Average Marketing Budget for Small Business: U.S. Industry & Trends

Owners ask the same thing: what is the average marketing budget for small business this year? The answer shifts with industry, size and goals.

I personally find a solution for it. One client, a small wellness brand, faced high ad bills and poor sales. 

We adjusted. More went into SEO and simple content. Less went into ads that drained cash. In weeks, their site started pulling steady leads again. That story still guides me.

So, first, know why budgets vary across industries and stages of growth. Then, learn how money splits across channels. 

This can be search, social, video, email and even AI tools. Finally, set a budget you can satisfy and trust. Start with revenue, test often and put more only where results prove it.

What is The Average Marketing Budget for Small Businesses Across Different Industries?

Let’s see the best by industry from the latest CMO Survey firm & industry breakout (US panel). From here, you can easily pick the closest match to your sector. Then, tune up or down for your size and goals.

Average marketing spend by industry 

Source: The CMO Survey, Firm & Industry Breakout Report, 2025 (“Marketing expenses as a percent of revenues,” industry table). Figures are means reported by sector. The CMO Survey

Helpful context: At a company-size level, firms under $10M revenue show higher marketing ratios than big enterprises. That’s normal for new brands buying growth. The CMO Survey

What this means for you

You have to match spending to how your buyers decide.

1 . High-impulse, visual categories (beauty, CPG, D2C) need upper-funnel + creator + retail media. Ratios skew high. 

2 . Local services and healthcare win with SEO, reviews and proof. Ratios sit mid-range. 

3 . Capital-heavy sectors (energy, construction) can run tight unless you enter a new region or launch a new offer. (Source: The CMO Survey)

Expect paid media inflation. Plan tests weekly.

Search and social keep getting pricier. Use tighter match types, better creative and zero-waste geo. Track CPL and CAC over clicks. 

Reality check on averages.

All-industry average lands near 9.4% of revenue in the US sample this spring. That’s up from 7.7% last fall. Your number still depends on industry + goal + stage. (The CMO Survey)

Large-company CMOs report 7.7% again in 2025. Don’t copy that if you’re a growth-stage SMB.

Where to put the money (by common SMB profile):

Retail/eCommerce: Product video + creator whitelisting + PMAX; keep always-on branded search; build email/SMS to lower blended CAC.

Healthcare & Wellness: Author-first content, E-E-A-T signals, local SEO, review volume, light Meta retargeting; be cautious on broad TikTok unless creative scale is ready. (The CMO Survey)

B2B/SaaS: LinkedIn + webinars + bottom-funnel search; fewer channels, deeper content. Track pipeline, not clicks.

Hospitality/Restaurants: Short-form video + local creators + offer units; optimize Google Business Profile and UGC.

Why do marketing budgets vary so widely among small businesses?

Buyers differ by industry. Growth stage matters. Media prices move. AI shifts spend. Rules change. You set a budget to fit that reality—not a fixed rule.

The influence of industry type

Consumer brands fight for attention every day. They spend more to stay visible. Think CPG, beauty, media and real estate. CMO Survey data shows the heaviest ratios here.

B2B and services sell with trust and proof. They rely on content, events and sales support. Spend sits mid-pack.

Heavy industry and energy move more slowly. Sales cycles are long. Ad needs are lean. Their ratios stay low.

Stage of growth

Startups buy speed. They push harder in the first 12–24 months.

Established firms protect margins. They hold or trim unless a launch or a new market opens.

Recent data shows budgets equal ~9.4% of company revenue on average (all firm types; US sample).

External shifts

Ad costs keep rising. Search CPCs and CPLs trend up again this year. Plan for higher-paid media to hold the same reach. 

Budgets stabilize at larger firms. Gartner reports 7.7% of revenue as the norm for big-company CMOs for the second year. Small firms often sit above or below that based on goals. 

Channel mix keeps tilting to digital. Traditional line items fall or stay flat. 

Macroeconomy cools plans in some verticals (tariff-sensitive goods). Expect tighter TV and print and more measurable social/retail media/CTV.

Case Study (budget intensity in a high-spend category)

e.l.f. Beauty (cosmetics/CPG) pushed marketing to ~25% of net sales by FY2024. Sales soared. 

The team moved fast on TikTok, creators and CTV and cut what did not work. This shows why beauty and CPG often land at the top of the table. Company site: elfcosmetics.com. 

How Are Marketing Budgets Split Across Digital Channels?

Marketing spend no longer follows a fixed formula. The mix depends on channel costs, industry realities and consumer habits. Indeed, businesses must decide which platforms earn money back and which are just noise.

Paid vs. Organic: Where Businesses Put Their Money

Small businesses still divide budgets between paid channels and organic growth, but the balance has shifted.

Search and Shopping Ads (Google & Microsoft). These remain the first stop for intent-driven buyers. 

Costs are higher than last year, with CPCs and CPLs increasing across nearly every vertical. In retail and services, branded search now consumes 20–30% of ad spend just to defend market share.

Paid Social. Short video and performance ads dominate. Social platforms take about 11.3% of the average marketing budget today. (The CMO Survey).

Predictions for growth remain strong, but past forecasts often overshot reality.

Email and CRM. This is the unsung workhorse. Litmus data (2025) shows most businesses still earn $10–$50 for every $1 spent on email. This makes it the most efficient digital channel.

Organic SEO and Content. While ads eat a larger share, SEO continues to compound results with lower cash input. 

With Google, Bing and AI-driven search tools (like Perplexity or ChatGPT) surfacing entity-rich and author-backed content, quality publishing is now a survival factor.

Thus, paid channels bring speed but cost more every quarter. Organic channels remain slower but build stability and trust.

Rising Categories: AI Tools, Automation and Data Platforms

Another big shift is where budgets go outside ads.

AI-powered marketing tools

Companies now set aside 20–40% of marketing budgets for tech, compared to much less two years ago. This includes AI ads and content tools, predictive analytics and creative automation.

Customer Data Platforms (CDPs)

With privacy laws tightening in the US and EU, SMBs invest in CDPs to unify email, CRM and ad data. This allows better retargeting and lower wasted spend.

Why it’s important

PwC projects advertising spend will grow three times faster than consumer spending by 2029. 

AI-driven targeting and new ad formats will drive this. Without tech investment, smaller firms will struggle to keep up.

The Hard Reality of Costs

1 . Google Ads. CPCs keep rising across competitive industries like finance, retail and SaaS. A local services firm in the US now pays up to $40+ per lead in legal and insurance categories.

2 . Meta and TikTok. CPMs fluctuate by season, with Q4 holiday costs spiking as usual. TikTok’s CPC ranges $0.17–$1.00, depending on creative quality. AI Meta ads are also a trendy budget for marketing.

3 . LinkedIn. Still the most expensive B2B channel. CPCs remain high but justify the spend when tied to high-value contracts. 

4 . CTV (Connected TV). Linear TV continues to lose ground. CTV spending grows because brands can now measure impressions and outcomes better than ever.

Budgets must be reviewed monthly. The same $10,000 in ads this year often delivers less reach than last year.

Channel Priorities by Industry

Not every business needs the same mix. Here’s how 2025 looks by sector:

1 . Retail & eCommerce → Ads + Influencers

Paid search and shopping ads protect conversions. TikTok, Instagram and retail media (Amazon, Walmart Connect) help push discovery. Pinterest is also a superb source of brand marketing. Retail media spend rose 23% to $53.7B in 2024 and the momentum continues.

2 . Healthcare & Wellness → SEO + Trust Content

People research providers deeply before they buy. Winning requires author-first blogs, local SEO and reviews. Ads can help, but credibility comes first.

3 . Restaurants & Hospitality → Social + Local Ads

TikTok, Reels and Shorts drive foot traffic. Geo-targeted Google Ads and updated Google Business Profiles ensure discovery. Viral menu content works better than discount flyers.

4 . B2B & SaaS → Content, LinkedIn, Webinars

The B2B buyer journey is longer. Budgets lean on search for bottom-funnel leads, then webinars and LinkedIn for nurturing. Measurement must tie to the pipeline, not just clicks.

Hidden But Rising Costs

Content creation. Every platform wants fresh video. SMBs now produce dozens of creatives per campaign cycle.

Talent and staff. Media buyers, video editors and analytics pros cost more than automation.

Tech subscriptions. From AI copywriters to data visualization tools, recurring martech fees quietly take 5–10% of total budget.

Yet, small businesses that ignore these “hidden” items often overspend on ads and wonder why net returns shrink.

Suggested Budget Splits (Practical Ranges)

For a small business starting point:

1 . Retail/eCommerce: Search & Shopping (25–35%), Paid Social (25–35%), CTV/Video (10–20%), Email (10–15%), SEO (10–15%), Martech (5–10%).

2 . Healthcare/Services: SEO (25–35%), Local Ads (15–25%), Paid Social (10–20%), Search (15–25%), Email (10–15%), Martech (5–10%).

3 . B2B/SaaS: LinkedIn (20–30%), Search (20–30%), Content/Webinars (15–25%), Video (5–10%), Email (10–15%), Martech (10–15%).

4 . Restaurants/Hospitality: Social Video (30–40%), Local Search/Maps (10–20%), Search (10–20%), CTV/Video (5–10%), Email/SMS (10–15%), SEO (5–10%).

So, always treat these as bands, not rules. Move money monthly based on CAC, LTV and return per channel.

Expert Signals

IAB (Sept 2025 update): Buyers still grow social, retail media, CTV at double-digit rates this year, but trim overall 2025 spend outlook to +5.7% on tariff worries. Move budget to measurable media. Morningstar

PwC (July 2025): Ads will drive E&M growth to $3.5T by 2029, with AI-powered formats and CTV leading gains. Plan for more data-driven video. PwC

Case study (channel mix in action)

Jones Road Beauty (indie DTC brand) shifted spend toward TV video while keeping performance. 

With the measurement of linear/CTV value, the team scaled TV by about 2× without losing ROAS. 

They used creative testing and incrementality, then held only the units that moved sales. (Company site: jonesroadbeauty.com)

How should Small Businesses Set the “Right” Marketing Budget?

Start with revenue, tie to goals, then adjust by proof. Let’s explain:

Percentage of revenue vs. strategic goals

Use a revenue anchor. For firms under $5M revenue, the long-running 7–8% baseline still works as a starting point. It assumes 10–12% profit margins and steady growth aims. WebFX

Let goals move the number.

Grow fast? Spend above the baseline (new markets, launches).

Protect margin? Sit near the baseline and squeeze efficiency.

Retention play? Shift dollars to email/CRM and service content.

Updated benchmarks for <$5M revenue

Use these practical bands as you model your plan; they reflect what US/UK SMB advisors and recent surveys show this year.

Baseline for <$5M: 7–8% of revenue for steady growth. WebFX

Aggressive push: 10–15%+ when entering a market, launching a product, or chasing share. (Forbes’ 2025 guidance walks a $5M example at ~7.7% = $385k as a baseline reference.) Forbes

SaaS nuance: Private B2B SaaS spends ~8% of ARR on marketing at the median, with sales another ~13%—use CAC payback to decide how far you can stretch. (SaaS Capital)

SMB ad climate: Intuit’s 2025 SMB study shows owners still plan to lean into digital and quantify ROI; the model ties spend to receipts and stated budget ratios across <$9.9M firms. (digitalasset.intuit.com+1)

So, pick the lowest percent that still hits pipeline and revenue targets. Anything else is noise.

When to spend aggressively vs. conservatively (“stretch or protect”)

A . Stretch when:

CAC payback sits <12 months (SaaS) or within your cash cycle (retail).

You can hit incremental reach without CPM shock (seasonality checked).

A clear moat exists: product reviews, price power, or distribution advantage.

B. Protect when:

Paid search or social shows rising CPC/CPM with flat conversion (re-route to email/SEO).

Macro risk clips budgets. IAB’s Sept-2025 update shows buyers trimming full-year growth to +5.7% on tariff concerns, even as social/retail media/CTV still climb double-digits. TV Tech

CFO asks for evidence. Forrester notes only ~35% of B2B marketers expect budget lifts ≥5%—proof beats promises.

Step-by-step: a budget you can defend

1 . Start with revenue %

<$5M: plug 7–8% in your model. Add +2–5 pts if growth is the mandate. WebFX

2 . Adjust for your industry reality

If you sell a considered offer (legal, healthcare, B2B), weigh SEO, proof content and email.

If you sell an impulse offer (fashion, beauty, DTC), weigh to video, creators and retail media.

Use SaaS-specific 8% marketing / 13% sales as a guardrail when software is the product. (SaaS Capital)

3 . Allocate by goal + channel performance

Map every dollar to a job: capture (search), demand (video/CTV/creators), or value (email/loyalty).

Pull fresh cost curves before launch: CPC/CPM moves monthly in 2025; plan pacing. IAB’s Sept update confirms digital formats still grow while linear drops. TV Tech

4 . Track ROI with simple guardrails

CAC ≤ 1/3 LTV (commerce) or payback ≤ 12 months (SaaS).

MER (total revenue ÷ total ad spend) beats channel ROAS when you scale.

Reinvest only where incrementality shows lift (holdout tests for CTV/social).

5 . Reinvest and cut

Shift 10–15% of the plan to a monthly “move fund.”

Kill anything that fails two cycles in a row.

Keep email/CRM funded; most SMBs still see outsized returns here (cross-validates the baseline math). WebFX

Why flexibility beats fixed rules

Market signals move fast. IAB shows buyers revising the year mid-stream, not annually. IAB

Platform policies change. Meta now ties AI chatbot interactions to future ad targeting (rollout begins Dec-16-2025). Expect performance swings; hold more test budget. The Wall Street Journal

Forecasts conflict. Gartner’s 7.7% flatline and eMarketer’s variable spend paths both circulate. Anchor on your CAC, LTV and payback. Marketing Brew

Case study: Chili’s budget choices during a tight market

As fast-food prices climbed in 2024–25, Chili’s reframed its value story and leaned into social video and offers. 

The mix pulled Gen-Z attention and lifted US sales by ~15% in 2023, with momentum into 2025. 

Why it matters to SMBs. They spent where proof existed (social video + sharp offers), trimmed elsewhere and reported clear outcomes. The lesson: set a goal-based budget, then move dollars to channels that drive measurable visits and tickets. Company site: chilis.com

Conclusion

The average marketing budget for small business is not a limit. It is a launchpad, a platform that can lift even the smallest ideas into real markets.

When every dollar is placed with focus, it works like an investment, not an expense. Adjustments are not setbacks; they are recalculations, the same way a navigator corrects the course of a ship.

Courage matters more than size. A small business that spends with intent can outpace larger rivals who drift without direction. Giants may have scale, but discipline and vision often win the race.

Spend with focus. Adjust with care. Lead with courage. With the right budget choices, even the smallest firm can rise, compete and stand tall beside giants.

FAQ

Do seasonal trends change the average marketing budget for small businesses?

Yes. Many small businesses spend more during busy months like holidays or summer travel. They often cut back in slow seasons to protect cash flow but keep core channels running.

How does location affect the average marketing budget for small businesses?

Companies in large cities face higher ad competition and higher costs. Smaller towns or rural areas often need less spending to reach the same share of the audience.

Should small businesses separate online and offline budgets?

Yes. Tracking them apart makes ROI easier to measure. Many owners now assign more money to online channels because of better tracking and wider reach.

Do franchised small businesses spend differently on marketing than independent ones?

Franchise owners usually follow corporate rules and contribute to national ad funds. Independent owners decide budgets themselves, which gives more freedom but less shared support.

How do customer lifetime value (CLV) numbers impact marketing budgets?

When CLV is high, firms can spend more up front to win each customer. Businesses with lower CLV usually keep budgets tighter and focus on retention instead of costly acquisition.

Can small businesses pool budgets with partners or alliances?

Yes. Retail shops, tourism groups, or local services often share campaigns through co-op programs. This spreads costs and gives each business a wider reach than going solo.

Do certain payment models (subscription vs. one-time sales) change budget planning?

Yes. Subscription models like SaaS spend more at the start since revenue returns over time. One-time sales models often use leaner budgets to protect margins.

How do economic downturns affect average marketing budgets for small businesses?

In slow markets, most owners shift dollars toward low-cost, high-return channels. SEO, email and referral programs often rise, while paid ads get trimmed.

Are small businesses in highly regulated industries forced to budget differently?

Yes. Finance, healthcare and legal firms must follow strict ad rules. They often spend more on content, compliance reviews and reputation efforts instead of broad ad buys.

Should small businesses plan separate budgets for experimentation?

Yes. Many set aside 5–10% to test new platforms or ad formats. This way, they can try fresh ideas without hurting their proven marketing plan.