How much a small business should spend on digital marketing

The short answer

Most small businesses spend modestly on digital marketing. In LocalIQ’s 2025 small business marketing trends report, based on more than 730 small business owners and marketers, only 5% had no marketing budget at all and 33% spent under $1,000 a month. Larger companies spend a share of revenue: Gartner’s 2025 CMO Spend Survey found marketing budgets averaged 7.7% of company revenue, but the vast majority of those respondents reported annual revenue over $1 billion, so treat it as a ceiling, not a target.

The right number for you depends on what a new customer is worth, how competitive your market is, and how fast you need results. Below are the benchmarks in more detail, typical budget splits by goal, and a simple method to set a budget you can measure.

What the published benchmarks say

• Small businesses (LocalIQ, 2025): 33% of surveyed small businesses spent under $1,000 a month on marketing, and businesses with 10 or fewer employees were 31% more likely to spend under $500 a month. The most used channels were unpaid social media (52%), social media ads (47%) and search advertising (40%).
• Large companies (Gartner, 2025): marketing budgets were flat at 7.7% of revenue, with paid media taking 30.6% of the marketing budget. The survey covered 402 marketing leaders in North America, the UK and Europe.
• SEO retainers (SE Ranking): in SE Ranking’s pricing survey of 260 agencies, 64% charged under $1,000 a month and 20% charged $1,000 to $2,000. Our guide to SEO costs covers this in detail.

Benchmarks tell you what others do, not what works for you. A plumber with high-value emergency jobs and a café with small average tickets should not use the same percentage.

Where the money goes

A small business digital marketing budget usually covers some mix of these:

Our Google Ads cost guide explains click prices and management fees in more depth.

Sample budget splits by goal

These are starting points we use when planning, not rules. Adjust after the first few months of real data.

• Need leads this quarter: weight the budget toward paid search, with a smaller share for SEO basics and tracking. Paid search reaches people already looking for what you sell.
• Want lower cost per lead over time: a steadier split between SEO and paid search, shifting toward SEO as organic leads grow.
• Strong repeat business: a meaningful share for email marketing to past customers, plus enough search presence to win new ones.
• New business or new location: spend first on a solid website, Google Business Profile and reviews, then add paid search.

Revisit the split every quarter, once you can see which channel produces customers at the lowest cost.

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How to set your own budget in five steps

1. Work out what a customer is worth. Average first sale, and how much a typical customer spends over a year or two.
2. Decide what you can pay to win one. If a customer is worth $2,000 in profit over time, paying a few hundred dollars to acquire one may be sensible. Pick a target cost per customer.
3. Estimate how many customers you want from digital channels each month.
4. Multiply. Target cost per customer times customers wanted gives a working monthly budget.
5. Hold it long enough to learn. Paid search needs a few weeks to gather data. SEO needs months. Review monthly, change quarterly.

If the math produces a number you cannot afford, narrow the scope: one service, one area, one channel, done well, beats a thin spread across everything.

A worked example

Here is how the five steps play out for a hypothetical home services company. The numbers are illustrative, not benchmarks.

• A typical job brings in $1,500 of revenue and about $600 of gross profit. Many customers come back or refer a neighbor, so the owner values a new customer at about $1,000 in profit.
• The owner is comfortable paying up to $250 to win a customer.
• The goal is 12 new customers a month from digital channels.
• 12 customers times $250 gives a working budget of $3,000 a month across ads, SEO and tools.
• After three months, tracking shows paid search winning customers at $200 each and SEO starting to add leads. The owner keeps the total steady and moves money toward whatever produces customers at the lowest cost.

The point is not the specific figures. It is that the budget comes from your own numbers, and you can tell within a quarter whether it is working.

Signs your budget is too low, or wasted

• Google Ads campaigns that run out of budget by mid-morning every day.
• No call or form tracking, so nobody knows which channel produced leads.
• Spend split across five channels with too little in each to learn anything.
• Paying an agency more in fees than you spend on media for a small paid campaign.
• Reports full of impressions and clicks with no leads, sales or cost per lead.

Hidden costs to include

• Your own time or staff time for approvals, photos, reviews and follow-up.
• Software: email platforms, call tracking, scheduling and CRM tools.
• Website fixes needed before ads or SEO can work, such as slow pages or broken forms.
• Creative work: photos, video and ad design.

How JLB USA prices digital marketing

JLB USA has run web design and marketing for growing businesses for more than 15 years, starting in Fort Lauderdale and Boca Raton, with 500+ clients and 1,000+ projects. Our SEO services are billed month to month, and you can cancel after any month. Google Ads campaigns are adjusted weekly, and our email marketing team works on MailChimp, Klaviyo and HubSpot. We report in leads and cost per lead, so you can judge the budget on results.

Keep reading

• New website launch checklist: what to check before and after go-live
• WordPress vs Wix: which is right for a growing business?
• How much does a landing page cost? Options from builders to custom
• How much does a website cost for a small business?

Related services

• SEO services
• Google Ads cost for small business
• SEO vs PPC
• Email marketing