SaaS Marketing Spend: What the Benchmarks Tell You

SaaS companies typically spend between 15% and 35% of revenue on marketing, though early-stage companies burning toward growth often push well above that. The range is wide because the right number depends almost entirely on where a company sits in its growth curve, how much of its growth comes from product-led motion versus sales-assisted, and whether it is still buying market share or starting to harvest it.

The benchmarks are worth knowing. But the more useful question is what the money is actually doing, and whether the allocation reflects a real growth thesis or just inherited habit.

What Do SaaS Marketing Budgets Actually Look Like?

The most cited reference point for SaaS marketing spend comes from public company filings, where sales and marketing as a combined line item typically runs between 20% and 50% of revenue for growth-stage companies, and closer to 15% to 25% for mature businesses with established market positions. Marketing alone, separated from sales, tends to sit in the 10% to 20% range for companies at scale.

Early-stage companies, particularly those that have raised venture capital and are under pressure to grow quickly, often operate outside these ranges entirely. It is not unusual to see pre-revenue or early-revenue SaaS businesses spending more on sales and marketing than they generate, treating the investment as the price of category entry rather than a function with an expected short-term return.

Product-led growth companies tend to show lower marketing spend as a percentage of revenue, partly because the product itself does acquisition work that would otherwise require paid media or a sales team. But even here, the headline number can be misleading. The cost of product features built specifically for viral loops, referral mechanics, or free tier conversion is rarely counted in the marketing budget, even though it is functionally marketing spend.

If you are trying to benchmark your own business, the most useful comparison is not the average across all SaaS companies. It is the spend profile of companies at a similar growth stage, with a similar go-to-market motion, in a similar competitive environment. A horizontal infrastructure tool competing against two incumbents needs a very different marketing budget than a vertical SaaS product with a clear niche and limited direct competition.

How Does Stage of Growth Change the Equation?

This is where most benchmarking conversations go wrong. Companies compare their marketing spend percentage against a blended average that includes businesses at completely different stages, with different competitive dynamics and different definitions of what marketing is supposed to achieve.

At the seed and Series A stage, the primary job of marketing is often to help the business find out whether a category exists and whether the product can earn a position in it. Spend at this stage is exploratory by nature. The return on that spend is information as much as pipeline. Companies that treat early marketing purely as a demand generation exercise tend to under-invest in the brand and positioning work that makes later demand generation possible.

By Series B and C, the expectation shifts. Marketing should be demonstrably contributing to pipeline and revenue. This is where the pressure to show attribution increases, and where I have seen companies make the mistake of cutting everything that cannot be directly measured. The problem is that the most measurable spend is usually the spend that captures intent that already exists, not the spend that creates it.

I spent a long period earlier in my career overweighting lower-funnel performance activity because the numbers were clean and the attribution was tidy. What I eventually understood is that a meaningful portion of what performance marketing gets credited for was going to happen anyway. The buyer had already decided. The paid search click was the last touch, not the reason. When you optimise your entire budget around that last touch, you stop investing in the earlier work that creates the buyer in the first place. Growth starts to feel harder, and it is, because you have quietly stopped reaching anyone new.

At scale, the challenge reverses. Mature SaaS companies often have well-established demand capture infrastructure and under-invest in the brand and content work that keeps the top of the funnel healthy. The marketing budget looks efficient because cost-per-lead is low, but the company is harvesting a reputation it built years ago rather than building the one it will need in five years.

For a broader view of how go-to-market strategy shapes these decisions across the growth curve, the Go-To-Market and Growth Strategy hub covers the underlying frameworks in more depth.

What Does SaaS Marketing Spend Actually Buy?

The breakdown of where the money goes matters as much as the total. SaaS marketing budgets typically cover some combination of paid media, content and SEO, events and field marketing, product marketing, brand, and the tools and technology that underpin all of it.

Paid media, particularly paid search and LinkedIn for B2B, tends to dominate budgets at growth-stage companies because it is fast to deploy and easy to measure. The problem is that it is also the most competitive and the most expensive per impression. When everyone in a category is bidding on the same terms, the economics deteriorate quickly. I have managed budgets where a significant share of paid search spend was going to terms where we were competing against four or five well-funded competitors for buyers who were already deep in a decision process. The cost of winning that click was high and the incremental value of our presence there was often low.

Content and SEO tend to be under-resourced relative to their long-term value, partly because the return is slower and harder to attribute. A piece of content that ranks well and drives qualified traffic for three years does not fit neatly into a quarterly marketing report. This creates a systematic bias toward spend that shows up in this quarter’s numbers, at the expense of assets that compound over time.

Events, whether owned or third-party, remain a significant line item for many B2B SaaS companies, particularly those selling to enterprise buyers where relationships and in-person credibility still carry weight. The ROI on events is notoriously difficult to measure, which makes them vulnerable to budget cuts during downturns, sometimes rightly and sometimes not.

Product marketing is often the most under-funded function relative to its commercial impact. Positioning, messaging, competitive intelligence, and sales enablement are not glamorous, but they are the infrastructure on which everything else runs. Companies that treat product marketing as a support function rather than a strategic one tend to have marketing that generates noise without conviction.

Martech is its own conversation. The average SaaS marketing stack has expanded considerably over the past decade, and the cost of tools, integrations, and the people needed to operate them is a meaningful and often underestimated portion of the total marketing budget. The tools are not the strategy, but they have a way of consuming budget that could otherwise fund the strategy.

Why the Efficiency Metrics Can Mislead You

SaaS companies are generally better at measuring marketing than most other industries. The combination of product analytics, CRM data, and attribution tooling gives marketing teams a level of visibility that consumer goods or professional services businesses rarely have. This is mostly a good thing. But it creates a specific failure mode worth naming.

When you can measure everything, the temptation is to optimise everything. And when you optimise everything, you tend to converge on the activities that look best in the data, which are usually the activities that capture existing demand rather than create new demand. The pipeline looks healthy, the cost-per-acquisition looks reasonable, and the marketing team looks productive. But the business is slowly narrowing its addressable audience without realising it.

I have seen this play out at companies that were genuinely good at performance marketing but had essentially stopped doing anything that a first-time buyer would encounter before they were already in the market. The brand was invisible to anyone who did not already know the product existed. The SEO was narrowly focused on high-intent terms. The content answered questions that buyers ask at the end of a decision process, not the beginning. Everything was measurably efficient and strategically insufficient.

The relationship between spend and growth is not linear, and the attribution models that most SaaS companies use do not capture the full picture. Go-to-market is getting harder for most companies, and a significant part of that difficulty is self-inflicted: budgets allocated to capture demand that the same budgets are no longer building.

There is also a version of this problem at the product level. If a product genuinely delighted customers at every point of contact, word of mouth, referral, and organic growth would carry more of the load. Marketing is often doing compensatory work, filling in for a product or customer experience that is not quite compelling enough to generate its own momentum. That is a legitimate use of marketing spend, but it is worth being honest about what problem the budget is actually solving.

How Should You Think About Setting the Number?

The most useful starting point is not a benchmark. It is a clear articulation of what marketing is supposed to achieve in the next 12 to 24 months, and what it would cost to do that well.

That sounds obvious, but most SaaS marketing budgets are set by starting with last year’s number and adjusting up or down based on revenue performance and investor expectations. The result is a budget that reflects history more than strategy. If the business is trying to do something materially different, whether that is entering a new segment, repositioning against a new competitor, or building a category that does not yet exist, the historical budget is not a useful guide.

A more useful process starts with the growth target, works backward to the pipeline required to hit it, and then asks what marketing investment would be needed to generate that pipeline given current conversion rates and average deal sizes. This gives you a demand-side view of the budget. You then layer in the brand and awareness investment needed to keep the top of the funnel healthy over a longer time horizon, and the product marketing investment needed to make the whole system work efficiently.

The number you arrive at may be higher or lower than the benchmark. If it is significantly higher, you have a conversation to have with the business about whether the growth target is realistic given the available budget. If it is significantly lower, you have a different conversation about whether you are being ambitious enough. Neither outcome is wrong. The point is that the budget is the output of a strategy, not the input to one.

When I was running agencies, the clients who got the most from their marketing investment were rarely the ones with the biggest budgets. They were the ones who had a clear view of what they were trying to achieve, an honest assessment of what was working, and the discipline to stop funding activity that was not contributing to either. That combination is rarer than it sounds.

Understanding how to structure that investment across channels and functions is part of a broader set of go-to-market decisions. The Go-To-Market and Growth Strategy hub covers how high-growth companies think about those decisions at each stage of the business.

What the Public SaaS Benchmarks Are Actually Telling You

Public company filings are the most reliable source of SaaS marketing spend data, because the numbers are audited and the definitions are consistent. The limitation is that public SaaS companies are not representative of the broader SaaS market. They are the companies that survived and scaled, which means their spend profiles reflect what worked in retrospect, not a prescription for what will work for an earlier-stage business.

That said, a few patterns are consistent enough to be useful. Companies that have achieved efficient growth at scale tend to have sales and marketing combined running at 20% to 30% of revenue, with the ratio of sales to marketing spend varying significantly by go-to-market motion. High-velocity, low-ACV products tend to be more marketing-heavy. Enterprise products with long sales cycles and complex buying committees tend to be more sales-heavy, with marketing playing a supporting role in pipeline generation and sales enablement.

The companies that have historically shown the best long-term unit economics tend to be those that invested in brand and content early, built a defensible organic presence, and used paid media to accelerate rather than substitute for that organic foundation. The companies that relied heavily on paid acquisition to drive growth often found that their customer acquisition costs increased as they scaled, because they were competing for a finite pool of high-intent buyers rather than expanding the pool.

BCG research on go-to-market strategy and brand has consistently pointed to the long-term value of brand investment even in categories where performance marketing dominates the short-term conversation. The challenge for SaaS companies is that brand investment is hard to justify in a funding environment that rewards short-term growth metrics, which creates a structural bias toward the spend that shows up in this quarter’s numbers.

Growth hacking approaches, which have been popular in SaaS circles for over a decade, tend to work well in the early stages of a product’s life when the market is new and conventional tactics have not yet been applied. Growth hacking examples from well-known SaaS companies often look more straightforward in hindsight than they were in practice, and many of the tactics that worked for early movers in a category do not translate cleanly to a market that has since matured.

The honest conclusion from the benchmarks is that there is no single right number for SaaS marketing spend. The range is wide because the variables that determine the right number are wide. What the benchmarks can tell you is whether you are operating in a plausible range for your stage and motion, and whether the mix of your spend is consistent with how companies at similar stages have historically driven sustainable growth.

What they cannot tell you is whether your marketing is actually working. That requires a harder conversation about what the money is buying and whether the business is reaching the people it needs to reach, not just the people who were already on their way to buying.

About the Author

Keith Lacy is a marketing strategist and former agency CEO with 20+ years of experience across agency leadership, performance marketing, and commercial strategy. He writes The Marketing Juice to cut through the noise and share what works.

Frequently Asked Questions