What should my marketing budget be?

Tips of the Trade,Your Questions Answered

May 15, 2024

This may be obvious to some, and a foreign language to others. We live in an ultra-competitive modern society, where hundreds of thousands of new brands are launching every year. So how are you supposed to keep up and not get left behind?

The days of waiting generations to grow the family business are in the past, we live in a fast-paced society where many consumers and business people alike want instant gratification. It’s the what have you done for me lately mentality and the I want it yesterday ideology.

So, the only real answer, given that you don’t have infinite time to meander into a successful business, is a properly executed marketing campaign.

“Well that’s great, but I’ve heard horror story after horror story of people spending $1,000’s or $10,000’s of dollars on paid media, social media marketing or search engine marketing and getting nothing in return.” That’s where a proficient marketing plan and digital marketing agency comes into play. Hopefully, one custom tailored for your unique industry, your budget and with your goals in mind. Why is this important? Because $1 is no longer $1. You can’t just plug a $1 into an ad spend campaign and expect to get a $5 or even a $1 return. The marketing landscape is sophisticated and has evolved rapidly. You need a trusted advisor to help you navigate the harrowing landscape.

So how much of a marketing budget should you have? Well it depends on a few things, but we will break down the three most realistic options below.

5% of Yearly Revenue

If you just want to maintain your market share. A good rule of thumb is to invest 5% of your yearly revenue in marketing. Now, marketing may encompass many things beyond just paid media spend, social media marketing and search engine marketing.

In fact, Digital Marketing can include things such as optimizing the speed of your website, creating content for you page, improving your search engine rank, engaging and growing your social media channels, creating compelling video content for YouTube/Shorts/Reels, shooting stunning photography/imagery for Pinterest/Instagram/Facebook, Engaging and working with Influencers in your Industry, Setting up an Affiliate or Referral Campaign, Running a Company Newsletter or SMS list, etc.

And just like a holistic approach to maintaining your health, these items that all fall under the digital marketing umbrella, are all positively correlated. You many have a solid grasp on paid media, but if you are sending them to a slow website with broken links, you aren’t going to see the conversions you’d like. Or on the other hand, you may have a fantastic and speedy website with a great offer, but if no one is seeing it because you aren’t ranking top 20 in google search results or spending anything on paid media, then you can’t expect your efforts to be rewarding.

So as you can see the 5% covers a world of things beyond just paid media spend or “advertising.” And often times the man hours involved in deploying successful marketing campaigns can reach into the hundreds or thousands of hours. So those in the know, know, those that don’t, may not have an appreciation of the skill and expertise necessary to execute successful digital marketing campaigns. This is truly a world where you absolutely MUST compare apples to apples. Never compare an apple to an orange because you will most often ALWAYS be left disappointed and wasting your time and valuable capital resources.

With that said, in today’s landscape with more brick and mortar and service based companies going digital more than ever before and all hungry for new sources of leads, we recommend investing at least 5% of your gross yearly revenue into your marketing initiatives. And not just spray and pray, but link up with a highly regarded and honest digital marketing agency and have a frank conversation with them to discuss your expectations and the reality that can be achieved.

But with a 5% budget, you should expect to maintain your current market share and revenues on a year over year (yoy) basis, since your competitors are more or less doing the same.

10% Of Yearly Revenue

You may think 10% is high, but you also may not consider that this could very well cover most of the operations of your business outside of servicing the clients and maintaining staff.

There are many modern tools that have launched to support robust company websites that make all of your business operations more efficient. They can help you with things from fulfillment, to contacting and replying to customers, to calculating shipping and commissions to payroll and expenses.

That’s a lot of time you can save yourself, since we aren’t in the era of human cloning yet. Think of what you can do with all that extra time back. You can get to scaling your business, by taking on larger competitors, outmaneuvering them and gaining market share as a result.

We like to call the mid-range, 10% marketing budget, the scaling level. This is where we see serious clients achieve sustainable and continued growth. We see these marketing engines continue to drive leads and growth for their companies for years to come. We see them gain market share against competition and we see them really start to pick up steam as far as their digital footprint as well as their industrial clout.

If you’re looking to become a household name in the world of business to consumer (b2c), you’ll want to delegate at least 10% for your total marketing budget.

15% of Yearly Revenue

This level is not for the faint of heart. This is reserved for those that are truly looking to take out competitors and rapidly grow their market share. We see companies that are properly executing marketing plans with a 15% budget, 10-50x yearly revenues. That is a massive return on investment (roi). In fact, if you had a publicly traded company growing at 10-50x yearly revenues, the multiples of sales/earnings they traded for would be astronomical (think bigger than NVidia.)

While 15% may sound like a lot, 15% of 100k in revenue yields 85k in net revenues. 15% of 100m in revenue yields 85m in net revenues. So we are talking economies of scale. If you are looking for a bigger pie, then the returns can pay off the investment 1,000 fold. And some of the biggest companies in the world ie. Proctor and Gamble spent approximately 8 Billion on Advertising alone in 2023 (Statista) 10% of their yearly Revenue of $80 Billion. And for the most part Proctor and Gamble is just maintaining market share in the B2C space for their products.


While the answer is not cut and dry, the answer depends on where your company is in it’s lifecycle and the lifestyle that you need to support for you, your family, your employees and stakeholders.

If you’re looking to maintain, 5% is a good ballpark all-in figure.

If you’re looking to grow, 10% is a good ballpark all-in figure.

If you’re looking to rocket, 15% is a good ballpark all-in figure.

Again your results will vary, by industry and through the effectiveness of your marketing campaign.

If you ever need someone to sit down with you and assess your current marketing strategy, we are only a click or call away. We would be happy to do so to make sure you are getting the most mileage out of your investment!

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