How Much Should a Luxury Brand Actually Spend on Marketing?

Q: Should an established luxury brand cut marketing spend?

Not cut, but shift. Spend usually falls to 10 to 15 percent of revenue at $5M and above, but the bigger move is away from measurable performance marketing and toward editorial, experiential, and cultural presence. Brands that over-index on performance at this stage often post strong quarterly numbers while eroding brand equity underneath them.

Valeria Koroleva
Aug 8
14 min read

A framework by stage and category

By Valeria Koroleva

Every month, a founder calls me with the same question. They've spent two or three years building something. A fragrance, a jewelry line, a small fashion boutique and now, a few months from launch, they want one number: what percentage of revenue should go to marketing? Someone has usually handed them a figure already, somewhere between seven and fifteen percent, and they want me to confirm it.

I never can. Not because the number is too high or too low, but because it answers a question luxury brands shouldn't be asking in the first place.

So let me tell you what I tell them, because if you're building in this world, you've almost certainly been handed that same figure. Here's what surprises people: done well, a luxury brand might pour close to half of its first-year revenue into marketing, then settle to a tenth of revenue once it's established. Why such a wild swing? Because the percentage was never the real variable. What matters is which stage your brand is in, and what that money is actually being asked to do. Get that wrong and no number will save you; get it right and the percentage more or less takes care of itself.

The reason almost everyone gets this wrong is that the advice you're inheriting came from somewhere else entirely. Software, subscriptions, the direct-to-consumer boom of the 2010s. Businesses whose economics look nothing like yours. It isn't bad-faith advice. It's simply borrowed from a different economy and repeated so many times that no one stops to ask whether it even fits.

Well, it doesn't. I've spent years on the other end of that phone call: jewelry brands past seven figures in their first year, hospitality clients who doubled their monthly revenue, beauty lines going up against houses many times their size and underneath all of them runs the same pattern. It's a framework, and this is how it works.

Why the DTC playbook breaks in luxury

So where did seven-to-fifteen come from? It isn't invented. Cross-industry surveys put the average marketing budget near eight percent of revenue, and consumer-product brands closer to twelve or fifteen. Real numbers, but look hard at the businesses behind them. The same instincts travel with that figure: performance marketing first, optimize to conversion, scale fast on whatever proves out in week one.

That approach worked beautifully for $95 sneakers, $200 mattresses shipped in a box, and eyeglasses sold by mail. Put it to work on fine jewelry, a niche fragrance, or a couture line and it doesn't just underperform. It actively corrodes the thing you're building. Why? Because your customer isn't doing what theirs was doing. Three differences matter most.

Your customer isn't researching a purchase. They're building an identity. Picture two shoppers. One is choosing a $60 sweater, asking which of these is best. The other is spending $6,000 on a bracelet, asking something simpler - which of these is me? If that's the real question, what does your marketing actually have to do? Well, join them. So when you retarget someone across the internet with the bracelet they glanced at yesterday, you aren't nudging them toward checkout. Like this, you're teaching them the brand is a little desperate. And desperate is the opposite of what they came for. They're looking for proof that their taste was right, and a brand that chases them is proof that it wasn't.

The math on a single customer is different. When a customer spends $50, the cost of acquiring them matters enormously; get it wrong and the whole model breaks. But when they spend $5,000, then come back within a year or two for something just as significant, cost-per-click stops being the number that matters. The real figure is the relationship. What they're worth over years, not in a single checkout. This is exactly where borrowed frameworks starve a luxury brand. Built to optimize the first transaction, they can't see the second, the third, the tenth, so they tell you to spend less precisely where you should be spending more.

Your brand is an asset, not an expense. When a luxury house is sold, the price is tied to brand equity in a way it simply isn't in most industries. So the money you put into photography, editorial, your own presence as a founder, the atmosphere around the whole thing. That isn't overhead to trim against this quarter. It's capital and it builds something that will still sit on the balance sheet years from now. Judge it by this month's return and you'll dismantle the most valuable thing you own, one efficient decision at a time.

There's a figure in Bain & Company's latest luxury study. The one they publish every year with Altagamma, now in its 24th edition. Around 90 percent of luxury consumers say the experience feels interchangeable from one brand to the next. Ninety percent. In the single industry whose whole promise is that it is not interchangeable. The same research follows customers through long, winding journeys that get harder to read every year, not easier, as AI reshapes how they find and choose what they want. The old playbook was never built for any of this and generic advice fails for one plain reason: it can't see the things that actually decide a luxury sale.

The framework, by stage

So how much should you spend? Here, finally, is the answer but as a range that moves with you, not a number pinned to the wall. Marketing spend in luxury should follow the work your brand needs to do right now, at this exact point in its life. There are four stages, and each one spends for a completely different reason.

Stage 1 — The Asset Phase

PRE-REVENUE TO ROUGHLY $250K PROJECTED FIRST-YEAR REVENUE

At this stage, marketing doesn't buy you customers. It builds the asset every future dollar will lean on.

Think about what a customer meets before you've sold a single piece. They can't hold your product yet. All they have is the photography, the website, the way you talk about what you've made, the feeling the whole thing gives off in the three seconds before they decide whether you're serious. At launch, that impression is the product. And almost all of the work behind it is one-time: brand identity, photography that can carry you for two years, your own public story, a website that behaves like a storefront rather than a brochure, the first wave of PR, the content that tells people what you are and what you're not.

Plan to spend 30 to 50 percent of your projected first-year revenue on it. I know how that sounds. But the alternative is worse, and I've watched it play out too many times: most luxury brands don't die because they run out of money. They die because the founder was too cheap to look expensive. Launch without the asset base and the customer reads you, instantly, as not-quite-luxury — and they never come back to find out they were wrong. No amount of spending later buys back a first impression.

Photography is where founders fight me hardest, and honestly, they're half right. The technical floor has fallen through. Hand a founder with a real eye an iPhone, a window, and a paper backdrop and they can make something lovely. I've seen it done. But the money was never about the camera. It's about direction, taste, and the stamina to hold both: someone to design the visual world your brand will live inside for two years, the hours to shoot it properly on every piece and every season, the editing discipline that keeps it from drifting into something cheaper. Skip that and you aren't saving on equipment. You're handing the most important creative decisions of your brand to luck.

I've watched it go both ways in the same year. One jewelry brand spent with discipline before launch-real editorial photography, a site built properly rather than cheaply, founder-led press and crossed seven figures in its first year, with an early feature in a major fashion title that gave it instant credibility. Another founder, just as talented, decided photography and PR could wait "until there's revenue to justify it." There was never enough revenue. They didn't reach year two. Same product quality. Different first impression.

The mistake, almost always, is waiting. You tell yourself you'll invest in the brand once the money is coming in. But by then you've already trained your first customers to see you as cheaper than you are, and undoing that costs far more than doing it right would have.

Stage 2 — The Listening Phase

ROUGHLY $250K TO $1M REVENUE

Now the brand exists and the foundation is built. So what is the money for at this stage? Not growth. Listening.

This is the moment for small, disciplined experiments. A little paid social, some search, influencer seeding, a bit of earned media. Each one built to answer a real question. Is this channel bringing you luxury customers, or just customers? What does the path from first glance to first purchase actually look like? Which audiences buy, and which quietly disappear? Budget for 20 to 30 percent of revenue here, almost all of it aimed at learning rather than scaling.

The temptation is to find the one channel that flickers to life and pour everything into it. Don't. A founder who drops $50,000 a month into paid social before they understand why people are converting will buy the wrong customers at the wrong price, and the dashboard will cheerfully tell them to keep going.

I worked with a small artisan brand at exactly this point that was bleeding budget on paid social at CPCs that made no sense. We didn't scale a thing. We tested audiences and creative. The cost per click fell 65 percent while traffic tripled, at the lowest spend the brand had ever run. That is the whole job of this stage. You're not building the engine yet. You're finding out which parts are worth building.

And underneath all of it, start laying pipe: email, SMS, a CRM that remembers everyone who ever raised a hand. None of it pays off today. It's the plumbing for the stage where the real compounding begins. Which brings us to the next one.

Stage 3 — The Compounding Phase

ROUGHLY $1M TO $5M REVENUE

The numbers start to hold still. The channels that earned their place get scaled, carefully; the ones that didn't get retired, or sent back to the testing bench. Spend usually settles into 15 to 20 percent of revenue, but the real change isn't the percentage, it's what the money is finally for. Acquisition still matters. More and more, though, your budget should move toward keeping the customers you already won, and turning a single beautiful purchase into a relationship.

This is where all that pipe you laid in Stage 2 begins to pay. However, read the benchmark carefully, because this is exactly the kind of number people import into luxury without thinking. In Klaviyo's 2026 data, drawn from more than 183,000 brands, email and SMS bring in 30 to 40 percent of total revenue for the brands that treat them as a retention system rather than a megaphone. Your luxury brand will probably land under that, and that is not a failure. Your customer buys rarely, and often in a room rather than a checkout, so email's job here was never to be the register. It's to hold the relationship through the eighteen quiet months between one significant purchase and the next.

What does transfer, cleanly, is the shape of the thing. Across all those brands, a handful of automated flows : the welcome sequence, the browse-abandonment note, the message after a purchase. Make up barely 5 percent of what you send, yet they produce close to 41 percent of email revenue, earning something like eighteen times more per recipient than a one-off campaign. That ratio doesn't care about your price point. Build those flows with real segmentation and you own the highest-return line in the whole budget, whether it drives forty percent of your revenue or twelve.

I had a beauty client and we rebuild their email program right at this stage. Proper segmentation, every message organized around where the customer actually was in their journey instead of the same blast to everyone, and within a quarter their open rates climbed 25 percent and their click-throughs 15. That kind of gain never shows up on an acquisition dashboard, but in something better-in margin.

The danger here is subtler than in the earlier stages, and it catches good founders. Once the channels are humming, you start treating the brand as solved, a machine to operate rather than a thing to keep shaping. That is when the drift begins, when the pressure to scale starts sanding down the very positioning that made the brand worth buying. Discipline matters more now than it did when you had nothing to lose.

Stage 4 — The Heritage Phase

$5M+ REVENUE

By now the brand has earned its place, and the question changes shape entirely. It is no longer how do I grow this — it's how do I make it last?

Spending eases to 10 to 15 percent of revenue, and the center of gravity moves: away from acquisition, toward presence. Editorial. The environments the brand lives in. Experiences a customer can walk into. The slow, patient work of becoming a name people hand down rather than discover. You still acquire, of course, but more and more of it arrives on its own, earned and referred and inherited.

One caution on that range: it fits a tight product line better than a broad one. A single-note fragrance house or a focused jewelry line can live comfortably at ten percent. A fashion brand shipping seasonal collections cannot - each season needs its own campaign, its own imagery, its own press moment, and that cadence alone can push you to twenty percent or beyond. Read the range against how often your brand has to reintroduce itself. The more seasons you carry, the higher in the band you belong.

There is a mistake waiting here, and it's the most common one in modern luxury: the pull toward performance marketing. At this size you have a finance team that can prove a clean, positive return on aggressive paid spend, and that proof is seductive. So, resist it. Performance marketing makes a luxury brand worse even when the numbers look good, because every retargeted ad and conversion-optimized banner teaches your customer to see the brand as something they have to be talked into. And a brand you have to be talked into is not a brand anyone inherits.

A second shift arrives at this stage, quieter than the first, and it will feel personal. In Stage 1 I told you to spend on your own story - your face, your voice, the reason you started. That was right then. It stops being right here. A brand people inherit has to be larger than the person who built it, because no one inherits a founder. So the work now is to move what only you carried into the house itself: the point of view into the brand's point of view, your taste into a visual system anyone on your team can execute, your voice into a way the brand speaks whether you're in the room or not. Founders resist this, and I understand why. It can feel like being edited out of your own creation. It isn't. It's the difference between a business that depends on you and one that could one day be sold, or handed down, or simply outlive your interest in running it.

Bain and Altagamma named this shift outright in their latest study, Finding a New Longevity for Luxury: a tectonic move from possessions toward experiences, from mechanics toward meaning, now that the era of easy shopping sprees is over. The houses positioned to win the coming decade are the ones investing in exactly that kind of presence: immersive, personal, culturally fluent. The founders who understand it are building heritage. The ones who don't will keep posting healthy quarters while, year by year, the brand slips out from under them.

How category modulates the framework

The stages give you the skeleton. Category is what puts flesh on it — and every one of the four I work in has a single truth that most brands inside it keep getting wrong.

Fine jewelry. This is the one category where the customer will come back on their own, if you don't break the relationship first. Which is why so many jewelry budgets point the wrong way: too much poured into Meta to win them the first time, too little into the well-timed email that arrives eight months after the engagement ring, when they're ready for the next thing. Underfund that and you end up paying to acquire the same person twice. Once for the sale you got, and again for the one that should have simply arrived.

Fashion houses. Lean hard on performance marketing and you don't just waste money. You teach your customer to wait for the next markdown, and you erode your margin for good. Fashion loyalty runs on emotion, not habit. Editorial, strong content, a visible founder: these pay back more reliably than any discount ever will. One fashion client of mine landed a major national feature and a television segment in the same season, and that earned coverage pulled in 40 percent more qualified leads than every paid campaign running beside it, combined. Editorial compounds. Performance ads don't.

Fragrance and beauty. The most underfunded line in this whole category is also the humblest: sampling. Physical samples. Through partnerships, gift-with-purchase, a box sent to your best customers. It rarely even gets counted as marketing, and yet nothing else acquires a fragrance customer so efficiently. Nobody buys a scent they've never smelled. Beauty and fragrance also burn through content faster than any other corner of luxury, so budget for that pace or watch quicker brands lap you.

Boutique hospitality and experiential luxury. This one isn't e-commerce, and the brands that run it like e-commerce lose. The journey is physical, relational, rooted in a place and increasingly it happens offline. I've seen a property in this category double its monthly sales year over year and lift Instagram engagement 85 percent almost entirely through local activations and partnerships with real neighborhood pull, not broad paid spend. Here, digital should be a smaller slice of the budget, but it should convert far harder, because the audience arriving through it is already more qualified than in any other corner of luxury.

The framework still holds. The percentages still hold. What shifts, category to category, is where inside each stage the money should go.

How to know you're using this framework wrong

A framework is a way to think, not a substitute for thinking. And one aimed at the wrong stage is worse than none at all. So here are four quick ways to catch yourself using this one wrong.

You're at Stage 1 and photography is the smallest line in your budget. You've inverted your priorities. The asset base is the work at this stage. If photography is being cut to fund anything else, the budget is wrong.

You're at Stage 2 and you've already picked a "main channel." You haven't proven anything yet. The job right now is to test, to learn, and to refuse to commit until the data is real. Brands that crown a main channel this early have almost always crowned the wrong one.

You're at Stage 3 and retention is under 20 percent of your marketing budget. You're paying to acquire the same customers twice. The compounding only works if you actually fund it.

You're at Stage 4 and your performance spend is climbing year over year. Your finance team is winning an argument it shouldn't be having. At this scale the marginal dollar belongs to brand and culture, not to ROAS.

If any of these is you, the percentage was never the problem. The composition is.

What this means for you

If you've read this far, you're probably a founder who already suspected the answer you were being handed was wrong. You were right.

What the answer actually is for your brand depends on things no article can see from here: the audience you've already gathered, your own story, the real economics of your product, the press window open to you this month, what you and your team can genuinely execute. That's where general guidance runs out and real strategy starts.

If you want to work through your own number with someone who does this only in luxury, let's talk. Bring your numbers. I'll tell you the truth.

Frequently asked questions

How much should a pre-launch luxury brand spend on marketing?

Roughly 30 to 50 percent of projected first-year revenue, weighted almost entirely toward foundational, one-time work: brand identity, photography, the founder's public story, the website, and initial PR. The instinct to wait until there's revenue to justify the spend is the most common, and most expensive - mistake at this stage.

What's the right marketing budget for a luxury brand at $1M to $5M in revenue?

Typically 15 to 20 percent of revenue. The critical shift isn't the percentage but the composition: more of the spend should move from acquisition to retention, owned channels, and lifetime-value infrastructure. Email and SMS, built as a retention system, drive 30 to 40 percent of revenue in the best-run programs at this scale.

Should an established luxury brand cut marketing spend?

Spend usually falls to 10 to 15 percent of revenue at $5M+, but the bigger move is away from measurable performance marketing and toward editorial, experiential, and cultural presence. Brands that over-index on performance at this stage often post strong quarterly numbers while eroding brand equity underneath them.

Why doesn't the standard 7-to-15 percent rule apply to luxury?

That rule comes from categories with short purchase cycles, low order values, and weak brand equity. Luxury runs on the opposite economics: long consideration windows, high order values, strong repeat behavior, and brand equity that sits on the balance sheet. Applying SaaS or DTC frameworks to luxury systematically underinvests in the work that drives long-term value.

How does category change the spend mix?

Fine jewelry weights toward retention and CRM. Fashion weights toward editorial and content velocity. Beauty and fragrance need sampling and constant product storytelling. Boutique hospitality runs heavily offline through events, PR, and local partnerships. The stage-based percentages still apply; the composition within each stage shifts.

— V.