How Much Should I Actually Be Spending on My Marketing Budget for 2026?

This is the question that causes the most anxiety, and I get it. Marketing budgets feel like you're just throwing money into the void and hoping something sticks. Believe it or not, there is some science behind marketing budgets and here are my top tips for how to allocate yours for 2026:

The Real UK E-commerce Budget Benchmarks:

If you're in your first year, expect to spend 30-40% of your revenue on marketing. Yes, that's high, but you're building from scratch with zero brand awareness and no repeat customers yet.

Years 2-3, you're looking at 20-30% as you start benefiting from some organic traffic and repeat purchases.

Established businesses (3+ years) typically settle around 15-25%, though competitive categories might stay higher.

How to Split Your Budget:

New customer acquisition should get the bulk - around 60-70% of your marketing budget. This includes all your Google and Meta ads, any influencer partnerships, etc.

Retention (email marketing, loyalty programs, SMS) needs 15-25%. This seems low compared to acquisition, but email marketing is so cheap relative to its return that you don't need massive budgets here.

Brand building (content, PR, upper-funnel awareness) deserves 10-20%. This is the hardest to justify because you can't directly attribute sales, but it's what makes everything else work better over time.

What Good ROI Looks Like:

When looking at ad profitability, your blended Return on Ad Spend (ROAS) should be at least 2.5-3x for sustainability. That means for every £1 you spend on ads, you should generate £2.50-£3 in revenue minimum.

BUT - and this is crucial - cold acquisition campaigns might only deliver 2x ROAS, and that can still be profitable if those customers return. Don't judge every campaign by the same standard and thinking about the cost as acquiring a new customer into your brand's eco-system, not just the cost against that first purchase.

Email marketing should be delivering 15-25x ROI (yes, really). If it's not, something's wrong with your strategy. And if you haven't discovered the power of SMS to target existing customers, I would definitely be adding that into your mix for 2026, our clients saw an average of 32x ROI for their SMS campaigns last year.

When to Increase Your Budget:

Only scale spending when you've proven profitability at your current level. I see too many businesses thinking "if I just spend more on ads, I'll make more money!" while they're already losing money on each customer.

Get profitable at £1,000/month ad spend before you jump to £3,000/month. Master £3,000 before you hit £10,000. Growth is great, but profitable growth is better.

CASE STUDY: In the first seven months managing Google ads for a British womenswear brand, we achieved a 30% increase in ROAS (return on ad spend), with an average of 13.94x; generating £1.03m in direct revenue, and reducing CPA (cost per acquisition) by 31%.

If you're interested in discussing your Meta or Google ads, or overall marketing strategy for 2026 - get in touch.