How Much to Spend on Marketing for a Startup

How Much to Spend on Marketing for a Startup


The average amount of revenue allocated to marketing for startups is around 11%. Now, this figure can be higher, and it can be lower. 

It depends on what you’re trying to do, what kind of budget you’re working with, and many other factors. But globally, companies spend around $1 trillion a year in total.

Today, we’ll tackle this question and help break it down. Let’s get started.

How Much Should Your Business Spend on Marketing?

Eleventy billion dollars. Kidding. That’s not an actual number. But holler at Urban Monks if you’re making so much money that you are constantly adding new commas to your bank account. We’d like to invest.

Realistically, there’s no easy answer to this question. Every business is different, which means that there’s no one-size-fits-all solution when it comes to marketing budgets. However, we’ve come up with some tips to help you get started and stay on track.

Marketing Campaign Costs – The Usual Suspects


Now that we have an understanding of marketing budget developmentt, let’s look at some typical costs associated with marketing campaigns, starting with CAC.

What is CAC?

Yeah, we know. This stuff can be a bit of a snoozefest. But not every question has a sexy answer. This is one of them. Bear with me.

Customer acquisition cost (CAC) is the total amount of money a company spends to acquire new customers. This includes advertising, marketing, and any other costs associated with convincing a potential customer to make a purchase.

If a company’s CAC is higher than the average lifetime value of a customer, then they are losing money on each new customer they acquire. As a result, businesses must work to keep their CAC low to be profitable.

How to Calculate CAC

The most basic method is to take the total amount spent on marketing and divide it by the number of new customers acquired during that period.

For example, let’s say that a company spends $1,000 on marketing in a month and acquires ten new customers as a result. Their CAC would be $100.

This way is straightforward, but it doesn’t give the whole picture. Not all customers are created equal. Some may have more value than others, which you should consider when calculating CAC.

Pure CAC


Don’t worry. It’s not going to be that kind of party.

Full-loaded CAC (also known as pure CAC) is the total amount of money a company spends to acquire new customers, including the salaries of the sales and marketing team. This metric is important because it gives businesses a more accurate picture of their overall costs.

To calculate full-loaded CAC, simply take the total amount spent on marketing and add the salaries of the sales and marketing team. Then, divide this number by the number of new customers acquired. Boom. You’re Gucci.

Now Flip the Script – Blended CAC

Blended CAC is the total amount of money a company spends to earn new customers, including the salaries of the sales and marketing team, divided by the number of new customers acquired.

This metric is similar to full-loaded CAC, but it’s important to note that blended CAC does not include the cost of goods sold.

Maximize Your Marketing Budget

One of the biggest downfalls of startups is being a little too willy-nilly with revenue. Build a tight budget and keep it tight. Here are 15 tips to help you do just that.

1. Choose the Right Marketing Costs

Over-investing in marketing can lead to financial problems down the road, while under-investing can limit potential growth.

So how can you find a proper balance?

One way is to start small and gradually increase your investment as your business takes off. Starting small should keep you from taking on too much debt early on while allowing room to expand your marketing efforts as your customer base grows.

Focus your marketing budget on a few key channels that are most likely to reach your target audience. 

For example, investing in search engine optimization or pay-per-click advertising may be more effective if you sell products online than traditional print or television advertising.

2. Analytics Are Your Friend

Marketers love analytics. It’s seriously our favorite word. And we aren’t scared to talk about it at length. But I’ll try to keep this passage reasonable.

Analytics can help you track your return on investment (ROI) for each marketing campaign and adjust accordingly.

Additionally, analytics can help you identify opportunities for growth and expansion. For example, if you see that a particular marketing campaign is driving a lot of traffic to your website but few conversions, you may want to focus on improving your website’s conversion rate.

3. Assess Each Method Carefully

With the ever-changing marketing landscape, jumping on every new trend can be tempting. However, assessing each new marketing strategy is essential before investing in it carefully.

Consider your goals and objectives, and determine whether the new strategy is likely to help you achieve them. Research the costs associated with the new plan, and compare them to the potential benefits.

4. Network Your Face Off

Start by reaching out to your personal and professional contacts. Tell them about your company and what you do, and ask them to spread the word. If you have any industry connections, reach out to them as well.

You can also use your network to connect with potential customers and partners. Think about attending networking events, joining online forums and groups, and participating in community activities.

5. Update Your Budget Regularly

As your company evolves, so too should your marketing budget. What works right now may not be as effective tomorrow, and new opportunities may arise that you didn’t have before.

Make adjustments as needed. Consider bringing on a marketing consultant to help you assess your needs and develop a plan that fits your budget.

6. Consider Accelerating Your TTV

In the business world, time is money. The sooner you can get your product or service to market, the sooner you can start generating revenue.

That’s why it’s important to focus on accelerating your Time to Value (TTV). TTV is the amount of time it takes from when a customer expresses interest in your product or service to when they actually start using it.

7. It’s Ok to Use Virtual Credit Cards

If you’re looking for a better way to manage your marketing budget, consider using virtual credit cards. Virtual credit cards are single-use credit card numbers that you can use to make online purchases.

Virtual cards have several advantages. They can help you track and manage your spending. Second, they can help you keep your business and personal finances separate. And third, they can help you avoid fraud and identity theft.

8. Prepaid Cards Are Another Option

Prepaid expense cards are another way to manage your marketing budget better. Prepaid expense cards are like debit cards, but you can load them with a set amount of money that you can use for specific expenses.

Use these cards for a variety of marketing expenses, such as advertising, web hosting, and graphic design. And like virtual credit cards, they can help you track and manage your spending.

9. Keep Costs Under Control

As a startup, it’s important to be prudent with your spending. While marketing is essential for building awareness and generating leads, it’s also important to keep your costs under control.

Set a realistic budget for your marketing initiatives and focus on high-impact activities. Rather than spread your budget thin by pursuing many different marketing initiatives, hone in on a few that are likely to have the biggest impact.

10. Discard the Junk

If you find that certain marketing activities aren’t delivering the desired results, ditch them. 


Don’t waste time and money on something that isn’t working.

11. Quality Is Always Better Than Quantity


How Much to Spend on Marketing for a Startup

It’s better to have a small number of high-quality leads than a large number of low-quality leads.

To generate high-quality leads, focus on targeting your ideal customer with high-quality content. Doing so can ensure you reach the right people with your marketing messages.

12. Stay Updated

One way to stay up-to-date on marketing trends is to read marketing blogs. Some great marketing blogs offer valuable insights and tips. Urban Monks is hands down the best. Right?

You can also attend marketing conferences and events to network and learn about what’s hot in the streets.

13. Use Complementary Strategies

When putting together your marketing plan, choose strategies that complement one another. For example, if you’re using content marketing to attract leads, you can use email marketing to push those leads down the sales funnel.

By choosing complementary strategies, you can create a well-rounded marketing mix to help you achieve your goals.

14. Always Track Your ROI

There are a number of different ways to track your ROI. Google Analytics can help you track website traffic, conversion rates, and more.

Another way to track your ROI is to use a CRM system. A CRM system can help you track leads and customers throughout the sales process.

15. You Can Always Hire a Pro


Probably not him, though. I don’t think many startups can afford Tom. Unless you’re in the crypto space.

An agency can help you create and implement an effective marketing strategy.

It can also provide valuable insights and advice, helping you identify your target market and choose the right marketing mix.

How Marketers Allocate Budgets for Startups

Marketers usually allocate their startup budgets in the following ways:

  • content marketing: 25%
  • social media marketing: 20%
  • email marketing: 15%
  • paid advertising: 10%
  • PR: 5%
  • events and tradeshows: 5%
  • other: 20%

The Average Marketing Costs

So what’s in it for you? What are you and your business going to get out of this venture? The average marketing budget for a startup includes costs for:

  • content marketing
  • social media marketing
  • email marketing
  • paid advertising
  • PR
  • events and tradeshows
  • other marketing activities

Analyze Everything

There are several ways to measure your marketing spends. One way is to track your ROI. It will help you understand which activities generate the most leads and sales.

You can also measure success by looking at your conversion rates. It will show you how many leads convert into paying customers.


Align your marketing strategy with your business goals. Focus your marketing scheme on activities that will help you achieve your goals.

If you want to increase sales, your marketing strategy should focus on activities that generate leads and result in sales.

Want more brand awareness? Your marketing strategy should focus on activities that create brand exposure and reach new audiences.

Use the Right Tools

Several different marketing tools are available to help you achieve your goals. Some of the most popular marketing tools include:

Promote Your Content

Content marketing is the creation of high-quality content that attracts and retain customers by providing them with valuable information.

Popular types of content that fall into this strategy include blog posts, ebooks, infographics, and videos.

Best ROI in the Game: Email Marketing

Email marketing has the best ROI in marketing. It uses email to promote products or services. The goal of email marketing is to build relationships and generate leads. Every company should have a newsletter.

Social Media Marketing

Social media marketing uses social platforms to promote products or services. The purpose is to build relationships and generate leads.

Some of the most popular types of social media include:

  • Facebook
  • Twitter
  • LinkedIn
  • Instagram
  • Snapchat
  • Pinterest

Use Influencers

How Much to Spend on Marketing for a Startup


Influencer marketing leverages influencers to promote products or services. Some of the most popular influencers include bloggers, YouTubers, and famous social media personalities on Instagram, TikTok, and Twitter.


PPC advertising is a form of marketing that uses pay-per-click (PPC) to promote products or services. Facebook and Google are probably going to be your go-to for PPC ads.

You Need Big Data in Your Life

Big data is a term used to describe the large amount of data generated daily. Use it to improve marketing efforts by providing insights into customer behavior.

Some of the most popular types are web and social media analytics and transactional data.

Don’t Sleep on SEO

How Much to Spend on Marketing for a Startup


Search engine optimization is all about making your website more visible to search engines. The goal of SEO is to increase organic traffic and improve search engine rankings.

Build an Online Presence

An online presence is how a business presents itself online. It aims to attract and retain customers by providing them with information about the company. Examples include your website, store, and social media profiles.

You Need to Innovate

You’ll need to do this to help your company stay ahead of the competition and keep up with the latest trends. Think metaverse, AR, and VR. Consider letting customers pay with ETH or Bitcoin.

Calculate Your Marketing Budget

smart nerd

(source) – altered with Canva

The most common method is to use the percentage of sales method. It involves calculating your marketing budget as a percentage of your overall sales.

Be Picky

There are many factors to consider when choosing which types of marketing to invest in. Some of the most important factors include:

– Your target market

– Your budget

– Your objectives

– The results you want to achieve

Once you’ve considered these factors, you can start to narrow down your options and choose the types of marketing that will be most effective for your business.

Create a Dope Marketing Plan

Creating a marketing plan is an essential step in any business. A marketing plan helps you define your target market, set your goals, and choose the right marketing mix to reach your target market.

Set a Budget and Stick to It

Once you’ve created your marketing plan, setting a budget and tracking your results is important. Base your budget on marketing goals and the types of marketing you’re planning to invest in, and then constantly test and track the results.

Come Up With a Plan That Works for You

You don’t need a plan. You need the right plan for you and your company. It will help you define your target market, set your goals, and choose the right marketing mix to reach your target market.

Test All the Time

At Urban Monks, we love A/B testing. It’s a valuable tool that pays tons of dividends.

Before you launch your marketing campaign, test your ideas to help identify potential problems and manage your campaign.

Be Ready to Scale

Once you’ve launched your marketing campaign and it’s performing well, it’s time to scale up! Scaling up means increasing your budget and expanding your reach to more potential customers.

Take these tips and go forth with your startup. Work hard, pursue knowledge, and reach for the sky. You won’t be a startup forever. As we say in Latin, citius altius fortius – faster, higher, stronger.


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