Marketing leaders face a daunting challenge as they prepare for 2025. Economic uncertainty, shifting market dynamics, and cautious corporate spending have created an environment where budgets are tighter, timelines are longer, and every dollar must be justified.

According to Forrester's Budget Planning Survey for 2024, only 35% of B2B marketers anticipate a budget increase of more than 5% for the coming year—a sobering statistic for teams tasked with driving growth. How can CMOs and senior marketing leaders navigate this landscape? 

To unpack these strategies, we turned to seasoned experts Kristen Hambelton, a 4x CMO with over 20 years of experience in driving growth, and Dennis Farkos, an accomplished CFO with a track record of aligning financial and go-to-market strategies to fuel growth while maintaining profitability.

In this blog, we’ll explore their advice from our Mavuus Coffee Chat, where they share practical tools, data-driven frameworks, and insights to help marketing leaders create resilient budgets that balance short-term performance with long-term brand-building.

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Table of Contents:

1. The Current Economic Landscape and Its Impact on Marketing Budgets
2. Frameworks for Building Your 2025 Marketing Budget
3. Marketing Budget Trade-Offs: People or Programs?
4. Brand or Demand: How to Split Your Marketing Budget
5. Metrics and Benchmarks to Guide Your Marketing Budget
6. Resources for Marketing Budget Planning

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1. The Current Economic Landscape and Its Impact on Marketing Budgets

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As we move into 2025, economic uncertainty continues to shape how companies approach their budgets. “There just appears to be a pause right now,” explained Dennis Farkos, reflecting on the collective hesitancy among organizations as they assess fluctuating market conditions. 

Conflicting market indicators drive this hesitation. While some sectors show resilience and growth, others remain volatile. “Each time we get a new employment report, there’s good news, there’s bad news,” Dennis explained, reflecting on the difficulty businesses face in making definitive financial plans. Many organizations are still assessing how new policies, market shifts, and broader economic conditions will impact their industries.

This uncertainty has delayed many budget approvals as organizations seek greater clarity before committing to long-term investments. “I think everyone is trying to stretch the approval of their budgets out as long as they can,” Dennis added, highlighting how businesses are reluctant to make decisions without a clearer economic picture.

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What Does This Mean for Marketing Leaders?

This extended timeline can feel like a bottleneck for marketing leaders, but it also provides an opportunity to approach budgeting strategically. In this environment, flexibility and preparedness are essential. Marketing leaders must think beyond traditional budgeting methods and embrace scenario planning to account for various economic outcomes. 

Dennis recommended a tiered approach to budgeting, emphasizing the importance of preparing for multiple scenarios:

• An optimistic plan might allow for larger investments in demand-gen campaigns.
• A pessimistic plan could prioritize only essential activities.
• A middle-ground plan strikes a balance, preserving flexibility while maintaining steady progress.

As marketing leaders navigate these uncertainties, they must also contend with increasing demands for accountability from finance teams. Dennis stressed the importance of tying every dollar spent to clear, measurable outcomes. This shift reflects a broader trend: CFOs and executive teams are placing a stronger emphasis on profitability and ROI in their decision-making.

“Unlike any time in the past, profitability and the value out of each dollar that we spend is going to be more important than it’s ever been,” Dennis added. For marketing leaders, this means going beyond traditional performance metrics to demonstrate the tangible business impact of their investments. Whether by showing how campaigns contribute to pipeline growth or leveraging long-term metrics like customer lifetime value (LTV) to acquisition cost (CAC) ratios, marketing teams must present a compelling case for every dollar requested.

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2. Frameworks for Building Your 2025 Marketing Budget

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Crafting a reliable marketing budget requires a blend of strategic benchmarks and validation processes. Hambelton and Farkos shared their proven frameworks for developing budgets that align with company goals while addressing the challenges of today’s economic climate.

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Start with Benchmarks

Hambelton emphasized the importance of starting with industry benchmarks to ground the budgeting process. She explained, "I usually start top-down...because when you start the budgeting process, you have bits of information to work from." 

For most B2B companies, the rule of thumb is to allocate 35-40% of total revenue to sales and marketing combined. From there, Kristin recommends splitting the allocation:

• 60% to sales
• 40% to marketing

For example:

• In a $100 million company, 35% of revenue would mean a $35M sales and marketing budget.
• Of that, $14M would typically go to marketing.

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Validate with a Bottom-Up Approach

Hambelton doesn’t stop at benchmarks. She emphasized the importance of validating top-down estimates with program-level planning: “You have to make sure you can do the programs and campaigns that you need to do.”

To apply this approach:

• Identify key marketing programs and campaigns.
• Calculate the specific costs needed to execute those initiatives.
• Ensure these align with revenue goals and strategic priorities.

This dual approach ensures your budget is both realistic and strategically aligned.

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Factor in Sales Capacity

Farkos introduced another crucial validation layer: assessing sales capacity. This ensures marketing efforts are calibrated to what sales can realistically deliver.

Dennis shared his process:

1. Start by asking sales leaders, “What is your capacity to sell this year?”
2. Factor in the number of quota-carrying reps and their expected output.
3. Assume no additional hires to set a baseline.

For example, if sales can deliver $5M in new revenue with current resources, marketing must align its efforts to support that goal without overloading the funnel or under-delivering.

Once sales capacity is apparent, Dennis advises working backward from revenue goals:
“Let’s work backward using our funnel metrics...and translate that to a number of leads.”

To apply this:

• Identify conversion rates for each stage of your funnel.
• Calculate the total leads required to meet sales targets.
• Align these lead-generation needs with your marketing budget.

This approach ties marketing spend directly to measurable outcomes, making it easier to justify budget requests to finance. By combining top-down benchmarks, bottom-up program validation, and sales capacity alignment, marketing leaders can build budgets that deliver results while gaining the support of finance and sales.

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3. Marketing Budget Trade-Offs: People or Programs?

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Balancing headcount and program spend is a perennial challenge for marketing leaders, and 2025 brings heightened stakes as organizations face economic uncertainty. While the appropriate split depends on organizational size, maturity, and business model, industry benchmarks and expert insights provide a solid foundation for decision-making.

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Benchmarks to Guide Your Planning

For Hambelton, the starting point is clear: the long-standing industry benchmark of a 50-50 split between headcount and program spending. However, real-world applications often demand adjustments based on the organization's specific needs. "I use that as my baseline, and then I usually wind up—there's never been variation beyond 60-40. So I'll wind up 55-45 or 58, but honestly, I've never varied."

In contrast, Farkos suggested a more program-heavy allocation for 2025 to reflect the uncertain economic environment. "I'm pushing our team to be 65-35," Dennis noted, advocating for 65% of marketing budgets to go toward programs and 35% toward headcount. 

He stressed that this approach is rooted in adaptability: "Using resources that you can turn on and off easily is crucial so that if things don’t play out as optimistically as we believe, we have the ability to dial things back without doing too much damage." For Farkos, programs—whether they involve demand generation campaigns, paid media, or outsourced content production—offer a degree of scalability that headcount does not. 

Marketing teams can adjust their programmatic investments as needed in response to external conditions, ensuring they remain agile without making long-term commitments. "With the unknown picture of what’s ahead, using resources that are adjustable is key. It’s easier to scale back programs without damaging the structure of your team," advised Farkos.

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The Role of AI in Program Efficiency

One area that could influence the headcount-to-program ratio in 2025 is the growing adoption of AI-driven tools. From content generation to campaign optimization, AI has the potential to streamline marketing efforts and reduce reliance on human labor. 

However, Hambelton cautioned against overestimating the immediate impact of these tools. "I’m not comfortable saying, yeah, we’re going to see this hard 20% improvement because I don’t think we’re there yet." She suggested marketing leaders approach AI-driven efficiencies cautiously, treating them as incremental enhancements rather than transformative cost-cutting solutions. A modest expectation, such as a 5% or 10% improvement in program efficiency, might be more realistic for most organizations.

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Steps for Marketing Leaders

The right balance depends on your organization's specific goals and resources. For instance, companies with leaner teams may need to allocate more of their budget to headcount to maintain operational capacity, while those with established teams may find more room to scale up programs.

To find the right balance for your team, consider these steps:

1. Evaluate Your Existing Resources: Assess your team’s capacity to execute campaigns. If bandwidth is tight, a higher headcount allocation may be necessary.
2. Prioritize Scalability: Invest in program resources that can be easily adjusted in response to budget changes or shifts in market conditions.
3. Incorporate AI Thoughtfully: Test AI-driven tools for efficiency gains but keep expectations realistic until proven ROI metrics emerge.
4. Align with Finance and Sales: Collaborate with finance to ensure program allocations are tied directly to measurable outcomes and with sales to understand resource needs across the funnel.

By approaching headcount and program spend as a dynamic balance rather than a static ratio, marketing leaders can position their teams for success while staying agile in the face of uncertainty. 

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4. Brand or Demand? How to Split Your Marketing Budget

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When it comes to budget allocation, the question of how to divide resources between demand generation and brand awareness is one of the most critical—and challenging—decisions for marketing leaders. This balance directly influences both short-term pipeline goals and long-term market positioning, making it essential for CMOs to weigh their business's needs carefully.

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The CMO’s View

Hambelton recommends a 70% demand generation and 30% brand awareness split as a baseline. This breakdown provides a solid starting point for most B2B organizations. 

However, this is not a hard-and-fast rule. Kristin noted that the split may shift depending on specific business goals. “Every once in a while, you’ll run into a year where you have a ridiculously heavy lift on demand gen,” she said. For example, launching a significant new product or reclaiming lost market share might temporarily require a heavier demand focus.

Conversely, a more balanced or even brand-heavy allocation could be necessary when building or revitalizing brand equity. “I joined one company where we were number four in share of voice. Within one year, we moved up to number one because we blended the budget at 50-50.”

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The CFO’s View

From a financial perspective, Farkos highlighted the inherent tension between these two areas. CFOs naturally lean toward demand generation because of its measurable impact on revenue. “I lead heavily towards demand gen versus brand,” Dennis admitted. For finance leaders, the appeal of demand gen lies in its ability to attribute spend to specific outcomes like leads, opportunities, and closed deals.

Still, Dennis acknowledged the necessity of brand investment, particularly in industries where reputation and trust are critical. “People have to know who you are,” he stated plainly, adding that brand awareness creates the foundation for future demand. This is especially relevant for companies selling to customers who may not even realize they have a problem yet. As Dennis explained, “There are customers that are making decisions to solve problems, and then there are customers that need to be nudged that they don’t even know they have the problem.”

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How to Balance Brand and Demand Generation

To strike the right balance, CMOs must adopt a strategic approach that aligns with company goals and financial realities. As Hambelton pointed out, brand and demand are not mutually exclusive; they work together to create a sustainable pipeline. “If people don’t know who you are, they can’t find you. And if you’re not in front of them, they won’t feel comfortable buying from you,” she explained.

One way to maintain this balance is to prioritize demand generation while carving out a dedicated portion of the budget for brand-building initiatives. For example, as Dennis suggested, marketers can use brand initiatives to create awareness and “nudge” prospects, while demand campaigns capitalize on that familiarity to drive conversions.

Finally, CMOs must be prepared to defend their brand investments to finance and leadership teams. Hambelton emphasized the importance of using research and benchmarks to strengthen these conversations. For instance, highlighting studies that link brand investment to improved performance marketing results can help shift the narrative from short-term cost to long-term value.

In the end, a thoughtful allocation between brand and demand ensures a balanced marketing strategy and positions the business for immediate success and sustained growth.

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5. Metrics and Benchmarks to Guide Your Marketing Budget

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For marketing leaders navigating budget constraints and economic uncertainty, metrics like cost per lead (CPL) and the lifetime value (LTV) to customer acquisition cost (CAC) ratio provide a clear lens for decision-making. By leveraging CPL and LTV to CAC, marketing leaders can go beyond justifying budgets—they can align with sales and finance to build a strategy that fuels meaningful, measurable results.

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Cost per Lead

One commonly used metric is cost per lead (CPL). However, as Hambelton pointed out, there’s significant variability based on industry and channel.

“I’ve been in some industries where I can get a conversion for $100. In others, it’s like $1,500,” she explained. Events and trade shows, for example, tend to be the most expensive, while digital campaigns, such as paid search, can vary widely depending on the market and targeting approach.

For benchmarking, Kristin suggested a general range: “I use $100 to $1,000 as a baseline, knowing that shows are going to be the heavier lift.” She also noted that newer strategies, such as product-led growth (PLG), can have unique cost structures early on in their implementation.

Ultimately, Kristin highlighted the importance of validating your CPL as part of a broader budgeting approach: “After I’m done with a top-down budget, I do a bottom-up by programs just to validate that I can do the programs and the campaigns I need to do.”

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LTV to CAC Ratio

While CPL is valuable, both Hambelton and Farkos agreed that it’s not the only or even the most critical metric. Hambelton emphasized the importance of focusing on the lifetime value (LTV) to customer acquisition cost (CAC) ratio, which resonates strongly with finance teams.

“LTV to CAC is one that our finance friends love,” Kristin noted. The calculation measures how much value a customer generates over time compared to the cost of acquiring them. The ideal benchmark, according to Hambelton, is a ratio of 3:1 or higher.

“When I do that LTV to CAC calculation, I usually find that we’re underspending in marketing,” Hambelton explained. She uses this metric to make the case for larger budgets, pointing out that strategic investments in marketing can lead to better long-term outcomes.

By applying LTV to CAC and CPL, marketing leaders can balance efficiency and effectiveness in their planning. As Hambelton reminds us, these metrics are essential tools for aligning with finance and advocating for what marketing needs to succeed. 

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Building Collaborative Partnerships Across the C-Suite

Strong partnerships with sales and finance ensure that marketing goals align with broader business objectives, creating a united approach to driving growth. A key to successful budget planning is establishing clear agreements on who is responsible for generating new revenue. As Hambelton emphasized, this is not just about dividing tasks but about fostering collaboration and accountability.

“If we have to generate $50 million of new ARR next year and $20 million is new, that’s...an important sourcing discussion to have with your sales leader, your partner or channel leader, and even your product leader if you’re doing PLG," Hambelton explained. This conversation ensures that each team understands its role in revenue generation, avoiding confusion or unmet expectations.

Hambelton advocates for a balanced approach: "If you’re going to hold me accountable to generate 100% of all the new revenue, well, I’m going to need some more budget—and maybe we don’t need as many sellers because if you’re not prospecting at all and I’m originating it all, I need dollars to do that."

She also advised against finger-pointing and highlighted the need for unity. “We’re a team, and we win as a team or we lose as a team. And when I say team, I mean marketing, sales—whoever’s generating the revenue. So, I’m very careful on sourcing.”

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6. Resources for Marketing Budget Planning

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Navigating your 2025 marketing budget requires the right tools and insights. Here are some resources recommended by marketing leaders in the Mavuus community to help you benchmark, plan, and optimize your strategy:

• Keybank Annual SaaS Benchmark Survey
• Gartner: The State of 2024 Marketing Budgets for CMOs
• Deloitte: The Spring 2024 CMO Survey Insights
• Insight Partners Marketing Spend Benchmarks
• Insight Partners SaaS Periodic Table/Calculator
• OpenView Partners Product Benchmarks (for PLG)
• OpenView Partners SaaS Benchmarks Report
• Salesforce State of Marketing Annual Report

Additionally, follow these experts for ongoing insights and practical tips:

• David Spitz, Founder of BenchSights, on LinkedIn
• Peter Walker, Head of Insights at Carta, on LinkedIn

By leveraging these resources, you’ll be better equipped to build a resilient marketing budget, align with finance and sales, and stay competitive in 2025. 

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Steering Your Marketing Budget to Success in 2025

As we look toward 2025, marketing leaders face a landscape of uncertainty and opportunity. 

However, with thoughtful planning and a collaborative approach, marketing leaders can confidently prepare to meet their goals. A vital starting point is to embrace scenario-based planning. By developing budgets for best-case, worst-case, and middle-ground scenarios, you can remain agile and responsive to whatever changes the year may bring.

Equally important is aligning closely with your sales and finance counterparts. Collaboration across the C-suite ensures that every marketing dollar is tied to measurable outcomes, fostering trust and optimizing resources for growth. 

Additionally, finding the right balance between short-term demand generation and long-term brand investment is critical. While performance marketing often yields immediate results, brand-building lays the foundation for sustained market presence and customer loyalty.

2025 is full of possibilities. With the right mindset, tools, and support, this can be the year you make your most significant impact yet.

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Don’t navigate 2025 alone. Join Mavuus to connect with experts, learn from seasoned leaders, and ensure your budget becomes the foundation for measurable success.

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Join Mavuus Today!

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