Marketing budgets. Everyone’s favourite topic.
Get it wrong, and you’ll stifle your growth.
This pressure often leads to businesses focusing their budgets on what’s worked in past; taking the “safe” route.
This makes sense, right? If it’s worked before, surely it’ll work again… right?
The trouble is that channels don’t stay effective forever; audiences move, and your competitors improve their outputs. If you spend on the same tactics year in, year out, you’re already behind.
The 70/20/10 rule is a simple way to stop this from happening. It forces you to split your budget deliberately across what works now, what’s coming next, and what you’re still testing, so you’re protecting today’s revenue and building tomorrow’s at the same time. Here’s how it works, and how to apply it as an SME.
What is the 70/20/10 rule in marketing?
The 70/20/10 rule is a framework for splitting your marketing budget across three categories of activity:
- 70%: What you know works
- 20%: What looks promising
- 10%: What you are still figuring out
It was popularised by Eric Schmidt and Jonathan Rosenberg at Google, who described it in their book How Google Works as the model they used for resource allocation: 70% on core activity, 20% on emerging, 10% on new. Marketers adopted the same logic for budget planning, and it has held up as a useful structure ever since.
For most SMEs, the value is in the discipline of allocating deliberately across all three categories, rather than defaulting to habit or putting everything into the channels that felt safe last year.
What the split means in SME terms
70%: What you know works
This is the part of your budget that goes on proven activity. The channels and campaigns that consistently produce enquiries, pipeline or revenue, and where you have the data to demonstrate it.
For most B2B SMEs, this tends to include a combination of SEO-driven demand capture, paid search targeting buyers with clear intent, emails to existing contacts and warm prospects, and LinkedIn activity aimed at decision-makers in your target segments.
Run the 70% with discipline: clear KPIs, regular performance reviews, and an honest assessment of whether each channel is still worthwhile.
20%: What is showing promise
This is for channels and tactics that have shown early results but are not yet proven at scale. It might be a new content format that is generating more engagement than expected, a paid social campaign that is beginning to produce qualified leads, or a new audience segment that responded better than anticipated to a recent campaign.
You need to be selective with your 20% spending. Ask: “Do we have enough evidence to justify scaling this?”
Evidence is gathered in the 10%; you need to be confident in a tactic before investing more.
10%: What you are testing
This is your learning budget. New channels, untested formats, emerging platforms, different audience angles. The expectation is that some of it will not work, and that’s absolutely fine.
The 10% exists to give you a pipeline of future activity. Today’s experiment is tomorrow’s 20%.
For B2B SMEs in 2026, the 10% is often invested in GEO and AEO. AI-powered search is changing how buyers find suppliers, and the businesses building visibility in those environments now are likely to be ahead of the curve when it matters commercially.
Where most SME marketing budgets get the split wrong
The main issue we see is lopsided investment in the wrong channels. That’s:
- Too much of the 70% being spent on channels that stopped delivering results months ago
- The 20% is treated as a nice-to-have
- There’s no meaningful spend on the 10% (you’re not experimenting)
The result is a marketing mix that looks active, but isn’t really delivering anything meaningful.
If you’re not testing new things and experimenting with channels/tactics, you’ll always be marketing reactively, rather than proactively.
The bigger mistake, though, is what happens when money gets tight: the experimental budget is the first thing cut. It feels logical. Protect the spend that delivers, drop the spend that’s uncertain, but in practice, you’ve just removed the one mechanism that generates your next working channel, right when you’ll need it most.
There’s good evidence this is really, really important.
In their 2010 Harvard Business Review article Roaring Out of Recession, researchers analysed 4,700 companies across multiple recessions and found that only 9% came out in better shape than when they entered, and a defining characteristic of that group was that they maintained investment in marketing while competitors cut back.
The businesses that protect their testing budget through difficult periods are the ones that emerge with more functional options and better-allocated budgets.
How much should an SME be spending in total?
The split only works if the underlying number is big enough to produce a meaningful result. Get the total wrong, and the percentages won’t save you.
As a working range for a B2B SME that’s actively trying to grow, we recommend a spend of:
- Early stage, still building awareness: 10 to 15% of revenue
- Established, with some proven channels: 7 to 10% of revenue
- Scaling, with strong data on what works: 5 to 8% of revenue
Treat these as reference points, not rules. The most important thing is that you’re connecting with the leads you’re generating. If you’re generating a large quantity of rubbish leads, something’s not working.
Here’s how you can ensure you’re applying the rule correctly:
4 steps to applying the 70/20/10 rule properly
Audit your current performance
Before deciding where to put the 70%, establish which channels are delivering the results you need.
Look at cost per lead, conversion rate, and revenue contribution by channel.
Some activity that feels productive, regular social posting, for example, may be delivering very little commercial value. An audit tells you what belongs in the 70% and what needs to be cut.
Define the 70% based on evidence
A channel belongs in the 70% because it reliably produces results, not because it worked two years ago.
Paid search that consistently delivers qualified enquiries belongs here. A content programme with clear attribution to leads generated belongs here. Activity that you have always done but cannot connect to commercial outcomes does not.
Choose the 20% based on what is showing results
Look at:
- What experimental tactics produced an unexpected result in the past six months
- What a competitor appears to be gaining traction with
- Or what tactics in the 10% have shown enough promise to warrant more budget
The 20% should be reserved for promising tactics that are likely to deliver results but that you’re not ready to make part of your bread and butter yet.
Plan the 10% as a structured test
Set a clear objective for each experiment: what you are trying to learn, what success looks like, and how long you will give it before deciding whether to scale or cut.
An experiment without a defined endpoint tends to either run indefinitely or get cut at the first sign of difficulty before it has had enough time to show anything meaningful.
Your 10% allocation should be fluid. Successful tests graduate into the 20%, and strong performers in the 20% earn a place in the 70%.
Channels and tactics in the 70% that stop delivering should be cut back or moved out. An annual budget review is too infrequent if you operate in a fast-moving market.
Reviewing every quarter gives you enough data to make decisions without reacting to short-term noise.
Putting it into practice
The 70/20/10 rule works when it is connected to real data and reviewed consistently. We can help you put this into practice.
If you’re not yet tracking performance by channel, or your budget is still driven by habit rather than evidence, that’s the place to start, before you worry about the percentages at all.
If you’d like a hand working out where your budget should sit and which channels are worth investing in, get in touch. You can also read more about how we approach marketing strategy before you do.
