How Much Should I Be Paying for Marketing? A Small Business Marketing Budget Guide

"How much should I be paying for marketing?" is really two questions. How much should your total marketing budget be? And is what you're paying an agency or vendor fair?

This guide answers both. You'll get the most common way to set a marketing budget, a simple worksheet, and a way to check whether your current marketing spend is paying off. If you want the agency-pricing side in detail, see our marketing agency cost per month guide.

The short answer

Most small businesses spend somewhere between 5% and 10% of revenue on marketing. Businesses in growth mode, new businesses, and companies in competitive industries often spend more. These are commonly cited planning ranges, not rules. The U.S. Small Business Administration has long suggested around 7–8% of revenue for small businesses with healthy margins. Gartner's annual CMO Spend Survey has reported larger companies averaging close to 8% of revenue in recent years.

What percentage of revenue should be spent on marketing?

The percentage-of-revenue method is popular because it's simple and scales with your business. Important: this number is your total marketing budget. It includes agency fees, ad spend, software, video production, printing, sponsorships, and any marketing staff.

A better method: work backward from your goals

Percentages are a starting point. The better question is: what does a new customer cost, and what is one worth?

Step 1: Know what a customer is worth. Average job or sale × profit margin × how many times they buy from you. Example: A Picayune plumbing company averages $800 per job at 40% margin, and a typical customer calls them three times over a few years. That customer is worth about $960 in profit.

Step 2: Know what a customer costs. Marketing spend ÷ new customers = cost per customer. If $4,000 a month in marketing brings 20 new customers, each one costs $200.

Step 3: Compare the two. $960 in profit per customer against $200 to win one is a healthy return. In this example, spending more would likely be worth it. This is how you measure marketing ROI. It's also why we connect marketing to a CRM: without lead-source tracking, you're guessing at Step 2. These numbers are an illustration, not a forecast.

How to split your marketing budget

A common starting split for a local service business: ad spend (Google, Meta) 30–40%, agency or staff 35–50%, content and video production 10–20%, software (CRM, email, scheduling) 5–10%, and local sponsorships, print, events 0–10%. Adjust from there. If your Google Business Profile drives most of your calls, put more into local SEO and reviews. If you're launching something new, lean into ads first.

Signs you're paying too much, or too little

You may be paying too much if you can't name what you get each month, nobody can tell you which channel produced your last ten leads, your ad spend goes through the agency with an unexplained markup, or you're locked into a long contract with no reporting.

You may be paying too little if leads come in but nobody follows up within the hour, your website hasn't changed in years, you post rarely with no video, or competitors show up above you on Google Maps.

What marketing costs at Four Pillar Marketing

So you can compare, here's what we charge. Bundled monthly packages: Starter $4,500/mo, Growth $7,900/mo, Premium $11,000/mo, and Enterprise from $18,500/mo. Ad spend is billed separately. Video only: our Content & Video Post Package is $250 per video, at 6, 8, or 12 videos a month ($1,500, $2,000, or $3,000/mo).

Using the table above, a business doing around $1 million a year with an 8% budget ($6,667/mo) could cover a Starter package plus a modest ad budget. Full details are on our pricing page. Want a marketing budget built around your numbers? Schedule a Growth Strategy Call. We're headquartered in Picayune, MS, and serve businesses across Mississippi and Louisiana.