Nowadays, marketing methods are much more extensive, and small businesses are getting more opportunities in how they spend on them. Normally, marketing experts suggest that a considerable percentage of total revenue should be spent on marketing. However, the average marketing budget for small business varies due to certain factors, such as growth level, business size, etc. This percentage may be greater for startups.

Content

– Small Business Marketing Budget: Key Statistics
– Average American Marketing Spend
– Experts’ Recommended Spend on Marketing
– Marketing Budget By Industry
– Percentage Of Revenue For Marketing Budget
– Why Do You Need a Marketing Budget?
– Marketing Budgets Broken Down
– Specific Marketing Campaign Costs
– Social Media Marketing Budget

Small Business Marketing Budget: Key Statistics

– The average business marketing expense is 12.3% of revenue.
– Businesses in the U.S. collectively spend $481 billion annually on marketing.
– Each year, the average American business spends a significant $14,575 on marketing.
– In 2024, 94% of small businesses plan to boost their spending on marketing.
– The Consumer packaged goods industry spends the most on marketing 25.19%.
– About 87% of marketers are trying to grow or maintain their influencer marketing budget.
– In 2024, 56% of marketers plan to increase their budget for TikTok.
– About 8% of the marketing budget goes to email marketing, 14.9% to social media marketing, and nearly 36% of businesses allocate 10% to 29% to content marketing.

Average American Marketing Spend

In the U.S., there are over 33 million businesses. Their combined marketing expenses total $481 billion annually. Therefore, each year, the average American business spends a significant $14,575 on marketing.

From sole proprietorship to public limited companies, most allocate marketing budgets ranging from 14.9% to 18% of their total expenditures.

Interestingly, approximately 63.4% of small businesses spend less than $1,000 annually on marketing. With a median rate of 10%, the average business allocates 12.3% of its revenue to marketing expenses.

Source: Statista

Experts’ Recommended Spend on Marketing

For any small business starting, marketing is necessary to reach customers with your product. According to a recent marketing survey by Taradel, “In 2024, 94% of small businesses plan to boost their spending on marketing.”

Generally, a professional business plan writer advises allocating 7-10% of gross income to marketing purposes. However, this allocation can vary based on several factors, including your industry, the size of the business, and the growth stage.

Source: Forbes

Marketing Budget by Industry

The CMO Survey provides insight into the average percentage of revenue that different industries allocate to marketing.

Industry	Marketing Budget
Banking/Finance/Insurance	9.49%
Communication/media	14.27%
Consumer packaged goods	25.19%
Consumer services	11.74%
Education	11.50%
Energy	3.83%
Healthcare	6.80%
Manufacturing	3.75%
Mining/Construction	6.50%
Pharma/Biotech	12.83%
Professional services	7.08%
Real Estate	10.61%
Retail wholesale	14.52%
Service consulting	21%
Tech Software/platform	11.8%
Transportation	1.52%

Source: CMO Survey

The CMO Survey data reveals a big difference in marketing spending by industry. Consumer packaged goods (25.19%), communications/media (14.27%), and service consulting (21%) dedicate the most revenue to marketing, likely for brand awareness and customer acquisition. Conversely, transportation (1.52%), energy (3.83%), and manufacturing (3.75%) spend the least, potentially due to a targeted audience or established products. This data is a starting point, not a rule. Factors like company size, growth stage, and goals also affect marketing budgets.

Always use these percentages as benchmarks, especially for industries that are not allocating much to marketing budgets. Once you convince senior management of the necessity to implement your top strategies, you’ll surpass others in your industry. This will position your company as a shining example for other marketing teams to follow.

Source: HubSpot

Percentage of Revenue for Marketing Budget

According to Statista, “In 2023, companies allocated an average of 9.1% of their overall budget to marketing, which marks an increase from 6.4% in 2021.”

A LinkedIn article suggests that B2C companies typically allocate between 5-10% of their revenue to marketing. While B2B companies tend to allocate slightly less, around 2-5%.

Source: Statista

Why Do You Need a Marketing Budget?

Today’s marketing landscape is complex, with budget cuts becoming increasingly common, leading underperforming marketers to quickly face layoffs.

According to the State of Marketing Report, nearly 60% of marketers feel a greater need to expand their current marketing budgets compared to previous times.

A well-structured marketing budget is a critical component of a SBA business plan. It is essential for businesses seeking funding from the Small Business Administration (SBA).

A Typical Marketing Budget

According to Deloitte’s CMO findings, in 2023, approximately 13.6% of a company’s total budget is allocated to marketing. It is marking a 3.9% increase from the previous two years.

Based on the HubSpot survey of over 1,400 marketers, 41% stated they plan to increase their annual budget estimates for 2024.

A robust marketing budget is essential for an investor’s business plan to persuade investors. It is for the business’s growth potential and demonstrates how the business intends to attract and retain customers.

Prioritize Marketing Channels Shifting

Companies are seeing the highest Return On Investment from social media shopping tools, such as TikTok and Instagram Shops. The increasing popularity of social media influencers provides a significant opportunity to promote products. Brands can sell directly to consumers from the comfort of their homes through their favorite channels.

Additionally, investing in video ads is crucial for marketing budgets. As part of their content strategy, approximately 71% of marketers plan to incorporate either short-form or long-form videos.

The power of video storytelling allows brands to connect directly with customers. Meanwhile, TikTok also plans to increase its investment by 56% in 2024.

On average, 87% of marketers intend to maintain their investment in influencer marketing. Given the effectiveness of influencer marketing as a lead-generation tactic, it remains a worthwhile investment for 2024.

Source: HubSpot

Marketing Budgets Broken Down

On average, businesses allocate 53.4% of their digital marketing budget to marketing expenses, while small businesses allocate 46.6% of their marketing budgets to traditional advertising.

According to Gartner’s 2023 CMO Spend and Strategy Survey, experienced marketers are increasingly allocating their budgets evenly across paid media, technology, and outsourcing.

Paid media expenditure remains fixed at 25.6% as a major portion of marketing budgets.

Source: Gartner

Specific Marketing Campaign Costs

Small business owners need to carefully consider the real-world costs of various marketing tactics and tools when planning their marketing budgets. A robust marketing plan, integral to an e2 visa business plan, should comprehensively outline the business’s operations and strategies. Prioritizing spending on the following top five ROI-driving channels can help secure an advantageous deal:

– Social media shopping tools
– Web/blog/SEO
– Paid social media content
– Email marketing
– Content marketing

For instance, Forbes reports that nearly 36% of businesses allocate between 10% and 29% of their marketing budget to content marketing. Budgeting for content creation can start at around $29 per piece. With rates typically ranging from $0.05 to $1 per word. Premium content creators may charge up to $1,000 per piece.

Small businesses should budget for paid digital advertising, with costs typically ranging from $2.59 per click, $3.12 per 1,000 impressions, $0.66 to $1.23 for remarketing, and $15 to $800 for tools, with a minimum monthly spend of $350.

Monitoring ads for small businesses typically costs between $350 and $5,000 per month. It is inclusive of 12% to 30% of the monthly ad spend for marketing purposes.

Email marketing typically consumes about 8% of the marketing budget, equating to approximately $18 per month for up to 1,000 subscribers.

Statista forecasts that the social media marketing budget will reach $72.33 billion in 2023, translating to about $2,178.62 per business when divided among all U.S. businesses.

Automation costs should also be factored into the marketing budget, varying based on the extent of automation across all marketing tactics.

Budgets for marketing tools and software can range from free options to thousands of dollars per month, depending on the sophistication required.

According to The CMO Survey, traditional marketing budgets are anticipated to decrease by 2.6%, reflecting a shift away from print ads, outdoor advertising, and radio in favor of digital strategies.

Source: Statista, Upflip, Gartner, Forbes

Social Media Marketing Budget

Social media advertising has become the primary focus for most small businesses today. According to a 2022 survey by Visual Objects, 70% of small businesses maintain a significant budget for social media marketing. Of these businesses, over 25% allocate between 10% and 30% of their advertising budgets to social media.

A Forbes survey indicates that 60% of small business owners prefer social media marketing over Google Ads, content marketing, SEO, and print advertising. Statista reports that approximately 14.9% of current marketing budgets are invested in social media marketing.

Source: Forbes, Visual Objects, Statista

Final Verdict

As shown here, successful marketing isn’t just about strategic thinking. It also involves adhering to a strict budget, achieving new growth levels, and selecting the most cost-effective options for your company.

Research suggests that companies should allocate an average of 39.3% to 75.5% of their marketing budgets to digital marketing, and between 24.5% and 60.7% to traditional marketing, depending on the industry.

Now armed with typical percentages for marketing budget allocation relative to revenue, you can effectively manage your marketing budget with confidence.

For more statistical articles, check out the average cost of starting a small business, small business failure rate, and number of small businesses in the US.