How Much Should a Business Spend on Marketing?

Every business faces the question: how much should you spend on marketing? The answer depends on factors like your industry, growth goals, and revenue. But one thing is clear: investing in marketing is crucial for business success — especially in a competitive region like Southern Oregon.

Here’s a simple breakdown to help you budget smartly.

The Marketing Rule of Thumb

Most businesses allocate 7–10% of their gross revenue to marketing. This range is recommended by the U.S. Small Business Administration and works well for most industries.

New businesses (less than 5 years old): Consider spending 10–15% of revenue. You need to build awareness and attract customers.
Established businesses: Spending 5–10% is common. You’re likely focused on maintaining your brand and expanding strategically.

The Southern Oregon Factor

In areas like Medford, Ashland, and Grants Pass, local competition plays a big role. Businesses here thrive by standing out, and digital marketing is often the best way to do that.

For example:

Restaurants might need a higher budget to dominate on social media and local search.
Professional services like law firms can invest more in PPC (pay-per-click) ads to generate qualified leads.
Retail stores: Investing in seasonal campaigns and email marketing can drive foot traffic and online sales, especially during the holidays.
Home services: Contractors, plumbers, and electricians often benefit from local SEO and Google Ads to appear at the top of search results for urgent, location-based searches.
Healthcare providers: Clinics and dentists can focus on reputation management and targeted social media ads to attract new patients and build trust in their community.

Where Does the Money Go?

Marketing spend includes everything from website design to digital ads. Here’s a breakdown of common expenses:

Website Development (10–20% of your budget): A modern, optimized website is the foundation.
SEO (10–15%): Ranking on Google isn’t magic — it takes strategy and consistent effort.
PPC Advertising (20–40%): Paid ads provide fast results when done right.
Social Media Marketing (10–20%): Building a loyal audience pays off over time.
Content Creation (10–15%): Blogs, videos, and email campaigns keep your audience engaged.

By dividing your budget wisely, you can target key areas that align with your goals.

Budgeting for Growth

If your goal is to grow quickly, be ready to invest more. For example:

Expanding into new markets? Increase your digital ad spend to build awareness.
Launching a new product? Boost your social media and content marketing.

The key is flexibility. Regularly review your marketing performance and adjust your budget as needed.

Backed by the Data

Data supports these spending trends. A 2023 study shows that companies spent an average of 9.1% of their revenue on marketing, up from 6.4% in 2021 (HubSpot). However, this percentage varies across industries, and it’s crucial to tailor your approach. Similarly, in 2024, marketing budgets adjusted slightly, with a focus on ROI-driven strategies (Wall Street Journal).

Small Business Example: Local ROI

Let’s say you’re a boutique in Ashland earning $500,000 annually. If you allocate 10% of revenue to marketing, that’s $50,000 per year. Here’s how you might divide it:

Website Upgrade: $5,000
SEO Services: $7,500
Google Ads & Social Ads: $25,000
Social Media Management: $7,500
Email Campaigns: $5,000

This balanced approach ensures you cover key areas while focusing on ROI.

The Cost of Doing Nothing

Not spending on marketing is the fastest way to lose momentum. Without visibility, even the best businesses struggle to attract customers.

Think of marketing as an investment — not an expense. Each dollar you spend should bring you closer to your goals.

Ready to Grow?

At Creative Conspirator, we specialize in helping Southern Oregon businesses maximize their marketing budget. From website design to PPC ads, we’re here to help you succeed.

Let’s talk! Schedule a free consultation today and start building a strategy that works for you.