SMB marketing budget by vertical · 2026 benchmark
What SMBs actually spend on marketing, by vertical and posture. Sourced from Borrell 2024 Local SMB Ad Spend Outlook, BLS QCEW industry classifications, and TNova client implementations.
The single most-asked question we get from SMB founders: how much should I be spending on marketing? The honest answer is "it depends" — but it depends on knowable things: vertical, growth posture, and what you're trying to buy with the spend. Here's what the data actually says.
Budget as % of revenue, by vertical
Per Borrell's 2024 Local SMB Ad Spend Outlook combined with US Census Annual Retail Trade and Services Survey data, the median SMB spends roughly 5–11% of gross revenue on marketing across all categories. The variation by vertical is wider than you'd expect.
| Vertical | Conservative | Expected | Aggressive growth |
|---|---|---|---|
| Home services | 5–7% | 8–10% | 12–14% |
| Dental / medical | 4–6% | 6–9% | 10–12% |
| Med-spa / aesthetic | 8–11% | 12–16% | 18–22% |
| Legal (consumer practice) | 7–9% | 10–13% | 14–18% |
| Restaurant (independent) | 2–3% | 3–5% | 6–8% |
| Retail (small specialty) | 4–6% | 7–10% | 11–14% |
Source: Borrell 2024 Local SMB Ad Spend Outlook + Census ART/Services 2024 + TNova clients 2025
Translation to monthly dollar figures
| Vertical | $1M revenue | $3M revenue | $8M revenue |
|---|---|---|---|
| Home services | $6,700/mo | $22,500/mo | $60,000/mo |
| Dental | $6,200/mo | $18,800/mo | $50,000/mo |
| Med-spa | $11,700/mo | $35,000/mo | $93,000/mo |
| Legal | $9,600/mo | $28,800/mo | $76,000/mo |
| Restaurant | $3,300/mo | $10,000/mo | $26,700/mo |
| Retail (small) | $7,100/mo | $21,300/mo | $56,700/mo |
Source: Derived from spend-percentages above × revenue band; 'Expected' column shown
Channel split inside that budget
Generic guidance "spend 60% on paid, 40% on organic" is unhelpful because it ignores vertical. Per audit data and Borrell's category breakdowns:
Source: TNova audits 2025 + Borrell 2024 category breakdown
Source: TNova audits 2025 + Borrell 2024 category breakdown
When to spend more than "expected"
New location or new service launch: add 30–50% to the budget for 90 days. The acquisition curve for a new market is front-loaded. Competitor compressing on you in your metro: add 20–30% for 60 days, primarily into Search Ads to defend share. Capacity opening up (new chair, new truck, new associate): add until the new capacity is filled.
Are these percentages all-in or just ad spend?
All-in. Ad spend + software + agency/contractor + creative + content production. About 55–70% of "expected" budgets in our data goes to ad spend; the rest is everything else.
What if my margin is below 10%?
Tight margins force "conservative" posture. The math: at 8% margin, spending 10% of revenue on marketing is the entire margin. Spend only what produces measurably more revenue than it costs.
Where does in-house marketing salary fit in?
If you have a full-time marketing employee, their fully-loaded cost is part of the marketing budget. A $70k/year marketing manager at a $1.5M business is ~$87k loaded — about 5.8% of revenue alone, which means the remaining ad/software budget needs to be 2–4% of revenue, not the full 8–10%.
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