“How much should I spend on marketing?” is the question we hear most from new clients at MarketingDone4U, usually asked with a slight wince, because everyone suspects they’re either under-spending or wasting money and nobody’s ever told them which. Here’s a straight framework for working it out, with the reasoning shown, so you can sense-check your own numbers rather than take anyone’s word for it.
The 5 to 15% rule
The old agency rule of thumb says a healthy business puts 5 to 15% of revenue into marketing. It’s a starting point, not a law, but it’s a useful one:
- Around 5 to 7% if you’re established and mostly maintaining your position.
- 8 to 12% if you’re growing steadily and want to keep it that way.
- 12% and up if you’re early-stage, because you’re building visibility from zero and everything costs more when nobody knows you exist.
The edges of the rule are where it gets useful. If you’re spending under 5%, you’re almost certainly capping your own growth and handing easy ground to competitors who show up when you don’t. If you’re over 20% with nothing to show for it, the budget isn’t the problem. Something upstream is broken, and it’s usually targeting, the offer itself, or tracking so patchy you can’t see what’s working.
How to split the budget
For a typical small business spending on growth, a sensible split looks like this:
| Share | Where it goes | Why |
|---|---|---|
| 40 to 50% | Paid media (Google, Meta, LinkedIn ads) | Fastest lever, brings demand forward |
| 20 to 30% | Organic: SEO, content, social | Slower but compounds, and you own it |
| 10 to 20% | Website, design and creative | Everything else converts through this |
| Around 10% | Tools, tracking and contingency | You can’t improve what you can’t measure |
Treat it as a starting shape and let your own results bend it. A trades business winning most work through local search should lean harder into SEO and its Google Business Profile. An ecommerce brand often needs the paid side heavier while organic builds underneath.
Give paid ads enough to actually work
Here’s the mistake we see more than any other: a tiny ad budget spread thinly, run for six weeks, then cancelled as proof that “ads don’t work”.
Ad platforms learn from data. Give a campaign too little spend and it never collects enough of it to optimise, so you pay for the learning phase over and over without ever leaving it. In our experience, a few hundred pounds a month per platform is a realistic floor for Google or Meta ads to gather meaningful data, and LinkedIn costs considerably more per click again, which is why we mainly suggest it for high-value B2B work.
Two things to hold onto whatever you spend. First, ad spend is always separate from any management fee, whoever manages your ads, so compare like with like when weighing quotes. Our full breakdown of Google Ads pricing shows how the two halves fit together. Second, commit to a proper test window. A fortnight tells you almost nothing.
What about the agency fee?
The fee and the ad spend both go towards growth, but only one of them buys media. Here’s the realistic UK picture for the fee side:
- DIY: £0 in fees, but easily 15 to 25 hours of your week. Price those hours honestly.
- Freelancer: typically a few hundred to £1,500 a month, usually covering one channel.
- MarketingDone4U: fixed monthly plans from £49 a month (SEO Starter) up to £399 a month (Pro ecommerce), per service, published openly on our pricing page. Website plans include hosting and professional email, on a 12-month managed service.
- Mid-size agency: typically four figures a month upwards, with strategy layers and account management built into the price.
None of these is automatically right. The question is what you need covered, and whether the fee leaves enough budget for the media and the website behind it.
Don’t forget the website in the budget
Plenty of budgets fund the ads generously and starve the place those ads send people. That’s backwards. Every channel converts through your website, so it belongs in the plan as a line item, not an afterthought.
If you’re costing that side out, we’ve published honest numbers in how much does a website cost in the UK?, a separate guide to ecommerce website costs if you sell online, and a plain-English answer to how much SEO costs for the organic side. Each one covers a single service properly, which beats one vague blended number.
A simple sanity check
Once things are running, one calculation tells you whether the budget is working.
Add your monthly fees to your monthly ad spend. Divide by the leads generated. That’s your cost per lead. Now compare it with what a customer is actually worth to you over a year or two, not just the first invoice. If a customer is worth £2,000 and leads cost £40, spend more. If leads cost £600, stop and fix the leak (the offer, the targeting or the website) before another pound goes in.
Under-spending and overspending are both just symptoms of not knowing this number. Once you know it, the budget question mostly answers itself.
Frequently asked questions
What percentage of revenue should a small business spend on marketing?
A common rule of thumb is 5 to 15% of revenue: around 5 to 7% to maintain an established position, 8 to 12% for steady growth, and more for early-stage businesses building visibility from scratch. Treat it as a starting point and adjust based on your actual cost per lead.
How much should I budget for marketing when starting out?
Start with what you can sustain monthly for at least six months, because consistency beats bursts. Cover the essentials first: a website that converts, a Google Business Profile, and one paid or organic channel done properly. A modest budget applied every month outperforms a big one abandoned after a bad fortnight.
Is the agency fee included in my ad budget?
No, and be wary of anyone who blurs them. The management fee pays for the work; ad spend goes to Google or Meta and is always separate. When comparing quotes, ask for both numbers explicitly so you can see what portion of your total budget actually buys media.
How do I know if my marketing budget is working?
Track cost per lead: total monthly marketing cost divided by leads generated. Compare it against what a customer is worth over their lifetime, not just their first purchase. If lead cost is a small fraction of customer value, increase the budget. If it’s high, fix targeting, offer or website before spending more.
Can I do effective marketing on a small budget?
Yes, if you concentrate it. A Google Business Profile costs nothing and wins local work. A solid five-page website with clear calls to action converts the traffic you already get. One channel done consistently beats five done occasionally. Small budgets fail when they’re scattered, not because they’re small.
Want this done for you? See our paid media services, or compare every service and price in one place.
