How Much Should You Really Spend on Marketing?
There is something I learnt early in my career that, from the number of times I have had this conversation now, I have realised is not common knowledge but most certainly should be. In the spirit of not gatekeeping the things big companies know, it is time we talked about it.
I grew up surrounded by small businesses. The mindset was always, “Can we save a bit here? Can we come in under budget?” I carried that thinking into the larger businesses I worked with early in my career. I still remember being told off for suggesting we try to save money on a campaign and come in under budget. At the time it felt strange. Now I understand why.
In those businesses, profit was already planned into the numbers. The marketing budget did not exist to be left over. It had one job. Bring in more revenue. So if we found places to save, the real question was not, “Can we bank this and spend less?” It was, “Is there a better place to reinvest this money so it can bring in more revenue?”
That was a big mindset shift for me, and it is one I now share with the smaller and growing businesses I work with. We are not here to throw money around like confetti, but we do need a marketing budget that is a percentage of revenue and we need it working hard to grow that revenue. If the business is growing and the marketing budget is not, that is usually a red flag.
The quiet habit behind big business growth
Many large and established companies allocate around seven to ten cents of every dollar they earn towards marketing. In seasons when they want to grow faster, that figure often increases.
They are not waiting to see what is left at the end of the year. They decide upfront that a portion of every dollar belongs to marketing, in the same way a portion belongs to wages, stock and tax.
Across industries, research with marketing leaders shows an average of around seven to ten percent of revenue going to marketing. Many advisers who work with growing brands talk about a broader band of five to twenty percent. The lower end is used to hold your position. The higher end is used for growth or new markets. For these businesses the question is not, “Can we afford to market?” The question is, “How do we use this budget in a way that brings more back in?”
As revenue grows, that percentage grows in real dollars too. More revenue allows a larger marketing budget. A larger marketing budget builds more visibility. More visibility leads to more enquiries, more bookings, more product sales and more repeat customers. From the outside it can look like momentum or luck. Underneath, it is a planned habit. It is also a habit you can choose.
Why marketing often feels out of reach
If marketing always feels expensive, it is usually a sign of structure, not failure. Many smaller businesses are running a different pattern. Marketing sits at the end of the list. A new website belongs in the “one day” category. Branding is “when we can justify it”. Ads are something to try “once we are earning more”.
Marketing is funded from whatever is left. Often there is nothing left. Every dollar that comes in already belongs to wages, stock or project costs, tax and a thin slice of profit. Nothing is set aside for visibility, so marketing always feels like it is taking away from something else. It is rarely because the business could never invest. It is because marketing was never built into the numbers.
The good news is that this is fixable. You can decide, from now, that a percentage of every dollar belongs to marketing and start folding that into your pricing and planning. Even if you begin at the lower end and build up, you are giving growth a fair chance.
What your marketing budget is actually for
Your marketing budget is not a mysterious pot. It is simply the money you set aside so people can find you, understand you, trust you and choose you. That applies whether you sell services, products or both. In most businesses, that money needs to cover three main areas.
1. Foundations
This is the work that makes you look and feel credible. It includes a visual identity that feels like your business rather than a default template, and branding that sits comfortably on your website, packaging, proposals, uniforms and store signage. It is photography and video that show the true standard of what you offer, whether that is a finished landscape, a haircut, a treatment room, a garment or a retail shelf.
It is also a website that does more than hold information. A good site quietly guides people from curiosity to a clear next step. That might be sending an enquiry, booking a consultation, placing an order online or visiting a stockist or store. When the foundations are weak or out of date, this is often the first place to invest.
2. Being found and being chosen
This is the work that keeps your business visible and makes it easier for people to say yes. It can include search marketing so you appear when someone looks for what you do or what you sell, social and digital campaigns that keep you in front of the right audience, and email marketing that keeps you in mind between visits or purchases. Articles, guides, resources and FAQs that answer the questions your ideal customers are already asking also sit here.
For a product based business that might look like sizing guides, care instructions, styling ideas or retailer campaigns. For a service based business it might be process explainers, price guides, case studies, testimonials and before and after galleries that help people picture themselves working with you. As the dollar amount of your budget grows, this same category can also include more traditional and large scale media such as outdoor placements and billboards, print advertising, radio and television, streaming platforms, podcasts, influencer activity and sponsorships. For a local service this might mean brand awareness across a region. For a product business it might mean national campaigns with key stockists.
Sitting behind all of this are the tools and data that keep things running. Your website hosting, email platform, e commerce or booking system, scheduling tools and analytics help you see what is working so each dollar can work harder over time. None of this is fluff. It is the practical cost of being visible and believable in a noisy world.
Choosing a number that fits your business
There is no single percentage that suits every business, but there is a clear frame. Across companies, an average of around seven to ten percent of revenue goes to marketing. A band of five to twenty percent is widely used as guidance. The lower end is better suited to maintaining your current position. The higher end is better suited to growth, new locations or new categories.
For most growing brands, “about ten cents in every dollar” is a realistic place to start. In a deliberate growth phase, you may choose to lift that figure for a season. In steadier times you may soften it slightly. What matters is that marketing does not drop to zero. Rebuilding visibility later almost always costs more than maintaining it now.
As your revenue grows, your marketing budget should grow alongside it. If the business is expanding and the marketing budget is standing still, that is usually a sign that something needs to change. Big, enduring companies are not relying on free social media and luck. They are quietly putting a slice of every dollar back into being seen, in the good years and the hard ones.
You do not need their budget. You do need a clear percentage and a plan. Choose a number that feels responsible and a little bit brave. Build it into your pricing. Protect it. Spend it on the things that help people find you, understand you and trust you. Then give it time.
Growth is not something you wait for. Growth is something you resource.
