Top-down, bottom-up or zero-based: which budgeting method to use for the 2027 marketing budget
Top-down budgeting sets the marketing budget from a company figure, such as last year plus a percentage or a share of revenue. Bottom-up builds it from the pipeline target: opportunities needed times cost per opportunity, plus people and platforms. Zero-based makes every line justify itself from nothing. For 2027, use all three: bottom-up to build the number, top-down to check it against what finance expects, and zero-based on the lines that did not prove themselves in 2026.
Key takeaways
What are top-down, bottom-up and zero-based budgeting?
Top-down budgeting starts from a company-level number: last year’s budget plus or minus a percentage, a share of revenue, or an envelope finance assigns. Bottom-up budgeting starts from the work: the pipeline target becomes qualified opportunities, opportunities times cost per opportunity becomes the program budget, and people and platforms are added for the capabilities the plan needs. Zero-based budgeting, as AccountingTools defines it, requires managers to justify budgeted expenditures rather than relying on prior-year spending.
How do the three methods compare?
| Top-down | Bottom-up | Zero-based | |
|---|---|---|---|
| Starting point | Last year, a share of revenue or a finance envelope | The revenue target and the opportunities it needs | Zero; each line is justified from scratch |
| Typical formula | 2026 budget times (1 plus growth), or revenue times a ratio | Opportunities times cost per opportunity, plus people and platforms | Each activity’s cost against its expected outcome |
| Time to build | Days | Two to four weeks with CRM data | Weeks to months; AccountingTools calls the effort its main drawback |
| Strength | Fast, easy to compare across years | Ties every dollar to pipeline; boards trust it | Removes legacy spend; forces choices |
| Weakness | Ignores the target; repeats last year’s mistakes | Only as good as the cost per opportunity behind it | Hard to justify long-term work such as brand and content; costly to repeat yearly |
| Board question it answers | Is spend growing slower than revenue? | How does this budget become the pipeline we need? | What did we stop, and why? |
| Best for 2027 | The check and the finance envelope | Building the number | Lines with weak 2026 evidence |
Kellogg’s board questions show why the method matters: where did the budget come from, was it trended off last year or built from a bottom-up model, and if it was trended, is total spend growing slower than revenue.
When is top-down the right method?
When finance sets an envelope before the plan exists, or when you need a sanity check. Share-of-revenue figures help here: Gartner’s 2026 CMO Spend Survey found marketing budgets at 7.8% of company revenue, and The CMO Survey found 9.0% among US companies. Neither is a target, but a bottom-up plan far outside those numbers needs an explanation. The marketing budget as a percentage of revenue article compares the two surveys.
Bring your 2027 target. In 30 minutes we map the pipeline gap, the first 90 days and what to fix before January.
When is bottom-up the right method?
Almost always, for the program budget. It is the method the pipeline coverage math article walks through: target divided by win rate, times marketing’s share, divided by deal size, times cost per qualified opportunity. It fails only when the costs per opportunity are guesses. If your CRM cannot give cost per qualified opportunity by channel for the last four quarters, fix that first, or label the inputs as assumptions and say so on the slide.
When is zero-based the right method?
When the old plan no longer fits, or for the part of the budget that cannot show what it produced. Forrester’s July 2026 guidance for B2B marketing leaders is to stop treating planning as an incremental exercise and to fund change rather than continuity. A full zero-based review of every line every year is costly, so apply it where the evidence is weakest. The zero-based marketing budget article gives the method.
For the lines to review first, what to stop funding in 2027 lists the usual candidates, with a test for each.
Worked example: reconciling the three for 2027
This is a worked example with stated assumptions, not a benchmark or a client result. The company has $150M revenue and an $8.0M marketing budget in 2026.
| Step | Method | Result |
|---|---|---|
| Finance envelope: 2026 budget plus 3% | Top-down | $8.24M |
| Opportunities for the target times cost per opportunity, plus people and platforms | Bottom-up | $8.7M |
| Gap to close | Difference | $0.46M |
| Lines with no traceable pipeline in 2026, reviewed from zero | Zero-based on $1.2M of lines | $0.5M released, $0.7M kept with new success measures |
| Final request | Bottom-up minus the zero-based release | $8.2M, inside the envelope |
| Check: share of revenue | Top-down check | 5.5%, below both 2026 survey figures; explain why the plan still covers the target |
The gap was closed by evidence, not by splitting the difference. The request now traces to opportunities, fits finance’s envelope, and comes with a stop list the board can see.
How do you choose for your team?
- If you have cost per qualified opportunity by channel from the CRM: build bottom-up, check top-down.
- If you do not: build bottom-up with labelled assumptions, and put fixing the measurement in the plan.
- If 2026 spend includes lines nobody can tie to pipeline: run zero-based on those lines only.
- If finance sets an envelope first: build bottom-up anyway, and show the gap with the pipeline it costs.
The 2027 B2B marketing planning hub lists the calculators for each step.
Frequently asked questions
What is the difference between top-down and bottom-up marketing budgeting?
Top-down sets the budget from a company figure, such as last year plus a percentage or a share of revenue. Bottom-up builds it from the pipeline target: the opportunities needed times what each costs, plus people and platforms. Top-down is faster; bottom-up is the one boards trust because every dollar traces to pipeline.
Is zero-based budgeting good for marketing?
For part of the budget. It removes legacy spend and forces choices, but AccountingTools notes the effort is its main drawback and that justifying areas without tangible short-term results, such as marketing, is hard. Use it on the lines with weak evidence, not on the whole budget every year.
Which budgeting method do CFOs prefer?
Most CFOs start top-down because it fits the company plan, then want a bottom-up build behind the marketing number. Kellogg’s board questions ask exactly that: was the budget trended off last year or built from a bottom-up model, and who built the model.
Can I combine the methods?
Yes, and for 2027 you should: bottom-up to build the number, top-down to check it against finance’s envelope and published ratios, and zero-based on the lines that did not prove themselves in 2026.
Sources
- Dave Kellogg, Kellblog: Board-Level Questions On The Marketing Budget (December 2, 2024)
- AccountingTools, Steven Bragg: Zero-base budgeting definition (September 22, 2026)
- Forrester: Budget Planning 2027, B2B Marketing Leaders Must Prioritize Focus For Resilience (July 9, 2026)
- Gartner: 2026 CMO Spend Survey press release (May 11, 2026)
- Duke Fuqua: CMOs Face Headwinds Even as Marketing Value and AI Impact Grow (The CMO Survey, March 31, 2026)
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