The short answer
Digital marketing costs depend on your goals, your market and how fast you want to grow. Your spend splits into two parts: management, which pays for the people who plan, create and run campaigns, and media, the money paid directly to Google, Meta, LinkedIn or others to show your ads. A small local business can start with a modest monthly amount, while a national brand might spend thousands a day.
How to set your marketing budget
Gartner's 2025 survey of 402 marketing leaders in North America, the UK and Europe found budgets average 7.7% of company revenue, and half of CMOs report 6% or less[1]. Those are mostly larger companies. Small businesses and new brands trying to grow fast often spend a higher share at first, while established local businesses may spend less.
A simpler way to work it out
- Work out what a new customer is worth to you over a year or more.
- Decide how much of that you can afford to spend to win one customer.
- Multiply by the number of new customers you want each month.
- That's your starting media budget. Add management cost on top.
What ads actually cost
WordStream by LocaliQ studied more than 16,000 US Google Ads campaigns. In 2025 the average cost per click rose to about $5.26 to $5.42, up from $4.66 in 2024, and the average cost per lead was $70.11[2]. Costs vary widely by industry:
- Legal services had the highest cost per click, about $8.58; finance, insurance and home improvement were above $7[2].
- Arts, entertainment, travel and hospitality were cheapest, around $2 to $3 per click[2].
- Automotive repair converted best, about 14.67% of clicks becoming leads; finance and insurance converted lowest, about 2.55%[2].
Clicks are usually cheaper outside the US, UK, Canada and Australia, and social ads on Meta often cost less per click than search but bring people earlier in their decision. Look at cost per lead and per sale, not cost per click.
How agencies charge
- Monthly retainer: a fixed fee for an agreed scope of work. The most common model; easy to budget.
- Project fee: a one-time price for something with a clear end, like a website, an audit or a launch campaign.
- Percentage of ad spend: the fee rises with your budget. Common for large ad accounts.
- Hourly rate: good for advice or small tasks; harder to predict.
- Performance-based: paid per lead or sale. Rare and usually more expensive per result, because the agency carries the risk.
What makes digital marketing cost more or less
- Number of channels: one channel done well costs less than five done at once.
- Content needs: video shoots, photography and fresh ad creatives each week add cost.
- Competition: crowded industries like law, insurance and home services cost more per click.
- Location: targeting major US cities costs more than smaller markets.
- Speed: wanting results quickly means a bigger ad budget.
- Where your team is based: agency fees reflect local salaries, which is why many businesses work with teams abroad.
How to compare quotes
- Is ad spend included in the price, or separate? (It should be separate and paid directly to the platforms.)
- How many ads, posts, videos or pages are included each month?
- Who will actually do the work, and how senior are they?
- What does tracking and reporting include?
- What is the minimum contract length and notice period?
- Will you own all accounts, content and data?
Get a plan sized to your goals
Retales doesn't sell fixed packages. We size each plan to your goals and budget, and show exactly where management and media money goes. Retales is headquartered in New Delhi, India. Share your goals and we'll suggest a starting budget.
Sources
Every statistic in this article comes from one of these publications. Links open the original source in a new tab.
- 1Marketing budgets hold at 7.7% in 2025: Gartner CMO survey Average marketing budget is 7.7% of company revenue; paid media is about 30.6% of the budget. 402 leaders in North America, UK and Europe.
- 2Google Ads costs keep rising, but conversion rates improved in 2025 16,000+ US campaigns. Average cost per click about $5.26 to $5.42; average cost per lead $70.11.
This article is for general information and isn't financial or legal advice. Figures are as published by each source on the date shown.