Stop Calling Marketing CapEx: Budget Better in the UK

Most small businesses don’t lose marketing budget because their marketing is “bad”. They lose it because they describe it in a way that makes finance people stop listening.

One phrase is doing a surprising amount of damage: “Marketing is like CapEx.” If you’ve said it (or heard an agency say it), you’re not alone. The intention is usually good — protect long-term marketing from short-term cuts. The problem is that CapEx is a real accounting category with rules, tests, and consequences. Use it loosely and you’ll sound like you’re trying to dodge scrutiny.

This post is part of our British Small Business Digital Marketing series, and it’s written for UK owners and marketers who need to get SEO, paid social, content, and email budgets approved on limited cash. The stance here is simple: treat digital marketing as OpEx, justify it like a pro, and you’ll earn more trust (and more budget) than any clever relabelling ever will.

Marketing isn’t CapEx — and finance will clock it fast

Answer first: Marketing spend is usually operating expenditure (OpEx), not capital expenditure (CapEx), because the “asset” it creates can’t be reliably valued, separated, or guaranteed the way a factory or software system can.

CapEx is for acquiring or upgrading assets that sit on the balance sheet and are paid back over time (think equipment, buildings, major IT). Marketing is different: it’s a mix of activity that creates demand now, maintains awareness, improves conversion rates, and sometimes builds longer-term brand preference.

A lot of this confusion has been amplified by the wider accounting conversation about intangible assets. In the modern economy, value increasingly comes from things you can’t touch — software, data, reputation, customer relationships. That debate is real (and it’s timely in 2026), but it doesn’t mean you can start calling ad spend “CapEx” and expect finance to nod along.

Here’s the risk for small businesses: if you use technical finance terms incorrectly, you lose credibility at the exact moment you’re asking for investment.

A practical rule: if you want finance to treat marketing seriously, you need to treat finance terms seriously.

Why “marketing is like CapEx” breaks down (in plain English)

Answer first: The CapEx analogy fails because marketing outcomes are uncertain, hard to value consistently, and tightly mixed between short-term sales and long-term effects.

The original article lays out several reasons. For UK small businesses, these are the ones that actually bite in budget conversations.

1) You can’t cleanly split “this pound was long-term” vs “this pound was short-term”

Digital marketing is messy (in a good way). A single campaign might:

• generate leads this week,
• improve branded search next month,
• lift conversion rate because people recognise you,
• reduce cost-per-click later because your Quality Score improves.

That’s not a neat “asset creation” line item. Trying to allocate part of a Meta Ads invoice to the balance sheet and part to the P&L is the kind of thing that creates arguments and delays — and small businesses don’t have time for that.

2) If marketing becomes CapEx, you’d have to treat loads of other stuff the same way

This is where the analogy collapses. If you capitalise marketing because it “builds future value”, then logically you should capitalise:

• staff training,
• product development,
• customer success programmes,
• recruitment and onboarding.

That’s not a minor tweak. It changes how the whole business reports performance.

3) There’s no standard, affordable valuation method for the “asset”

Big corporates can pay for brand valuations. Most UK SMEs can’t — and even when they can, methodologies vary wildly.

Finance teams care about comparability and consistency. If two valuation models give you £200k and £2m for the same brand, you don’t have a reliable accounting asset. You have a debate.

4) Marketing outcomes aren’t guaranteed

If you buy a van, you own a van.

If you run a campaign, you might create lasting demand — or you might discover your offer needs work, your audience is saturated, or your tracking was wrong. That uncertainty is normal in marketing, but it’s exactly why treating it like CapEx doesn’t hold.

5) Marketing is ongoing maintenance as much as it is “building”

Brand memory fades. Audiences churn. Competitors copy. Platforms change.

A lot of small business marketing is less like “building a property” and more like servicing an engine. You don’t capitalise maintenance. You budget for it.

The better approach: frame digital marketing as OpEx with investment discipline

Answer first: You’ll get further by positioning marketing as controlled OpEx tied to measurable commercial outcomes (pipeline, revenue, retention), not by trying to rename it.

Small business finance isn’t allergic to marketing. It’s allergic to:

• vague goals (“brand awareness”),
• untracked spend,
• inconsistent reporting,
• and forecasts that move every month without explanation.

The fix is not jargon. The fix is management discipline.

Use a simple three-bucket budget model (works for most SMEs)

I’ve found this split prevents the classic “either brand or performance” argument and makes budget conversations easier.

1. Always-on demand capture (30–50%)

   • SEO basics (technical fixes, core landing pages)
   • Google Search Ads on high-intent terms
   • Remarketing

2. Demand creation (20–40%)

   • Content marketing that targets buyer questions
   • Paid social to cold audiences with a clear offer
   • PR and partnerships

3. Conversion and retention (20–30%)

   • CRO (landing page testing)
   • email marketing automations
   • review generation and referral mechanics

This helps finance understand you’re not “spending on vibes”. You’re funding a system.

Speak finance without pretending to be an accountant

You don’t need to quote accounting standards. You do need to show you understand the commercial picture.

Instead of: “We need £3,000 for SEO because it’s a long-term asset.”

Say: “We’re proposing £3,000/month OpEx for SEO over 6 months, with two measurable outcomes: (1) increase qualified organic enquiries from 25 to 40/month, and (2) reduce reliance on paid search by shifting 15% of leads into organic by month six.”

Same spend. Completely different level of credibility.

What to put in your marketing budget request (so it gets approved)

Answer first: A finance-friendly marketing proposal includes a timeframe, unit economics, leading indicators, and a clear stop/scale decision.

Use this structure for SEO, PPC, paid social, or content marketing. It works whether you’re pitching to a finance manager, a co-founder, or your future self.

1) Start with the business constraint, not the channel

Examples:

• “We need 20 more qualified leads per month to hit Q2 revenue targets.”
• “We can’t keep paying £85 per lead; margins won’t take it.”
• “We’re seasonal — we need pipeline built before March/April.”

2) Show the unit economics (even if they’re imperfect)

Finance will forgive uncertainty. They won’t forgive a total absence of maths.

Minimum viable numbers:

• average order value (or average contract value)
• gross margin
• lead-to-sale conversion rate
• acceptable cost per lead / acquisition

If you don’t know your conversion rate, say so — and make measurement part of the first month’s deliverables.

3) Define leading indicators for each channel

Digital marketing is full of lagging metrics (revenue comes later). Give finance early signals.

• SEO: ranking movement on priority terms, non-branded clicks, form fills from organic, assisted conversions
• Paid social: cost per landing page view, cost per lead, lead quality by segment
• Content marketing: newsletter signups, time on page, demo requests from content journeys
• Email marketing: list growth, open/click rates, revenue per send (or per subscriber)

4) Include a “stop or scale” rule

This is the fastest way to build trust.

Example:

• “If cost per qualified lead stays above £120 after 6 weeks and two creative iterations, we pause and redeploy budget.”
• “If SEO leads hit 35/month by month four, we add one content day per week and expand into two service pages.”

Finance loves predictability. Give it to them.

When can anything in marketing be treated more like an ‘asset’?

Answer first: While most marketing is OpEx, some projects behave more like longer-term investments — but they’re still better managed as disciplined programmes rather than reclassified accounting entries.

For SMEs, the “asset-like” work usually looks like:

• A major website rebuild that improves conversion rate and reduces service time (because it fixes pricing clarity, FAQs, onboarding)
• Foundational SEO content that keeps generating leads for 12–24 months with light updates
• A rebrand that resolves confusion and improves close rates (common after mergers, pivots, or shifting upmarket)
• Multi-month sponsorships where the contractual commitment is clear and measurable

Even then, the practical move isn’t calling it CapEx in conversation. It’s to:

• ring-fence the budget,
• attach clear milestones,
• measure commercial impact (leads, conversion, retention),
• and report it consistently.

Make marketing harder to cut by making it easier to trust

Small businesses in the UK are still operating in a high-cost environment — energy, wages, and borrowing costs have all squeezed cashflow over the last couple of years. When belts tighten, marketing is often first on the chopping block because it’s seen as optional.

Your job isn’t to “protect marketing” with clever wording. Your job is to run marketing like a commercial system: planned OpEx with targets, measurement, and decision points. That’s how you earn the right to keep spending when others are panicking.

If you’re building your 2026 digital marketing plan right now, take a look at your last budget request. Did you accidentally pitch it like a balance-sheet asset, or like a managed operating cost tied to revenue?

What would change in your business if your marketing reporting was strong enough that finance asked you where you want to invest next?