How Much Should a Small Business Spend on Digital Marketing?

Let’s face it: budgeting for marketing can feel like a shot in the dark, especially when it comes to digital marketing. As a small business owner, you’re likely balancing a tight budget and a long to-do list. So, how do you figure out how much to spend without overextending yourself—or underspending and missing out on growth?

The good news is that digital marketing isn’t one-size-fits-all. The right budget depends on your goals, industry, and resources. But don’t worry—I’ll walk you through everything you need to know to set a realistic and effective budget for your business.

The Golden Rule of Marketing Budgets

A general rule of thumb is that businesses should allocate 7–10% of their gross revenue to marketing. For small businesses, this number may feel steep—but here’s the key: digital marketing lets you stretch your dollars farther than traditional methods.

For example:

• A small investment in social media ads can drive immediate traffic to your website.

• SEO improvements pay off over time, helping you rank higher on Google without ongoing ad spend.

• Email marketing campaigns deliver exceptional ROI (up to $36 for every $1 spent!).

So, while the percentage may seem high, digital marketing can help you maximize every penny.

Factors That Influence Your Digital Marketing Budget

When determining your budget, consider these key factors:

1. Your Business Goals

Are you trying to build brand awareness, drive foot traffic, or increase online sales? Your goals will influence how much you need to spend and where you should allocate your budget.

• For Awareness: Focus on social media ads and content marketing.

• For Traffic: Invest in SEO and Google Ads.

• For Sales: Combine retargeting ads with email campaigns.

2. Your Industry and Competition

Some industries require more aggressive marketing to stand out. For example, a local coffee shop might only need a modest ad spend to attract customers. But if you’re in a competitive niche like real estate or legal services, you’ll likely need to invest more to stay visible.

3. The Platforms You Use

Not all digital marketing channels cost the same. Here’s a quick breakdown:

• SEO: A long-term investment with gradual results. Great for businesses with limited budgets.

• Social Media Ads: Budget-friendly and perfect for small-scale campaigns.

• Google Ads: Effective but often more expensive due to keyword bidding.

• Email Marketing: Extremely cost-effective and great for nurturing leads.

4. Do-It-Yourself vs. Hiring Help

If you’re a one-person show, you might handle social media or email campaigns yourself, keeping costs low. However, outsourcing to experts (like MDRN Media!) ensures you get professional results and frees up your time to focus on your business.

How to Break Down Your Budget

Once you’ve determined your overall marketing spend, here’s how you might divvy it up:

• 40% for Paid Ads: Focus on Google Ads, Facebook, and Instagram for immediate results.

• 30% for SEO and Content: Build a long-term foundation with blog posts, website updates, and optimized keywords.

• 20% for Social Media: Grow your audience and engage with your community.

• 10% for Email Marketing: Retain existing customers and nurture leads.

Real-Life Budget Scenarios

Still unsure where to start? Here are a few hypothetical examples:

• Starting Small ($500/month):

  • Run targeted Facebook or Instagram ads.

  • Boost your local SEO with a few blog posts or updated website copy.

  • Use free tools like Google Business Profile to maintain visibility.

• Growing ($2,000/month):

  • Invest in Google Ads for high-traffic keywords.

  • Hire a professional to manage your SEO and social media.

  • Launch a monthly email newsletter.

• Scaling Big ($5,000+/month):

  • Add video marketing to your strategy.

  • Run retargeting campaigns for abandoned carts or missed leads.

  • Explore influencer partnerships or advanced analytics tools.

Why Investing in Digital Marketing is Worth It

Think of digital marketing as an investment in your business’s future. The money you spend today helps build an online presence that continues to generate leads, sales, and awareness for years to come.

Even if your budget is tight, starting small with digital marketing can deliver measurable results. And as your business grows, you can scale your efforts to see even bigger returns.

Need Help Building Your Digital Marketing Budget?

At MDRN Media, we specialize in crafting digital marketing strategies that fit your budget and goals—whether you’re starting with $500 or $5,000. We’ll help you make the most of your investment, so you can focus on what you do best: running your business.

Ready to grow your business smarter, not harder? Contact us today to create a budget that works for you!