Marketing budget as a percentage of revenue: wrong first question

In 2022, Vinamilk, Vietnam's largest dairy company, spent VND 9,916 billion on promotions, in-store displays, product sampling, sales support and advertising. That is more than VND 27 billion a day (CafeF, a Vietnamese financial news site). In 2026, CMOs in North America, the UK and Europe surveyed by Gartner spent an average of 7.8% of revenue on marketing (Gartner). Put these two numbers side by side while drafting the 2027 budget, and a founder will type the familiar question into Google: what should the marketing budget be as a percentage of revenue?

Our view at 126Insights: the percentage is the output of a calculation, not the starting point. Before asking how many percent, answer three questions in order: how much market share do you want to win, how loud are your competitors, and how much cash flow can you carry?

What percentage of revenue do big companies spend on marketing?

According to Gartner's CMO spend survey, the average marketing budget in 2025 was 7.7% of revenue, the same as in 2024 (Gartner, May 2025). In 2026 it edged up to 7.8% (Gartner, May 2026). According to Campaign, half of the CMOs in the 2025 round had budgets of 6% of revenue or less; the article also singles out a low-spending group at 4% or less and a high-spending group above 10.5%.

The people inside those budgets do not think the average is enough. 59% of CMOs said their 2025 budget was too small to execute their strategy (Gartner, May 2025). In 2026 the figure was 56% (Gartner, May 2026).

The most telling part is who was surveyed. According to Demand Gen Report, the 2025 round covered 402 marketing leaders in North America, the UK and Europe, surveyed in February and March 2025, most of them at companies with more than USD 1 billion in revenue. The 2026 round covered 401 CMOs in the same regions, surveyed from January to March 2026, again mostly at companies above USD 1 billion (Gartner, May 2026). A Vietnamese brand with a few tens of billions of dong in revenue that copies 7.8% is copying companies hundreds of times its size, selling in very different markets.

The average is 9%, but the middle company spends 5%

The CMO Survey 2026 (released in March 2026), run by Duke Fuqua, Deloitte and the AMA with data collected in January 2026, reports marketing budgets at 9.0% of revenue (The CMO Survey). That is more than a percentage point above Gartner's figure.

The detailed tables in the March 2026 release tell a different story. Across 154 valid answers, the mean was 8.96% but the median was only 5%. Some companies spent nothing, and one spent almost 43% of revenue (Topline Report). The company in the middle spends 5%. A small group of very heavy spenders pulls the mean to nearly double the median.

It is like asking “what is a normal salary?” in a room that holds both interns and directors. The average is correct arithmetic and describes nobody. Whenever you meet a percentage, ask three things: whose number is it, in which industry, at what scale. The answers usually tell you more than the number does.

Photo by Windows on Unsplash

Do companies that are good at AI spend less on marketing?

If you expect AI to let you cut the marketing budget, Gartner's data does not show it. In 2026, CMOs put an average of 15.3% of their marketing budget into AI. Only 30% have “mature” AI capabilities, and that group spends 8.9% of revenue on marketing, above the overall 7.8% (Gartner, May 2026). According to Chief Marketer, 9% of respondents have “fully optimized” AI workflows, and they spend an average of 11% of revenue.

This is a correlation. Companies with spare cash may simply invest more in AI, and the data does not say which way the cause runs. What we can say is that the group using AI best also spends more than average. If your 2027 plan has a line that reads “we have AI now, so cut marketing”, that line rests on an assumption the available data does not support.

Reading Vietnamese financial reports: what counts as “marketing spend”?

Back to the VND 27 billion a day. According to CafeF, Vinamilk's VND 9,916 billion in 2022 equaled 16.5% of its revenue of nearly VND 60,000 billion. Looking only at that number, an outsider might conclude Vinamilk spends twice the Gartner average on advertising.

That figure bundles many line items. According to Fili, another Vietnamese business outlet, Vinamilk's advertising and market research spend alone was VND 1,198 billion in 2022, down from almost VND 2,100 billion in 2019. For the same company in the same year, “marketing spend” can be VND 9,916 billion or VND 1,198 billion, depending on which line you pick. The gap sits in promotions, displays, product sampling and sales support.

Also per Fili, in 2022 Vinamilk and Masan cut advertising and promotion spending while Sabeco and Quang Ngai Sugar raised it. Each company follows its own strategy. The trouble starts when an outsider takes the total from a report, divides it by revenue and treats the result as a brand budget to copy. Some spending sits outside the marketing line yet does marketing's work, like the prime corner locations of Katinat, a Vietnamese café chain. Other spending carries the marketing label but is closer to a discount for the sales channel, like the vouchers sellers absorb during double-date sales such as 11.11.

How much marketing budget is enough to win market share?

Compare voices. Picture a crowded quán nhậu (a Vietnamese beer-and-food joint, loud by design). To hear each other at your table, you have to talk louder than the table next to you. There is no standard volume; the right level depends on who is sitting around you.

Share of voice (SOV) is your share of advertising and media presence out of the whole category. Subtract market share from SOV and you get ESOV (excess share of voice). Suppose your brand has 5% market share but only 3% of the category's voice: ESOV is minus 2 points, and you are speaking more quietly than your position deserves. At 126Insights we use ESOV as a way to frame the budget question, not as a formula: if you want to win new customers, aim for a share of voice above your current market share, then work out the money. For small brands, talking louder than your wallet usually happens through content, as in some cases in our piece on small brands beating big ones with content.

You do not need to buy SOV data to start. A rough method: on the e-commerce marketplace where you sell, search 5 to 10 keywords in your category and note which brands hold the sponsored slots. Repeat once a month and you have a crude SOV table. It is crude, but it sits closer to your market than the average of billion-dollar companies in the West.

A three-step frame before you convert to a percentage

1. Choose a market share goal for 2027: hold steady, grow slightly, or take ground from a specific competitor.
2. Estimate the share of voice you need. From your crude SOV table, work out how much more visible you must be to push your voice above the target share, then convert that into money at the ad prices you currently pay. At this step, also decide how much goes to long-term brand building and how much to short-term demand.
3. Check the result against gross margin and cash flow. Vietnamese elders say “liệu cơm gắp mắm” (size up the rice before you reach for the fish sauce), meaning spend according to what you have. If the number from step 2 exceeds what your margin can bear, lower the share target or narrow the battlefield to one channel, one region, one customer group. Spread across five channels, your budget will be too quiet in all of them.

Only now divide by projected revenue. A result above or below Gartner's 7.8% can both be reasonable, as long as it comes from a market share goal and what your cash flow can carry.

This week, before the budget meeting, open the marketplace where you sell, search five keywords from your category and count each brand's sponsored slots. Do you know how much of your category's voice your brand holds? That question comes before “what percentage of revenue”.