How Much Should You Spend on Advertising?

It's the question I get more than any other.

How much should I spend on advertising?

Sometimes it comes out quieter.

Do I really need to spend on advertising at all?

Here's the short answer.

Yes. And probably more than you think.

If you're a growing consumer brand, plan on spending 20% of your revenue or more on advertising once you start to scale. Where that money goes matters just as much as how much you spend.

Let's walk through both.

How Much Should You Spend on Advertising? Start With 20% of Revenue

A respected CMO colleague shared her rule of thumb recently, and I've been repeating it ever since.

Plan on spending 20% of revenue or more on advertising when you start to scale.

You'll read articles that say brands spend 4 to 8% of revenue on marketing.

That's what established, billion dollar brands spend. Brands everyone already knows. Brands with decades of awareness behind them.

As of my colleagues recently put it, "Emerging brands that grow rapidly are often spending 50%+."

If you're building a brand, you're not in the reminding business.

You're in the introduction business.

Why This Matters Even More When Nobody Knows Your Name

Here's what I'd add to her advice.

The less people know you, the more this matters.

When a big brand runs an ad, it's a reminder.

When you run an ad, it's an introduction.

Reminders are cheap. Introductions take more.

If people haven't heard of you, there's very little demand out there waiting to be captured. You have to create it first.

The Two Buckets Every Advertising Budget Needs

Once you know how much to spend, the next question is where it goes.

The easiest way to think about it is two buckets.

Bucket one introduces you.

This money reaches people who have never heard of your brand. It builds awareness, familiarity and trust, so that when they're ready to buy, you're already on their list.

This bucket usually includes:

• Online video and YouTube

• Streaming TV

• Billboards and out of home

• Creators and influencers

• PR

• Podcasts

• Sponsorships and events

Bucket two closes the sale.

This money reaches people who are already shopping. They're searching, comparing, or they've visited your site before.

This bucket usually includes:

• Search ads

• Retargeting

• Ads on retailer websites

• Meta and TikTok ads set up to drive purchases

One important note.

The channel doesn't decide the bucket. The setup does.

Meta can introduce you to new people, or it can focus on people who are already close to buying. It depends on how the campaign is built and what it's told to optimize for. Most brands set it up to close.

Why Most Founders Overfill the Closing Bucket

Almost every founder I talk to puts most of their money into bucket two.

I understand why.

It's easy to see what it earned. You spend a dollar, and the dashboard shows you a sale.

Bucket one is harder to track. It works over weeks and months, not hours.

But here's the catch.

The closing bucket can only sell to people who already know you.

When that group is small, you run through it fast. Your costs creep up. Your return drops. And it starts to feel like your ads stopped working.

Often they didn't.

You ran out of people who know your name.

What the Research Says: The 60/40 Rule

Les Binet and Peter Field have spent years studying advertising effectiveness for the UK's Institute of Practitioners in Advertising, the trade body for British ad agencies. Their 2013 report, The Long and the Short of It

, looked at nearly 1,000 advertising case studies. What they found became known as the 60/40 rule.

The campaigns that performed best over time put roughly 60% of the budget into building the brand and 40% into driving the sale.

They revisited the research in 2017 for the digital era. The balance held.

In 2018, they showed how the right mix shifts by category and situation. But even in the categories where selling is easiest, the recommended share for the closing bucket never went much past half.

The marketing measurement firm Analytic Partners reached a similar conclusion in its own analysis: put at least half of your budget into brand.

60/40 is a guide, not a law.

But if your split looks more like 10/90, it's worth a hard look.

"Shouldn't I Prove My Product First?"

You'll hear the other side of this, too.

Some people say a young brand should lean on the closing bucket until it proves people will buy.

There's something to that. You want to know that when people find you, they buy and they come back.

But that phase shouldn't last forever.

If nobody knows you, the closing bucket doesn't have much to close.

The brands that grow are the ones that start introducing themselves to people who aren't looking for them yet.

How to Tell If the Introducing Bucket Is Working

This is where founders get nervous.

If it doesn't show up in ROAS, how do you know it's working?

Look at the signals around it:

• Are more people searching for your brand by name?

• Are more new visitors coming to your website?

• Are total sales growing everywhere you sell, not just on the platform running the ad?

• Is your closing bucket getting more efficient?

That last one matters most.

When the introducing bucket is working, the closing bucket usually gets easier.

AI Is Paying Attention Too

There's one more reason the introducing bucket matters right now.

NIQ reported in August 2026 that nearly three quarters of shoppers now use AI for product discovery.

When someone asks an AI assistant what to buy, it draws on what's out there about brands: press, creators, reviews and retailers.

The introducing bucket is how you give it something to say.

Think Like an Investor

In my last post, I compared a media buyer to a financial advisor for your advertising budget.

This is the same idea.

A good financial advisor wouldn't put every dollar into short term trades. They'd balance them with long term growth.

Your advertising budget deserves the same thinking.