How Much Should You Spend on Marketing?

If you're about to take the plunge and invest in digital marketing, you probably want to know how much you should be spending. Read our blog post for marketing budget benchmarks to help you get started.


You already know that you need a digital marketing strategy to keep up with the competition and the behavior of consumers in 2019.

But, how much should you be spending on digital marketing?

While the exact amount can vary by location, industry, competition, etc., we’ll provide some benchmarks to get you started.

How Much to Spend on Marketing Based on Expert Suggestions

Marketing experts and agencies often recommend that small businesses spend anywhere from 7-8 percent of their gross revenue on marketing. And, according to a study, small businesses tend to follow this rule, spending around 3-5 percent.

But, how do you know if that amount is right for you?

Well, let’s start with why marketing is so important for local businesses.

Why Is Marketing Important?

When an agency calls or emails you, trying to sell you their services, it probably seems like they’re just trying to push another unnecessary cost on you.

But, the truth is that marketing works, and if you’re not doing any form of digital marketing, you’re going to end up falling behind the competition.

We like to think of marketing as similar to paying a utility bill. Your business wouldn’t be able to remain open if you refused to pay your electric bill, right? Well, the same goes for digital marketing.

Let’s face it. Our phones are just extensions of our arms at this point. We spend, on average, four hours a day on our phones. And, according to one study, 63 percent of searchers are looking for local products and information.

So, to get in front of consumers, you need a strategy that puts you in their phones. How can you do that?

You need to show up in mobile, local searches, and you need a mobile-friendly website that gives the consumer all the info they need.

Your Minimum Marketing Budget

Okay, so how much is all this going to cost you?

Let’s talk about minimums. What’s the least amount your business should spend on marketing?

We wouldn’t recommend spending less than $500 a month on a digital marketing plan. That’s doable, right? 

If you're spending $500 each month, that should go toward building an online presence or improving your local search ranking.

That budget will pay for things like directory clean up and presence management as well as review marketing and reputation management.

You could spend less than $500, even on some of our plans, but those plans would only get you the basics. To survive in today's digital world, you're going to need a little more than that.

And, while $500 spent toward digital marketing will get you a solid local search marketing foundation and help you show up in searches, it may not be enough.

We know that consumers want to interact with businesses through an integrated marketing approach, and $500 a month really isn't enough to build an integrated marketing strategy for your local business.

Imagine what you could be doing by investing a further $500 in online ads.

Local search marketing will help you build a better online presence and reach local customers, but if you want to reach new markets, you need an online advertising strategy. 

What Should an Integrated Marketing Plan Include?

So, if you’re spending money on digital marketing, you probably want to know where you should spend it. While this will depend on your goals, here are the places you should be spending your marketing budget, according to how consumers are looking for businesses.

Local Search Marketing

Local search is the best way to build an online foundation for your business. You’ll need to engage in some directory clean up and citation building. You’ll also need to claim, verify and optimize listings on Google, Bing, Yahoo! and Yelp.

Review Marketing

Review marketing is all about managing your online reputation. You can think of the reviews that customers leave you as the new word of mouth — on steroids.

Think of it this way. If a customer tells a friend about your business and that friend tells one of their friends, you’ll slowly get a good reputation in the physical world.

But, if a customer leaves a Google review, that review will reach far more people online than you could’ve hoped to reach in real life.

As Jeff Bezos said, “If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the Internet, they can each tell 6,000.”

Paid Advertising

Paid advertising is a great way to reach consumers who wouldn’t have heard of your business. Your ads can show up in search results on Google or Bing, in local consumers’ Facebook feeds and across the internet on other websites.

And, online ads are a great way to put your business in front of more consumers while you’re trying to build your online presence or improve your local search ranking.

Social Media

Consumers find new businesses on social media, and even if they don't find you through Facebook, they will look for your Facebook page when they research your business.

You need to be active on social so that when a customer is researching your business, you show up and they know they can trust you.

Final Thoughts

We wouldn't recommend spending any less than $500 a month on marketing. You could, but then you wouldn't get the full benefits of an integrated marketing strategy that puts you in front of more consumers, wherever they're searching.

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