There's no perfect formula for splitting a marketing budget, but there is a sensible way to think about it. Spend should cover three jobs: capturing people already looking, creating demand among people who aren't yet, and protecting the leads you already earn.
Capture existing demand first
Search ads, local SEO and your Google Business Profile reach people actively looking for what you offer. For most service businesses, this is where the first and most efficient budget goes.
Then create demand
Meta, YouTube, TikTok and display reach people before they search. It's slower to pay back but grows the pool of people who will eventually look for you by name.
Protect what you earn
Follow-up, email nurture, retargeting and reviews make every other pound or dollar work harder. They're often underfunded because they feel less exciting than new campaigns.
A starting framework
Treat this as a starting point to adjust with real data, not a rule.
- Majority of paid spend on high-intent search to begin with
- A meaningful test budget for one demand-creation channel
- A small, steady share for retargeting
- Time and tools for follow-up and reviews
- A reserve for testing new ideas
Rebalance on cost per customer
Review allocation monthly or quarterly using cost per customer and revenue by channel. Move budget towards what works, but give new channels enough time and spend to prove themselves.
Key takeaways
- →Fund high-intent channels first
- →Test one demand-creation channel properly
- →Don't underfund follow-up and retention
- →Rebalance on cost per customer
Common questions
What percentage of revenue should go on marketing?+
It varies widely by industry, margin and growth goals. We'd rather work back from your target cost per customer.
Should we spread budget across many channels?+
Usually not at first. Doing two or three channels well beats doing six poorly.
How long before we judge a channel?+
Search can show signs within weeks; demand-creation channels often need a few months.
