence can be a differentiator, especially as larger competitors consolidate through M&A. You want your target audience to know who you are and what problem you solve before they’re actively in the market.
A common split is to dedicate perhaps 70-80% of spend to direct demand generation and 20-30% to brand/awareness. But if you’re in a crowded space or launching a new category, you might increase brand spend.
The key is not to neglect brand just because it’s harder to measure – find proxy metrics (website traffic growth, social engagement, branded search volume) and keep investing steadily.
Your budget should be a portfolio of short-term and long-term bets.
Marketing budget isn’t solely for acquiring new customers – savvy SaaS marketers allocate a portion to engage and grow the customers they already have. Customer marketing can include programs like user webinars, customer newsletters, loyalty or advocacy programs, and upsell/cross-sell campaigns.
Why spend here? Because improving retention and expansion has massive ROI. Keeping a customer is far cheaper than acquiring a new one, and happy customers can become your best marketers via referrals and case studies.
In tight times, companies that focus on customer success and expansion often outperform those that only chase new logos. So consider carving out part of the budget (even 10-15%) for marketing initiatives aimed at increasing customer satisfaction and usage (which leads to renewals and upgrades).
In 2025, many SaaS firms are emphasizing net revenue retention – your marketing plan can contribute to that goal.
One of the exciting developments in marketing is the rise of affordable AI tools that can supercharge efficiency. If used well, these can be like a force multiplier for your budget. For instance, content creation AI (like GPT-based tools) can help draft blog posts or social media copy faster, letting your team produce more content without proportional increases in spend.
AI-driven analytics can quickly identify which campaigns are working, so you can reallocate budget in real time. Marketers are increasingly embracing AI – over 60% say AI is important to their marketing success, and a majority (58%) of marketers want to invest more in AI-powered automation this year.
Why?
Because it saves time and money: 75% of marketers report using AI to reduce manual tasks, and many are seeing measurable ROI from AI investments. In practical terms, consider dedicating a slice of your budget to marketing technology (if you haven’t updated your toolkit recently).
This could mean subscribing to an AI writing assistant, an advanced marketing attribution software, or a chatbot for your website. These tools often pay for themselves by increasing productivity or conversion rates.
However, a word of caution: treat AI as an enabler, not a magic wand. Still budget for human oversight and quality control. The goal is to free up your team for high-level strategy and creative work by automating the repetitive stuff.
A great budget plan is not 100% rigid. The marketing world can throw surprises – a new social platform might emerge mid-year, a competitor’s campaign might change the landscape, or an unexpected PR opportunity could arise.
It’s wise to reserve a small portion of your budget (perhaps 5-10%) for opportunistic spends or experiments. This is your “marketing R&D” fund. You might test a small campaign on TikTok, try a pilot account-based marketing program, or experiment with a new content format (like an interactive webinar or a podcast series). By having funds earmarked for experiments, you won’t feel like you’re robbing your main programs if something interesting comes up.
Similarly, have a contingency for cost overruns. Maybe ad prices spike in Q4, or you need extra funds to capitalize on an unexpected spike in demand. A buffer prevents you from being caught flat-footed. When planning allocations, build in these safety valves.
Allocating budget isn’t a one-and-done at the start of the year. The best-run SaaS marketing teams treat their budget as a living document. Set a cadence (monthly or quarterly) to review performance of each channel and campaign against the money spent.
If your $10k/month LinkedIn Ads budget is yielding way below target, don’t be afraid to pull some of that and shift it to something performing better (maybe your content syndication or webinar program is blowing past goals and could scale with more funds). Regular check-ins let you course-correct early.
Also, communicate with your finance team or leadership about these adjustments – this shows you’re actively managing the budget to maximize returns, which builds confidence in your stewardship of resources. Keeping a close eye on your marketing profit and loss statement can help ensure your spending aligns with revenue goals and overall financial health.
The plan you make in January might need tweaking by June. As long as you keep the overall budget in line, reallocating within it is healthy and expected. Make it part of your process to ask: “Is this the best use of our next marketing dollar?” every so often, and adjust accordingly.
By following these allocation principles, you ensure your marketing budget is not just a spreadsheet exercise but a strategic tool. You’ll be funding the initiatives that align with your growth strategy, using technology to amplify results, and staying flexible to navigate the year’s surprises. The end result should be a well-balanced marketing mix that drives awareness, acquisition, and retention in tandem.
Even with the best intentions, it’s easy to stumble in the budgeting process. Here are some common mistakes SaaS companies make with their marketing budgets – and tips on how to avoid them:
Some teams decide on a marketing budget number (or simply copy last year’s) without a clear marketing strategy or goals. If you don’t know what success looks like, you can’t allocate money effectively.
Develop your marketing plan and key objectives first. For example, if your goal is to break into an enterprise segment, you might need budget for account-based marketing or enterprise events. Let your goals drive the budget needs, not the other way around. A strategy-first approach ensures every budget line has a purpose tied to outcomes.
Another pitfall is not tracking the performance of your marketing spend, leading to poor allocation over time. If you set your budget and then “set it and forget it” without measuring results, you could be pouring money into tactics that aren’t working.
Establish clear metrics for each part of your budget (e.g. cost per lead, conversion rate, pipeline generated, etc.). Use analytics tools or a simple spreadsheet to monitor these monthly. If a campaign isn’t delivering a reasonable ROI, be willing to adjust or cut it. If something’s performing well, consider increasing marketing spend there. Data-driven budget management will continually optimize your spend effectiveness.
This is about balance. Some teams panic and slash the marketing budget at the first sign of trouble (say, an economic dip or a missed quarter), which can cripple growth momentum. Others stick rigidly to the budget plan even when it’s clearly not working, burning cash on underperforming activities.
Take a balanced approach. Don’t cut marketing investment arbitrarily – remember that marketing often feeds the future sales pipeline, and cutting it too deep can starve growth (there’s a reason savvy companies keep marketing strong even in downturns).
Conversely, if external conditions change significantly (maybe a major new competitor entered, or costs for a channel doubled), convene a mid-year budget review to reallocate rather than blindly stay the course. In short, be neither knee-jerk nor inflexible; respond to data and context with measured adjustments.
It’s easy to focus budget on visible campaigns and forget the behind-the-scenes needs that make marketing successful. Things like proper tools, training, or even database cleanup might not be glamorous line items, but not funding them can hurt your efficiency.
Allocate a portion of budget for marketing operations and infrastructure. This includes your CRM or marketing automation software costs, data enrichment services, analytics tools, and team training on new technologies (like AI or new advertising platforms). For example, investing in training your team to use AI tools effectively could pay off big time in productivity. Treat these as foundational investments enabling your campaigns to run smoothly and effectively.
While we talked about benchmarks above, a mistake is clinging to an industry benchmark that isn’t right for your business. Maybe you heard “SaaS companies spend 40% of revenue on sales & marketing” and you assume your company should too, without considering context. If your product has a lower price point and relies on self-service signups, that level of spend might be overkill, for example.
Use benchmarks as a guide, but always tailor your budget to your specific situation. Take into account factors like your growth stage, your funding situation (profitable vs. raising capital), your competitive landscape, and past performance of your marketing. It’s okay to deviate from the average if you have a sound rationale. The goal is effective spending, not just meeting an industry statistic.
Budgeting for marketing in a SaaS business has always been part art and part science – and in 2025, with its unique mix of caution and innovation, getting it right is more important than ever.
The SaaS industry’s backdrop (recovering funding, saner valuations, active M&A, and the AI boom) means that while opportunities for growth are plentiful, they must be pursued with discipline and smart planning. A well-crafted marketing budget is your roadmap to navigate this landscape.
If you need expert guidance to create a data-driven, high-performing SaaS marketing strategy, SimpleTiger is here to help. We specialize in SaaS SEO, PPC, and content marketing that aligns with your growth goals. Schedule a free demo today to discuss how we can optimize your marketing efforts and drive measurable results.
Sean is Chief Operating Officer at SimpleTiger, responsible for operations, process creation, team utilization and growth, as well as sometimes direct client consultation.
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