What's a good advertising budget for your small business?

The amount a small business should invest in online advertising depends on several factors, including your goals, industry, target audience, and overall marketing strategy. Here are a few considerations to help determine a reasonable budget:

Set Clear Goals

First, define what you want to achieve with your online advertising. Are you looking to:

• Increase brand awareness?

• Drive traffic to your website?

• Generate leads or sales?

  
  

Your goals will influence how much you need to spend.

For example, if you’re focused on brand awareness, you may spend more on broad-reach platforms like social media. If you're targeting direct sales, you might allocate more to performance-based ads like Google Ads or Facebook Ads.

Start Small, Test and Scale

For most small businesses, it’s recommended to start with a small budget and gradually increase it as you see results. A general starting point could be 5-10% of your monthly revenue. For example:

• If your business generates $10,000 a month, you might spend between $500 to $1,000 per month on online advertising.

Ad Platform Selection

The platform you choose will affect how much you spend. Here’s a rough idea of what you might need:

• Google Ads (Search & Display): Highly targeted but can be more expensive. The average small business might spend between $500 and $2,000 per month, depending on the keywords you're targeting.

• Facebook/Instagram Ads: These platforms can be cost-effective for small businesses. You could start with $10–$50/day and scale up as you see positive results. This would equal around $300-1500/month to start.

• LinkedIn Ads: Usually more expensive due to the professional targeting but can work well for B2B. Starting with $900/month is common.

• TikTok Ads: Rising in popularity and could be effective if your target audience is younger. Budgets can start around $500/month for small businesses.

Let’s say you're running an online store that makes $10,000/month. Your advertising budget could look like this:

• Google Ads: $500/month to target high-intent search queries.

• Facebook/Instagram Ads: $300/month for engaging potential customers through social media.

• Retargeting Campaigns: $200/month to retarget website visitors who didn’t convert.

Total: $1,000/month, or 10% of monthly revenue.

There’s no one-size-fits-all answer, but starting with around 5-10% of your revenue is a good starting point. From there, measure, test, and adjust based on performance. The key is to find a balance where you’re spending enough to see results but not overextending your budget.

How Mar Digital Can Help:

Would you like help setting up a specific campaign or discussing potential platforms for your business?

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