Beyond Numbers: Crafting a 2025 Marketing Budget to Fuel Strategic Growth

It’s the most wonderful time of the year—budget season. For most corporations, Q4 is the time for planning, and it's the perfect opportunity for marketing to highlight its strategic value, ensuring the organization is set to meet or exceed its goals. Building a marketing budget requires carefully aligning financial resources with business objectives. After 20 years in marketing leadership across B2B organizations, I’ve learned you can’t just create a budget, share it with finance and the CEO, and hope for the best. Crafting a successful marketing budget requires cross-functional collaboration, a deep understanding of the company’s overall objectives, alignment on timing, and thoughtful analysis of past marketing performance to ensure marketing supports those corporate goals.

Here’s the five-step process I use each year to ensure our marketing budget is accurate and enables us to help the company achieve its targets.

1. Start with Strategy

There are three pillars to build your budget on: your marketing strategy, the tactical plan, and the budget itself. Before diving into numbers, have your strategy firmly in place. Early in my career, I used to jump straight into budget-building without a clear strategy—this was a mistake, and one I’ve seen peers also make. When you omit the marketing strategy before developing a plan or budget, you end up using your budget to develop a plan (list of tactics), and sometimes the strategy is never built out. Not having your strategy in place first almost ensures a mismatch between corporate objectives and what marketing needs to deliver.

What should your marketing strategy include? I always advocate for marketing to own the overall go-to-market strategy for the company, and with this in mind, your yearly strategy should include any updates based on market conditions, products in development, and feedback from customers and prospects that would require ICP or messaging adjustments. My standard GTM strategy deck typically includes market data and roadmap; who we sell to and targets (including personas and ICP); the SWOT and competitive landscape; demand creation and management including social media strategy and the website; messaging; services and support; how we sell and support our sales team; and partners. I initially will create this strategy deck within three months of joining a new organization by combining insights from customers, prospects, analysts, and team members, marrying this with existing data to develop a long-term GTM strategy. This strategic foundation then only requires yearly updates but makes all the difference. This is a big project, but one of the most important things you can do as a CMO. If you need a template, I’m happy to share the one I use. If you don’t own GTM, this is a great opportunity to partner closely with those who do and drive value. 

As part of the budgeting cycle, I always start thinking about my strategy for the next year 8 months into the current year. At that point, I will have enough information to update elements of the existing GTM strategy, start doing deep dives on existing data, request data that may be missing, and look at the current market trends to see where the market is going. This is also a great opportunity to engage with the cross-functional leaders on the team (product, success, etc.) to understand the timing of new product releases, and any updates and/or changes to customer success. Once you have this in place, it’s easy to start your work building different budget models.

2. Engage Your Business Partners

Think of marketing as the center of a hub-and-wheel diagram, where it connects with all major functions— CEO, CFO, product, sales, and customer success. The CMO can’t create a budget in isolation, so it’s essential to align with these partners to ensure the budget supports corporate objectives. Key partners include:

• CEO: A 2024 McKinsey report noted that while 90% of CEOs think they understand marketing’s benefits, only 50% of CMOs feel the same. This gap in priorities can hinder alignment. Nurturing a strong CEO-CMO relationship is critical, especially as only 10% of Fortune 250 CEOs have marketing experience. Use budget discussions to reinforce marketing’s strategic value and establish marketing as a vital contributor to the organization.

• CFO: According to Gartner, only 52% of senior marketing leaders can prove marketing’s value. Establishing a strong partnership with the CFO helps marketing gain visibility as a strategic investment, not just an expense. The marketing team should understand the financial metrics that matter most to the CFO, why they’re important, and their impact on results.

• CRO (Chief Revenue Officer): The CRO should be the CMO’s closest executive partner within each company. In each of my leadership roles, I sat within feet of the CRO and had my team sit with the extended sales team to ensure we could hear what was happening on calls, get immediate feedback, and collaborate on the fly to address challenges.  This relationship is essential, especially during budgeting. The CMO needs to fully understand capacity, planning, and quota models, while the CRO must be familiar with the funnel or bowtie and key growth opportunities. Mutual trust is crucial, with the CRO confident that marketing is strategically aligned to support revenue goals.

• Head of Customer Success: This partnership is equally vital. While the CRO focuses on driving new business, the Head of Customer Success is typically accountable for retention, engagement, upselling, and cross-selling. If marketing doesn’t support customer success in achieving these objectives, then the CMO is falling short. Marketing models should reflect this alignment, ensuring that budgets support both customer acquisition, growth, and expansion.

• Head of Product: The Head of Product is responsible for planning upcoming product releases, and the CMO needs a clear understanding of these timelines when building the marketing budget. Are the releases significant or incremental? Are they targeting new or existing customers (or both)? New products often necessitate adjustments in marketing strategy, so it’s essential that the CMO anticipates these needs and secures the necessary budget to support them effectively.

Ultimately, a CMO who fosters strong cross-functional relationships is positioned to drive meaningful impact and sustainable growth. By aligning marketing with the strategic priorities of the CEO, CFO, CRO, Customer Success, and Product teams, the CMO ensures that marketing not only meets its objectives but also elevates the entire organization. Building these connections turns marketing into a central, value-generating force that advances corporate goals and delivers lasting value to the business.

3. Gather Your Data

To build accurate budget models, gather performance data for each budget category over the past two years, including funnel/bowtie and conversion rates for net new customers, the install base, and partner channels, along with metrics like LTV, CAC, and ROI. Additionally, work with the sales leader or revenue ops team to understand capacity planning, benchmarks, and projections, which influence the marketing budget model assumptions.

In addition to current performance data, external benchmarks can also offer valuable context. Winning by Design, in partnership with Benchsights, provides an interactive tool for SaaS companies to benchmark performance. This service provides real-time insights into important sales metrics and is based on the bowtie, a data model that expands the marketing and sales funnels to include customer success metrics, particularly those around recurring revenue. The application may be found here. 

Source: Benchsights

4. Build Multiple Models

I don’t believe there is one single way to build the marketing budget that will yield perfect results. Rather I believe you need to build both a top-down and bottom-up model, map that to your funnel or bowtie model, and work through the inevitable gaps that exist. 

• Top-Down Approach: Starting with a baseline budget from the CFO, allocate funds across marketing functions based on historical data or fixed percentages. This method may risk disconnects between functions and can limit flexibility and be slow to adapt to changing circumstances. If the predetermined budget is insufficient or misaligned with evolving market conditions, this can hinder the ability of marketing to quickly respond.  

• Bottom-Up Approach: In this method, each marketing team member or department determines its specific needs to meet objectives, with the CMO aggregating these into an overall budget. This approach is more granular and detailed and often results in a more accurate budget, though it can risk inflation. This is why you also have to look at the budget from a top-down perspective.

Source: Corporate Finance Institute

Each budgeting exercise must be rooted in data, both historical and projected, and in conjunction with the budget, I always develop an old-school funnel or bowtie model to ensure the marketing budget aligns with the growth goals of the organization. If you need a funnel or bowtie model template, please let me know. I believe a funnel or bowtie model should always exist, be updated, and benchmarked throughout the year. As a marketing leader, understanding your conversion rates across the funnel or bowtie allows you to more easily be able to identify issues and optimization opportunities. And using this information as either part of your top-down or bottom-up budgeting process is critical. 

Source: K2 Marketing Strategy

I guarantee there will be a delta between the top-down and bottom-up models, and also with your funnel/bowtie model and this is where the magic happens. This is the conversation you have with the CEO, CFO, and your Sales leader. Based on data, what can marketing deliver in each model and what tradeoffs can be made by each to ensure marketing has the resources needed to help the organization achieve its growth goals? Can marketing work with sales and success to optimize conversion rates across the funnel and/or bowtie and yield stronger results? Are there tradeoffs in investments that need to be made? If so, what is the impact? 

If your CFO hasn’t already provided you with a projected number for next year, I recommend starting with the number you had this year. You can easily build out your model, using historical data, based on the budget you had this year. Once the model is built, I always create different scenarios so I can understand the potential impact. Instead of focusing on best, base, and worst-case scenarios, I recommend creating percentage-based scenarios (e.g., ±5%, ±10%) to easily adapt to changing financial projections.

When starting with your bottom-up model, I always start with my current budget but task the team with getting more efficient with the spend. Using historical data, what optimization can be done to yield cost savings? And what tests should we budget for to uncover additional opportunities? Similar to my top-down model, I recommend creating percentage-based scenarios (e.g., ±5%, ±10%) to understand the impact of cost optimization. 

5. Present the Budget

With input from key stakeholders, benchmarks, and models, it’s time to present the budget to the executive team and board. This phase is about selling both the strategy and the budget’s projected impact. When I present to the board, I keep it concise and focus on:

• Performance and KPIs: Highlight current performance versus KPIs, emphasizing ROI metrics like CAC and LTV to show marketing’s impact.

• Next-Year Goals: Reinforce how marketing’s strategy directly supports corporate goals.

• Industry Comparisons: Position your requested budget within industry standards, comparing it as a percentage of revenue.

• Preparation for Questions: Boards often ask about scenario planning and collaboration with sales and success. Be ready to discuss how the budget adapts to market shifts and share how GTM teams are aligned to achieve growth goals.

I love including a one-slide plan on a page with key details in a summarized, easy-to-read, understandable fashion. Inverta/Uptemp has a great template, which I’ve included below.

Source: Inverta/Uptemp

With a clear, data-driven approach, your marketing budget will not only be approved but set up to make a real impact on the company’s growth goals.

Crafting a marketing budget isn’t just a numbers exercise; it’s an opportunity to align marketing’s impact with the company’s growth trajectory. By collaborating closely with cross-functional partners—CEO, CFO, CRO, and other key leaders—and backing every decision with data, marketing can secure the resources it needs to drive measurable outcomes. This proactive, well-rounded approach transforms budgeting from a chore into a strategic advantage. With a thoughtful, integrated budget, marketing is positioned not only to support but to propel the company’s success, ensuring the organization can meet or exceed its goals in 2025 and beyond.