How Much of My Budget Should Be Spent on Marketing?

Unfortunately, there is no easy answer. 




People generally recommend using the rule of thumb, where companies should spend around 5% of their total revenue on marketing to maintain their current revenue level. Companies looking to gain a bigger market share should spend around 10%.  Nonetheless, the answer always varies by several factors. What is your industry? What is your growth rate? Your personality? We all know high marketing budgets aren't sexy but they are directly correlated to business growth.


So within the budget, how can I allocate my budget into different advertising methods? For instance, if you are in an industry like real estate, then you may decide to spend more on traditional marketing (Branding, Flyer mailout, and outdoor advertisement) instead of Google Adwords or promoting your business through community events and send out flyers to neighbours. If you run a B2B business which is more complex and has a longer sale cycle, then the typical Google Adwords won't work for you. You may reach out to your potential client through the email blast, referrals or even direct mailing!



Another example here, if you operate a food delivery service in local areas, you should definitely spend most of your budget into Google Adwords or Social Media Campaign. Yet, your CPC(*Cost Per Click) should remain less than 15% of your product's value. In fact, in competitive industries, you may have to pay more just to get the same results. However, you can always see and track and record your ROI, distinguishing the source of leads. Here is the average cost per click in Adwords across all industries.




Average CPC in Adwords across all industries


  • Advocacy – $1.43
  • Auto – $2.46
  • B2B – $3.33
  • Consumer Service – $0.81
  • E-commerce – $1.16
  • Education – $2.40
  • Employment Services – $2.04
  • Finance & Insurance – $3.44
  • Health & Medical – $2.62
  • Legal – $6.75
  • Real Estate – $2.37
  • Technology – $3.80
  • Travel & Hospitality – $1.53




So, where exactly should I spend my marketing budget? Google ads? Facebook ads? traditional flyer mailouts? or even TV Commercials? Well, we have a simple solution right here.

Just answer 5 simple questions through here and we'll give you an instant budget.




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