December hits and everyone starts copying last year's marketing budget, adding 10%, and calling it strategy. I've seen this movie before. It doesn't end well.

The 2025 Gartner CMO Spend Survey says 59% of marketing leaders don't have enough budget to do what they need to do. But other research shows SMEs waste up to 60% of what they spend because of bad targeting, no tracking, or plans that don't connect to anything.

So do you need more money or do you need to stop wasting what you've got? In my experience, it's usually both.

Pull up last year's budget. Add some percentage for inflation. Done, right?

The problem is that marketing shifts faster than annual planning cycles. Digital channels now eat up 61% of total marketing spend according to Gartner. Paid search just hit 13.9% of digital budgets. Digital display passed social ads for the #2 spot. Email is quietly coming back at 7.4%.

If your 2025 plan looks like your 2024 plan, you're funding tactics that may not match where your customers actually are anymore.

What to do instead: Start from scratch. Look at what actually produced results last year (not what you assumed would work) and build from there. Zero-based budgeting forces you to justify every line item instead of just rolling forward on autopilot.

When I ask business owners what their marketing produced last year, most of them can't tell me. They know they spent $50K. They think traffic went up. They have a feeling social media is "working." But ask for cost per lead, conversion rate, or customer acquisition cost and you get a blank stare.

This is more common than you'd think. Research shows 37% of marketing budgets get wasted when tracking and attribution aren't in place. A Marketing Week survey found two-thirds of SMEs have no marketing plan at all.

Without numbers, your budget is a guess. A bad one.

What to do instead: Before you spend another dollar, nail down three numbers: cost per lead, conversion rate, and customer lifetime value. If you don't have these, getting them is your first investment for 2025. Not more ads.

Budgets get tight. The instinct is to cut brand spend and dump everything into performance marketing because you can measure it.

I get it. Performance is trackable. Brand feels fuzzy. When someone asks for ROI, it's easier to point to a Google Ads dashboard than explain why you need billboards.

But the data tells a different story. More than half of marketing budgets now go to conversion-focused activities. Brand awareness is down to 29% of media spend. Fewer CMOs plan to invest in brand next year.

The damage from cutting brand doesn't show up right away. It shows up 12-18 months later when your pipeline dries up and you're fighting on price alone because nobody remembers what made you different.

What to do instead: Keep at least 25-30% of your budget for brand and top-of-funnel work. Your competitors are cutting theirs. That makes consistent brand investment a real advantage right now, not a luxury.

I talk to businesses all the time who put $500 a month into Google Ads, see nothing happen, and decide "digital doesn't work for us."

Digital works fine. But $500 a month doesn't get you through the learning phase, doesn't let you test variations, and doesn't compete in competitive auctions. You're basically paying for data you can't act on.

What to do instead: Use the budget planning tools in Google Ads and Meta before you set your numbers. Get realistic about what campaigns actually cost in your industry. And build in 10-15% extra for when something starts working and you want to push it harder.

AI adoption in marketing has doubled since 2022. Nearly half of CMOs say GenAI is saving them time. 40% say it's saving money. Only 1% say AI isn't a priority.

Short-form video keeps growing. Experiential marketing is expected to jump 6.7% in 2025. AI search tools like Perplexity and SearchGPT are changing how people find information.

If your budget is 100% "proven channels" with nothing set aside for testing, you're building next year's plan with last year's assumptions. Again.

What to do instead: The 70-20-10 model works here. Put 70% on channels that have proven ROI. Put 20% on emerging stuff that shows promise. Keep 10% for pure experiments. That experimental budget is where your 2026 growth comes from.

Everyone wants a number. Fine.

Average marketing budgets sit at 7.7% of company revenue, according to Gartner. But the range is huge. Half of CMOs report budgets at 6% or less. The big spenders are over 10.5%.

B2C service companies tend to spend more than product companies. Growth-stage companies should be at the higher end. Established businesses with strong referrals can get away with less.

But percentages aren't really the point. The real question is whether you can say "every dollar I spend on marketing produces $X in revenue" with a straight face. If you can't, your budget is wrong no matter what the number is.

Do you know your cost per lead from each channel? If not, fix that first.

Are you budgeting based on what worked or what you assumed would work? Big difference.

What's the split between brand and performance? If brand is under 25%, think again.

Do you have room to adjust mid-year? Set aside 10-15% for flexibility.

Is any of your budget going to test new approaches? If every dollar goes to the same channels as last year, you're already behind.

Your marketing budget shouldn't be a spreadsheet exercise you rush through in December. It's a strategic document that should reflect where your customers actually spend time, what's producing results, and where things are headed.

Most businesses mess this up because they budget in isolation. No real attribution data. No understanding of what competitors are doing. No outside perspective on where the gaps are.

That's the kind of strategic work a fractional CMO does. Not running campaigns, but making sure the money goes to the right places before you spend it.

If you're staring at next year's budget and something feels off, we should talk. Fresh eyes help, especially eyes that see marketing budgets across different industries every week. Sometimes the waste is obvious once someone points it out.