How to Set Your Marketing Budget for 2027

Start from the customer, not last year's number

Most budgets are last year's figure plus or minus a percentage. That tells you nothing about whether the money will work. A better starting point is a simple question: what is a new customer worth to you, and how much of that can you afford to spend winning one?

For a DTC brand, work out the gross profit from a customer's first order and from the orders that typically follow. For a high-ticket service business, use the gross profit on a typical client. The amount you can afford to pay to acquire one customer is your target cost per acquisition. Everything else in the budget follows from it.

Work backwards from your growth target

Once you know your target cost per new customer, the maths is straightforward. Decide how many new customers you need in 2027 to hit your revenue goal, then multiply by the cost you can afford for each. That is the acquisition budget your plan needs.

If the number feels too high, the problem is usually one of three things: the customer isn't worth enough yet, the conversion rate is too low, or you are relying entirely on paid channels. Each has a different fix, and fixing conversion is usually the cheapest.

Split spend between building and capturing demand

Capture channels, such as paid search, shopping ads and retargeting, reach people already looking. They are efficient but limited by how many people are searching. Build channels, such as PR, SEO, content and broad paid social, create the demand that capture channels harvest later.

A budget that is all capture stops growing when search volume runs out. A budget that is all build takes too long to pay back. Most growing businesses need both, with the balance set by how well known the brand already is.

Budget for AI search in 2027

Buyers increasingly ask AI assistants which brand to choose before they search. Being named in those answers depends on reviews, press coverage and clear information on your own site. None of that sits neatly in a paid media line, so give it a line of its own: PR, reviews and content that answers buyer questions.

Read why AI engines cite some brands and ignore others for what drives those answers.

Review it every quarter

An annual budget set in December is out of date by March. Review it quarterly against cost per new customer, branded search and pipeline or revenue by channel. Move money towards what is working and away from what is not, and keep a small test budget so you can try new channels without waiting for next year's plan.

Planning 2027? Book a free 20-minute growth audit and we will show you where your growth comes from today and the three things we would change first.