How Much do Small Businesses Spend on Advertising?





Small businesses are spending more on their marketing budget numbers. In fact, advertising expenses have gone up almost 4% in 2023 from the previous two years. Deloitte reports advertising budgets will make up about 13.6% of the total for these enterprises this year.

What is The Average Marketing Budget for a Small Business?

The average marketing budget for a small business varies depending on the industry, the size of the business, and the marketing goals. However, a good rule of thumb is to spend between 7% and 10% of your gross revenue on marketing. According to Salesforce, B2C companies should spend 15% of their revenue on campaigns. Hubspot reports the average spend for a business was 8.7% of total revenue last year.

For example, a small business with $1 million in annual revenue could have a marketing budget of $70,000 to $100,000. This budget could be used to cover a variety of marketing expenses, such as:



  • Advertising: This includes paid advertising on channels such as Google, Facebook, and Instagram.
  • Content marketing: This includes creating and distributing blog posts, articles, e-books, and other content that attracts and engages potential customers.
  • Public relations: This includes generating positive media coverage for your business.
  • Events and trade shows: This includes attending and exhibiting at industry events and trade shows.
  • Search engine optimization (SEO): This involves optimizing your website so that it ranks higher in search engine results pages (SERPs).

The specific marketing channels that you use will depend on your target market and your marketing goals. However, by investing in a solid marketing budget, you can reach more customers, generate more leads, and grow your business.

Here are some additional tips for creating a small business marketing budget:

  • Start by setting your marketing goals. What do you want to achieve with your marketing efforts? Once you know your goals, you can start to develop a budget that will help you reach them.
  • Research your industry and your competitors. What are other businesses in your industry doing with their marketing budgets? This will give you a good starting point for your own budget.
  • Be flexible. Your marketing budget may need to change as your business grows or as your marketing goals change. Be prepared to adjust your budget accordingly.
  • Track your results. It’s important to track the results of your marketing campaigns so that you can see what’s working and what’s not. This will help you make informed decisions about how to allocate your marketing budget in the future.

What Marketing Costs Need to be Taken into Account?

Small businesses have two different marketing and advertising budget costs. These can be subdivided for a target audience that prefers online marketing, or offline small business tools.


Small Business Deals


Online Advertising Budget

Online advertising is increasingly significant, with billions spent globally. Google Ads are vital for attracting potential customers using targeted keywords. Social Media Marketing across various platforms like Instagram and Facebook is crucial for engagement.

SEO enhances online visibility through organic searches. Digital Marketing encompasses diverse online channels, including email and pay-per-click marketing. Platforms like Facebook and TikTok offer unique advertising opportunities, and content marketing remains a popular and effective strategy.

Digital advertising had an estimated worth of $210 billion by 2022.

Offline Advertising Budget

Offline advertising remains relevant, with substantial investments in traditional mediums. Local newspapers offer targeted advertising opportunities, aligning with digital strategies for a comprehensive marketing approach.



Trade publications are excellent for reaching specific industries, and business cards remain a fundamental tool for personal branding and networking. These traditional methods complement online strategies, forming a holistic approach to marketing.

how much do small businesses spend on advertising

 

1. Online Advertising: Marketing Budgets for Small Businesses

Last year alone, around $616 billion USD was spent on digital advertising globally. The following are some of the best investments in that space.

StrategyDescription
Google AdsA simple way to attract potential customers using Google's online advertising tool. Requires selecting keywords that align with business goals. Also known as Google Adwords.
Social Media MarketingInvolves creating content that promotes products and services across various platforms like Instagram and Facebook. It is important to diversify platforms and not put all efforts into one.
Search Engine OptimizationSEO is the practice of optimizing content and websites to rank on search engines through non-paid or organic searches. This can involve the use of both internal and external links.
Digital MarketingThe process of using different online channels to attract customers. This can involve messaging and email marketing. Other options include pay-per-click and content marketing.
Pay Per Click AdvertisingA strategy where advertisers pay every time a user clicks on their ads. In 2022, it was reported that a PPC campaign brought in $2 for every $1 spent.
Facebook PageUseful tools for small businesses, these pages can help to grow a customer base. Tips for success include having a clear profile picture (a headshot for a freelancer) and utilizing social media statistics to evaluate campaigns.
Email MarketingSmall businesses often spend between $9 and $1,000 a month on email marketing. Services like Mailchimp offer A/B testing.
TikTok AdvertisingA competitive advertising platform that offers instant forms that load faster than landing pages. As per a recent survey, 24% of professionals use TikTok advertising to increase sales.
Amazon AdvertisingSuccess with Amazon advertising often involves crafting clear product detail pages. This is a good marketing investment.
Content MarketingA popular method of advertising which involves sharing social media posts, blogs, articles, and videos. Two out of three consumers reportedly prefer branded content over traditional advertising. Hiring freelancers can be a cost-effective way to manage a content marketing strategy.

Google Ads



This is a fairly simple way to draw in potential customers. It is Google’s online advertising tool. Your business needs to choose keywords that align with your goals. This option is also called Google Adwords.

Social Media Marketing

Simply put this is about creating content that promotes your product and services. Don’t put all your eggs in one basket — many businesses use a variety of platforms like Instagram and Facebook.

Search Engine Optimization



SEO is about optimizing content and websites so they rank on search engines through nonpaid or organic searches. Internal and external links make a difference to land new customers.

Digital Marketing

This is the art of using different online channels to attract customers to your target market. Small business advertising ideas in this space include messages and email marketing. Pay-per-click and content marketing are other choices.



Pay Per Click Advertising

PPC is a strategy whereby advertisers pay when users click on their ads. In 2022, selecting a PPC campaign brought in $2 for every $1 spent.

Facebook Page

These are good tools for small businesses, a smart part of a USA spend. Little things matter to a customer base here. A profile picture should be a headshot for a freelancer. Adopt social media statistics to gauge the campaigns.



Email Marketing

Small businesses generally spend somewhere between $9 dollars to $1,000 a month on this strategy. Places like Mailchimp offer A/B testing.

TikTok Advertising

TikTok advertising is a competitive landscape. This advertising for business offers instant forms that load faster than landing pages. A recent survey found 24% of professionals use this to increase sales.



Amazon Advertising

One of the big tips to be successful and make more money with Amazon advertising is to craft clear product detail pages. These are good marketing investments.

Content Marketing



This is one of the more popular methods for good reason. Two out of three consumers like branded content better than conventional advertising. These types of online ads are all about sharing social media posts, blogs, articles, and videos. Hire freelancers here to save on your marketing strategy.

2. Offline Advertising: How Much Small Businesses Spend

This is any technique that is used to increase brand awareness that’s not Internet-based. Last year the spend on print ads and other mediums was $207.6 Billion.

Local Newspapers

A business should consider ads in local papers. Images need to line up with each other. This can be an effective omnichannel strategy that includes social media platforms.



Trade Publications

These publications are an excellent place for strategy development if you’re looking to boost sales with limited funds. Here’s a resource guide to get started.

Business Cards

Taking advantage of print mediums for better sales can include business cards. Consistency is key. Use the same logo on the card and in other areas like your website for these marketing campaigns.

The Average Marketing Budget of Small Businesses by Industry

Any successful advertising spend varies by industry. Here’s a quick rundown of some of the costs involved and marketing methods. Businesses allocated 8.7% of their revenue to marketing last year.

  • Real estate agents and brokers spend about 3.84%.
  • Furniture stores about 4%.
  • Beverage production is about 2.73%
  • Restaurants and other dining establishments 1.93%

What Factors Would Decide The Marketing Budget for a Small Business?

Marketing is essential for any small business that wants to grow and succeed. However, marketing can be expensive, so it’s important to determine how much you can afford to spend before you start creating a marketing plan.

There are a number of factors that will affect the size of your marketing budget, including:

  • Your business goals. What do you want to achieve with your marketing efforts? Do you want to increase brand awareness, generate leads, or drive sales? Your goals will help you determine how much you need to spend on marketing.
  • Your industry. Some industries are more competitive than others, which means you’ll need to spend more on marketing to reach your target audience.
  • Your target market. Where are your customers located? What are their interests? Once you know who your target market is, you can start to determine which marketing channels are most effective for reaching them.
  • Your budget. How much money can you afford to spend on marketing? It’s important to be realistic about your budget and not overspend.
  • Your competition. What are your competitors doing with their marketing budgets? This will give you a good idea of how much you need to spend to stay competitive.

Once you’ve considered all of these factors, you can start to create a marketing budget that fits your needs. Here are a few tips for creating a budget that works:

  • Start by setting your marketing goals. What do you want to achieve with your marketing efforts? Once you know your goals, you can start to develop a budget that will help you reach them.
  • Research your industry and your competitors. What are other businesses in your industry doing with their marketing budgets? This will give you a good starting point for your own budget.
  • Be flexible. Your marketing budget may need to change as your business grows or as your marketing goals change. Be prepared to adjust your budget accordingly.
  • Track your results. It’s important to track the results of your marketing campaigns so that you can see what’s working and what’s not. This will help you make informed decisions about how to allocate your marketing budget in the future.

Here are some additional tips for creating a small business marketing budget:

  • Start small and grow your budget over time. If you’re just starting out, don’t feel like you need to spend a lot of money on marketing. You can start with a small budget and gradually increase it as your business grows.
  • Focus on the most effective marketing channels. Not all marketing channels are created equal. Some channels are more effective than others for reaching your target market. Do some research to find out which channels are most effective for your business and allocate your budget accordingly.
  • Get creative with your marketing. There are a lot of ways to market your business without spending a lot of money. For example, you can create content, participate in social media, or attend industry events. Get creative and find ways to market your business that fit your budget.

By following these tips, you can create a marketing budget that helps you achieve your business goals.

Here are some additional factors that may affect your marketing budget:

  • The size of your business. The larger your business, the more you’ll need to spend on marketing to reach a wider audience.
  • Your stage of business. If you’re just starting out, you’ll need to spend more on marketing to build awareness and generate leads. Once you’re established, you can start to scale back your marketing budget.
  • Your location. The cost of marketing can vary depending on where you’re located. For example, marketing in a major city is typically more expensive than marketing in a rural area.
  • The economy. The state of the economy can also affect your marketing budget. If the economy is in a recession, you may need to reduce your marketing budget.

It’s important to remember that your marketing budget is an investment in your business. By investing in marketing, you can reach more customers, generate more leads, and grow your business.

How Much Do Small Businesses Spend on Advertising and Marketing?

Adopting a good plan means understanding some numbers.

TopicInformation
Recommended Advertising Budget for Small BusinessesThe US Small Business Administration recommends 7% or 8% of gross sales
Average Marketing Budget SizeFor small businesses, it typically ranges between $10,000 to $50,000
Budget Calculation ExampleIf a business makes $100,000 annually, the advertising budget should be $7,000 to $8,000
Website Design DevelopmentFor a website of 8 to 16 pages, you'll typically pay $2,000 to $9,000
Google Advertising CostsThe average cost per click on Google Ads is $2.32
Content Search Engine Optimization (SEO)SEO services in the USA cost around $100 to $250 per hour
Advertising Focus for Small Business OwnersSmall business owners should focus on a combination of email marketing, search ads, and physical materials like flyers and brochures

Entrepreneur Insights on a Good Marketing Budget for Small Businesses

Following are a few more insights that can make a difference. Here are some expert insights on digital marketing tools you can use.

  • Want to invest more in your marketing efforts? Knowing your competitors and audience helps.
  • Online advertising costs infographics: Design services cost $30 to $120 per hour.
  • Content Marketing (texts, photos, videos): You can spend up to $10,000 a month.
  • Mobile Ads: These can appear on websites and apps.
  • Set Growth Goals: Use small business SEO statistics as references.
  • Pay-per-click advertising (PPC): Company size makes a big difference to cost. There are many advertising marketing channels that offer this option.
  • How much does email marketing cost?: The average cost is $300 to $500 per month.
  • The Bottom Line: How Much Should a Small Business Advertising Budget Be?: A good benchmark from SalesForce is 10% to 20 % of your gross income.

Advertising Spend FAQs

How Much Should a Small Business Spend on Advertising?

You should split the cost into different stages through the sales funnel.

How Much do Small Businesses Spend on Marketing per Year?

Some estimates are as high as $180,000 per year.

How Much Does Advertising Cost for a Small Business per Month?

The average is 8.7% of company revenue in 2022.

How Much do Startup Companies Spend on Advertising?

These numbers are higher. Startup statistics report that spend 30% to 50% of their advertising funds.

Should Small Business Owners Spend Money on Online Advertising?

Yes, it drives growth.

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Rob Starr Rob Starr is a staff writer for Small Business Trends. Rob is a freelance journalist and content strategist/manager with three decades of experience in both print and online writing. He currently works in New York City as a copywriter and all across North America for a variety of editing and writing enterprises.

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