How much should I spend on Marketing?
If you run a small or medium sized business in Canada, chances are you've asked yourself at some point: "What should my marketing budget actually be?" You're not alone. Many organizations operate without a clear number or benchmark, especially when resources are tight or marketing feels like a moving target.
Whether you're just starting out or looking to grow, understanding what others spend and why can help you make smarter, more confident decisions. We've pulled together the latest Canadian specific data to help you get clarity on where to start.
Marketing Budget Benchmarks by Business Size
| Business Size | Annual Revenue | Recommended Marketing Budget (% of Revenue) |
|---|---|---|
| Small | Under $500,000 | 5% to 10% (higher if growth focused) |
| Medium | Over $500,000 | 5% to 10% (typically 7 to 8% on average) |
Source: Canadian Chamber of Commerce and other national research findings
Sample Budget Example
To make things more concrete, let’s say you run a business with $500,000 in annual revenue and choose to allocate 8% of that to marketing. That gives you a total budget of $40,000 per year. We'll walk through how that might be allocated below.
Key Considerations
- Growth Stage Matters: Startups or aggressively growing businesses often invest closer to 10% of their revenue in marketing.
- B2B vs B2C: B2B businesses can often succeed with 2 to 5% of revenue, while B2C businesses generally need 5 to 10% or more due to broader reach and competition.
- Tailor to Your Industry: Consumer facing brands, retail, and hospitality often spend more; industrial or referral driven businesses may need less.
Typical Marketing Budget Breakdown
Once you've set a marketing budget, the next step is deciding how to spend it. Here's a common allocation breakdown used by small and medium businesses in Canada, based on a $40,000 annual marketing budget:
| Category | Percentage | Amount ($) |
|---|---|---|
| Digital Advertising (Google Ads, Meta) | 30% | $12,000 |
| Content Creation (video, blog, photography) | 20% | $8,000 |
| Website and SEO | 15% | $6,000 |
| Email Marketing and CRM Tools | 10% | $4,000 |
| Social Media Management | 10% | $4,000 |
| Traditional Advertising (print, radio) | 7.5% | $3,000 |
| Market Research and Strategy | 7.5% | $3,000 |
This balanced approach supports visibility, brand growth, and client retention across both digital and traditional channels.
- Businesses with fewer than 20 employees in Canada typically spend around $30,000 per year on marketing.
- Companies with 50 or more employees often allocate $100,000 or more per year.
- For a $250K business, that may mean budgeting around $15,000 to $25,000 per year.
- For a $2M business, expect a typical budget between $60,000 to $150,000 per year.
These figures reflect not just digital ads or social media, but your full marketing ecosystem including branding, content, SEO, and client acquisition efforts.
Final Thoughts
There's no perfect number, but for most Canadian small and medium businesses, allocating 5 to 10% of revenue to marketing is a smart place to start. Adjust up if you’re looking to grow quickly, or refine down if you’re maintaining steady operations.
Need help making the most of your budget? We’re happy to chat about how to turn dollars into results.
Sources
- Canadian Chamber of Commerce
- Gartner CMO Survey (2024)
- BDC article on marketing budgets