While figuring out your advertising budget, you might also be curious about what other businesses spend and if you are in line. In reality advertising costs differ significantly based on your line of business, objectives, and platforms of choice. However, knowing the benchmarks and the factors influencing the costs will help you spend more wisely.
The latest industry reports show that most small businesses spend anywhere between $1,000 and $10,000 per month on advertising. This is quite a broad spectrum, and, depending on several factors that we will discuss in this guide, you will determine your exact spot within this range.
Grasping Budget Bands per Business Scale
Your advertising budget is supposed to increase in proportion to the growth of your business. Here is the typical amount different sized companies allocate to marketing:
Small Businesses (Less than $250K revenue)
Some new businesses start with a small monthly advertising budget of $300 up to $1,000 which allows them to test one or two platforms without overstretching. The U.S. Small Business Administration suggests putting aside 7 to 10% of the gross revenue for marketing in general.
Growing Businesses ($250K – $1M Revenue)
Most of the time when companies have proven there are some effective channels, the ad spend is typically between $1,000 and $5,000. At this stage, a company can go to multiple channels and invest in lower executing channels but with a higher cost per click, such as LinkedIn in case of B2B companies.
Established Businesses (Over $1M Revenue)
According to the data from Triple Whale 2025, larger small businesses usually allocate about 5-15% of their total revenue to marketing, where digital advertising is the major part of it, and normally they spend $5,000 to $10,000 or even more monthly.
Industry research demonstrates the typical small business marketing budget is about $78,000 yearly, or about $6,500 monthly. Although, this covers all marketing activities and not only the paid advertising.
Factors Influencing Your Cost Per Click (CPC)
Cost per click is a very important dimension in digital advertising. It shows you the exact amount that you will be charged for each click on your ad. In 2025, the average CPC differs greatly on each platform, with LinkedIn having the highest one at $5.58 per click, followed by Google Search at $2.69, Amazon at $0.91, and Twitter at just $0.38.
Nevertheless, the average platform rates are only a small part of the whole story. Many things can raise or lower your CPC significantly:
Keyword Competition
The higher the number of advertisers bidding on the same terms, the higher the price. Legal and insurance keywords on Google Search usually cost from $5 to as high as $50 per click, with some insurance terms as high as $16.54. However, retail and e-commerce typically experience CPCs of around $1 to $3.
Quality Score
To be paid less for each click, have good ad positions, and still keep your ads relevant is Google and other platform’s goal when they award a high Quality Score. The major factors taken into account for this score are the relevance of the ad, the experience of the landing page, and the predicted click-through rate.
Geographic Targeting
Setting your ads to be seen by people in large metropolitan cities will cost more than targeting people in smaller towns or rural areas. For instance, companies located in New York or Los Angeles generally pay 30-50% more than companies in less competitive markets.
Industry Verticals
Different industries have to face different costs. To illustrate, the average cost per click typical for various sectors according to the 2025 benchmarks from Business of Apps are as follows:
| Industry | Average CPC | Platform Note |
|---|---|---|
| Legal Services | $6.75 | Google Search |
| Finance | $3.77 | Facebook, higher on Google |
| Real Estate | $2-4 | Varies by platform |
| E-commerce | $1.16 | Cross-platform average |
| Travel | $1.15 | Competitive seasonal pricing |
| Food & Beverage | $1.25 | Visual platforms perform well |
Seasonality
At certain times of the year, like holidays or during special local events, prices go up. For example, Black Friday 2024 some advertisers share that the cost per click increases to 50-100%, especially in retail categories where big brands such as Temu and Shein raised the bids across the whole board.
Exploring Cost Per Acquisition (CPA)
Besides CPC which can tell how much each click costs, there is also cost per acquisition which reveals how much do you pay for an actual new customer. This metric is really important for the profit margin.
CPA Benchmarks Across Different Business Models
| Business Type | Cost Per Action | Action Type |
|---|---|---|
| E-commerce | $30-50 | Purchase |
| Subscription Services | $40-60 | New subscriber |
| Travel Apps | $5.50 install / $42.50 | Install / Subscription |
| Finance Apps | $5.00 install / $50.00 | Install / Subscription |
| Utility Apps | $3.00 install / $27.50 | Install / Subscription |
| Lead Generation (Average) | $70.11 | Qualified lead |
For lead generation campaigns, WordStream’s 2025 benchmarks show the average cost per lead across all industries at $70.11, reflecting a 5.13% increase from the previous year. Nevertheless, several industries are quite diverse compared to this average, with lead costs less than $50 in some sectors and running over $400 in others.
Platform-Specific Costs and What to Expect
Every advertising channel adjusts its prices differently, and thus typical costs are variable. Below is what the major platforms hold for you in 2025:
Google Ads
The power Google keeps as a search advertising company is unchallenged. Several ad formats are at your disposal each with their own pricing:
- Search Network: $2.69 average CPC (although competitive industries are paying much more)
- Display Network: $0.63 average CPC
- Google Shopping: $0.66 average CPC
- YouTube (CPV): $0.10-0.30 per view
The most successful small business campaigns on Google Ads usually have a $1,000 minimum monthly budget to enter a level where the results are visible and substantial. However, when profitable keywords are found, many businesses go for the 3,000-10,000 monthly mark.
Facebook and Instagram
Generally, Meta’s platforms have a lower cost per click than search advertising, although the visitors here are less likely to have the intention to purchase. The latest benchmarks reveal:
- Average CPC: $0.50 to $2.00 for most industries
- Finance sector: $3.77 per click
- Apparel: $0.45 per click
- CPM (cost per 1,000 impressions): $8-12 on average
It is not uncommon for small businesses to put their monthly budget between $500 and $2,000 initially on Meta platforms. As for the types of businesses, the visual aspect of these platforms is especially effective for consumer goods, restaurants, and lifestyle brands.
LinkedIn Ads
The delivery of professional and highly targeted audiences just right for your B2B corporates and at great prices is what LinkedIn can offer. The platform however has the highest CPCs among major networks ($5.58 average) but the targeting precision usually justifies the cost if you are targeting decision-makers.
A monthly budget of $2,000+ is generally what companies set aside for the running of effective LinkedIn campaigns, although a few start with a lower budget to glimpse the reaction of the audience.
Amazon Ads
Amazon advertising has become increasingly important for e-commerce businesses. The firm average CPC stands at roughly $0.98, which is influenced by the rising rivalry between third-party sellers.
Real-World Examples: What Different Industries Actually Spend
One way to get based on how this costs affect the industry is by looking at exact cases:
Local Service Business (Plumber, Electrician)
Plumbing business in a city of average size, would probably use $2,000-4,000 for Google Search ads monthly and the repair keywords would be the target.
Assuming the $8 is the average CPC for competitive service terms, they will get 250-500 clicks in the month. At 5% conversion, the number of leads will be 12-25. With a ratio of 1 out of 4 leads resulting in bookings, it means that the company is acquiring customers at the cost of $300-400.
E-commerce Store
For an online store selling retail goods for home, the monthly budget of $5,000 is divided as follows:
- Google Shopping: $2,000
- Facebook/Instagram ads: $2,500
- Remarketing: $500
Due to e-commerce having a very low average of the CPC, $1.16, they are likely to drive a lot of traffic. Their acquisition costs, if they continue to optimize properly, would not be less than $25 and not more than $75 depending on the average order value.
B2B SaaS Company
If a software company is targeting an enterprise client, its $8,000 monthly expenditure could be divided as follows:
- Google Search: $3,000
- LinkedIn: $4,000
- Retargeting: $1,000
Thanks to the high customer lifetime value, they can afford to spend on acquiring customers. Let’s say that they pay for a LinkedIn click $5.58 and manage to get 700 clicks monthly; even with 2% conversion rate from demo requests, the value of the deals will cover the costs as they can be worth thousands.
Looking Ahead: Trends Affecting Advertising Costs
There has been a steady upward pressure on advertising costs. In the last couple of years, some sectors have gone through a 50-100% rise in CPC, which is the result of the competition for digital ad space getting more intense. However, the rate of increase has moderated recently, with 2025 showing more stability than the volatile 2023-2024 period.
The use of artificial intelligence is changing the game. More and more, platforms are relying on AI not only for automated bidding but also for targeting, thus increasing efficiency while competing at the same time. Google Performance Max and Meta Advantage+ are products illustrating this automation trend.
Privacy-related changes keep on affecting the capability of tracking and targeting. Adapting to fewer third-party cookies and more privacy-oriented platforms is a situation that businesses are expected to handle.
Despite higher costs, digital advertising still stands out as the most measurable and adjustable marketing channel. The ability to track every single penny spent and to optimize instantaneously provides it with advantages that traditional advertising has never had.
