How Much Should Small Businesses Spend on Marketing? Insights from Our DIYMarketers Survey

Small business owners are no strangers to tight budgets, especially when it comes to deciding how much to spend on marketing. In our recent DIYMarketers Tipping Point Small Business Survey, we asked hundreds of small business owners to share their biggest marketing challenges, goals, and—most importantly—how much they’re actually spending. The results offer valuable insights into what’s working, what’s not, and where entrepreneurs might want to allocate their marketing dollars to make the most impact.

The Big Picture: How Much Are Small Businesses Spending?

According to our survey, over 75% of small businesses spend between $500 and $3,000 on marketing each month​. 

That’s a broad range, but it reflects the reality of small business budgets: some are just getting started with a few hundred dollars, while others can afford to invest more consistently. This spending generally covers essentials like digital advertising, email marketing, and social media management, though some larger businesses use this budget to pay for consultants or part-time marketing support.

But get this: nearly 9 out of 10 small businesses have reduced their marketing budgets recently, as rising costs in other areas (like gas, groceries, and childcare) force owners to reassess their finances​. 

But does spending less mean these businesses are seeing less success? 

Surprisingly, 92% of respondents feel that their marketing is effective, despite budget cuts. 

This suggests that small business owners are getting savvier about how they allocate every dollar.

Breaking Down the Costs: Where the Marketing Dollars Go

1. Social Media:
Social media marketing emerged as the most popular area of investment. Nearly half of the respondents (47.76%) said social media is their primary source of new customers​. With organic reach becoming more elusive, many small businesses are putting ad dollars into platforms like Facebook, Instagram, and LinkedIn. Facebook is the top-performing platform for 31% of businesses surveyed, with Instagram and LinkedIn tied at 16% each​.

2. Digital Ads and Content Marketing:
Following social media, digital ads, email marketing, and content creation are other key areas where owners spend their marketing budgets. Only 6.63% rely on content marketing alone, highlighting the need to invest across multiple channels rather than putting all your budget into one basket​.

3. Referrals and Word of Mouth:
Interestingly, 22% of business owners still rely on referrals—meaning that old-school word-of-mouth marketing continues to hold its own against digital trends​. For these businesses, spending less on digital ads and focusing on customer experience can pay big dividends. For example, investing in loyalty programs, customer thank-you gifts, or networking events could drive more referrals without adding to ad spend.

How to Decide on Your Marketing Budget: The 5 Key Factors

Knowing how much others are spending is useful, but every business is unique. Here are five critical factors to consider when deciding your own marketing budget:

1. Revenue:
   Our survey found that most small businesses make between $5,000 and $20,000 per month, with those at the higher end able to spend more on marketing. A common rule of thumb is to invest about 5-10% of your monthly revenue on marketing. So, if your business pulls in $10,000 monthly, consider allocating at least $500 to $1,000 for marketing efforts.
2. Target Audience and Channels:
   Which platforms and channels does your ideal customer frequent? If your audience is on Instagram, you might allocate more of your budget there. For businesses that cater to an older demographic, referrals and email marketing could be more effective than spending heavily on TikTok or Snapchat ads.
3. Customer Acquisition Cost (CAC):
   Calculating your CAC helps you understand what each new customer costs to acquire through different marketing channels. Lower-cost channels—like organic social media, referrals, and email—tend to have a higher return on investment but might take longer to scale. Conversely, paid ads on social platforms or Google can bring in leads faster but may be costly.
4. Growth Stage:
   Are you a startup, or are you well-established? Startups might need to allocate more initially to build brand awareness, while established businesses can get by with a lower spend focused on retention and customer loyalty.
5. Competitor Spend:
   Take a peek at what your competitors are doing. Are they heavily active on LinkedIn or running frequent YouTube ads? Knowing their approach can give you a sense of how much you need to spend to remain competitive.

Budget-Friendly Tips from DIYMarketers Respondents

If your marketing budget is tight, don’t worry. Plenty of small business owners have found clever ways to make their marketing dollars stretch. Here’s what some of our survey respondents had to say:

1. Leverage Customer Feedback for Content Ideas:
   Several respondents mentioned the power of using customer feedback and testimonials as content. Repurposing positive reviews into social posts, blog articles, or video testimonials costs little and builds trust with potential customers.

   “When I turned positive customer reviews into social media posts, it helped us keep a steady flow of content without increasing our budget.” — Chris T.

2. Use Free or Low-Cost Tools to Increase Efficiency:
   Tools like Canva, MailChimp, and Buffer allow small business owners to handle their social media and email marketing without needing a full-time marketing team. Many respondents use automation to save time on repetitive tasks, freeing up time for strategy.

   “Canva and Buffer are my go-to tools. They let me create professional-looking designs and stay organized without spending a ton on marketing.” — Kelsey D.

3. Focus on Networking and Referrals:
   With 22% of respondents relying on word-of-mouth, networking events, and customer referrals are still some of the most cost-effective strategies. Offering referral discounts or hosting in-person events to build relationships can yield excellent returns for minimal cost.

   “Offering discounts for customer referrals has worked wonders. It’s a low-cost way to bring in new business through our existing customers.” — Ashley R.

4. Develop a Marketing Plan and Stick to It:
   One of the top goals for many respondents in 2025 is building a comprehensive marketing plan. Having a roadmap for the year helps avoid last-minute spending and ensures a steady stream of promotions across all channels.

“Creating a regular posting schedule on social media and our blog keeps us top-of-mind without the need to increase ad spend. It’s all about consistency.” — Tyler L.

5. DIY Marketing with Occasional Support from Consultants:
   While 25% of respondents handle all marketing themselves, many also hire consultants for specific projects or to create a strategy. This allows them to benefit from expert advice without the high cost of a full-time hire.

Is It Time to Increase or Decrease Your Budget?

With nearly 89% of businesses admitting they’ve had to cut back on marketing expenses, the question of whether to increase or decrease your budget comes down to performance​. 

When our survey asked small business owners how effective their current marketing efforts were, over 90% felt their strategies were working. That’s a high satisfaction rate, but it also raises the question: could more spending boost results even further?

If you’re achieving results within your current budget, maintaining it might make sense. But if you’re struggling to reach your audience or gain traction, it might be time to revisit your spending or reallocate funds to higher-performing channels.

Final Thoughts: What’s the Magic Number?

Ultimately, there’s no “magic number” that suits every small business. But one thing’s clear: a strategic approach to budgeting—based on revenue, target audience, and competitor behavior—will yield better results than simply throwing money at multiple channels. Remember, effective marketing doesn’t always mean a big spend. Even small budgets can create significant impact with the right tactics and a bit of creativity.

The bottom line? If you’re looking to succeed in 2025, consider our respondents’ insights: focus on building connections, automate where you can, and double down on the channels that drive results for your business. With the right mix of strategy, patience, and a little bit of data-driven decision-making, any small business can turn even a modest marketing budget into measurable growth.