Marketing Budget Allocation

What It Is

The decision of how to split marketing spend across channels and stages. Two inputs govern it: stage norms (where comparable companies spend at your growth stage) set the starting mix, and marginal causal return decides reallocation.

The Allocation Rule

Start from the stage-appropriate channel mix, then shift budget toward the channel with the highest marginal incremental-roas until marginal iROAS equalizes across channels (or hits your target ROAS floor).

This is marginal economics: optimize the next dollar, not the average dollar. A channel with high blended ROAS but low iROAS is over-funded and should be cut at the margin.

Stage Dependence

Allocation tracks growth stage and gtm-archetype: early-stage concentrates on a few founder/content/PLG channels (focus beats spread on thin budgets); growth-stage diversifies into paid + ABM + events; scale-stage runs the full mix with retention/NRR as the primary lens. The wrong-stage mix wastes budget regardless of execution quality.

How It Applies to Marketing Factory

Budget allocation is the factory's top-level spend decision, and it is where incremental-roas becomes actionable. The factory should hold the current mix, maintain per-channel iROAS estimates (with intervals) from incrementality tests, and reallocate when intervals separate — using marketing-benchmark-prior data to set the starting mix and channel-selection to map stage to channels. Setting the mix is agent-assisted; the reallocation decision stays human at the gate.

Referenced from: benchmarks-as-priors