How Much Does Local Advertising Cost?

You'd Love a Straight Answer, Wouldn't You?


Common Question:  How Much Does Local Advertising Cost?

Complicated answer.  It depends.  OK.  Now tell us something we don’t already know!

Today on the Source Local Marketing Blog, let’s explore this common question and try to give a meaningful answer.

It Really Does Depend

Once you know what local advertising you want to buy, there are some common factors that really will affect how much local advertising costs:

  • How much you’ll buy at one time (quantity)
  • How long you’ll commit to it (duration)
  • How flexible your strategy allows you to be (flexibility)
  • How you want to pay (terms)
  • Your Location (Rural vs Urban, & Overall Market Size)

But long before you get to those factors, let’s answer a question you may not have asked, but should:

How Much Should You Spend on Advertising Your Business?

Different types of businesses have different standards for how much to invest in marketing on an ongoing basis.  And considering how much you spend advertising a new business to get it established then evolves into how much you should spend advertising a mature business to keep it growing and healthy.

In our experience, this is a very personal decision for any business owner based on:

  • Resources Available (Capital)
  • Your Risk Posture (Aggressive vs Conservative)
  • Total Available Market (TAM)
  • Competitive Posture (Environment)

These and a host of other factors can impact your strategy.  A recent study by Gartner showed that the average marketing budget as a percentage of revenue (across a wide range of business categories) was running right around 11% pre-pandemic, dropped to a low of 6.4% in the depth of COVID, and has so far rebounded to about 9.5% while it appears to be on it’s way back to pre-pandemic levels.

If you’re considering the question “How much does local advertising cost?” that can sometimes, no — OFTEN, be putting the cart before the horse.  We recommend you start with some more basic questions first.

How Much Our Clients Tend to Invest in Marketing

We serve clients across a wide range of business categories, and no two are doing exactly the same thing for the most part.

“We have clients who, depending on the category of business, invest between 3% and 25% of revenue into marketing efforts.  That percentage often relates heavily to the average ticket and gross margins of each business.”

Our average local client (single-location business) invests approximately $3,500 monthly on overall marketing, about a third of which goes toward digital basics — the minimum every business needs to be doing on-line to show up organically when people go looking — and the remaining two-thirds is often allocated toward outbound advertising designed to reach a defined target, or targets.

The broader range of what most local clients (single-location businesses) invest on a monthly recurring basis is between $2,800 and $8,700.  We have outliers on both ends of that spectrum.  Let’s try to help you determine how much you should spend on advertising…

Businesses that have more regional/national customer base, and B2B clients who are operating on a larger scale often invest far more than that.  Schedule time with us if you’d like to discuss comparative marketing budgets for your type of business at no cost or obligation to you.

Some Common Local Advertising Examples

If you’ve been looking for real life examples and finding that a frustrating proposition, the reason why is that many professional marketers are often reluctant to share specific local advertising examples because it’s sort of like a pharmacist offering a prescription when you have no diagnosis.  How much you should spend on advertising is as unique as you and your business.

We reviewed a cross-section of local clients (single-location businesses) and found several local advertising examples that are common for a lot of them:

Google Advertising.  For us this has historically meant search advertising.  But since early 2022 we’ve been converting many of our search campaigns to a relatively new offering from Google called Performance Max.  Our average customer spends $1,200/mo on Google advertising, but our largest customer budget is over $20,000/mo.

Search Re-Targeting Display Advertising.  Often we see small business customers battling it out in search advertising, without them realizing that searchers only click on the ads less than 10% of the time.  So continuing to advertise to searchers AFTER the search can be much more affordable and effective.  Our average customer using search re-targeting spends $1,800/mo, but the range is typically between $1,200 and $3,600/mo.

Location-Based Display Advertising.  This is also known as geo-fencing.  Often, when someone visits a specific location (such as one of your competitors) that’s a strong indicator they’re in-market for your product or service.  Other times, your best prospects tend to congregate somewhere and that makes it easier to find them; for example, perhaps you want to talk to moms who have kids in soccer — location-based display advertising targets the phones of adults who are at the soccer complex and continues to advertise to them.  This is also a very common tactic for our B2B clients when there are large conferences many of your best prospects attend.  Our average customer using geo-fencing spends $1,800/mo, but the range is typically between $1,200 and $3,600/mo.

Permissioned Outbound E-Mail.  This is NOT referring to your in-house e-mail list.  This is outbound e-mail targeting people who meet your targeting criteria.  For example, if your best customers tend to be:

      • Women
      • 35-64 Years Old
      • Within a 9-Mile Radius of Your Location
      • Drive an Imported Car
      • HH Income > $150,000
      • Home Value > $750,000

You can target people who meet those criteria for these other forms of advertising we’ve talked about, or you can simply send them e-mail.  This works for D2C (direct to consumer) businesses, and it’s even more effective for B2B (business to business) companies.  Our average customer using outbound e-mail spends $1,000/mo, but the range is typically between $1,000 and $3,000/mo.

Content Marketing.  This tactic often includes Search Engine Optimization, or SEO.  When people search for things on Google, over 25% end up clicking on the top organic result on the SERP (Search Engine Results Page).  In fact, the most-clicked items on any SERP tend to be the top 3 organic results on the list.  Not the ads, not even the map.  The organic search results.  Just ask yourself how you got to THIS page; probably that way…  Our average customer with an ongoing commitment to SEO and content marketing spends $1,575/mo, but the range is typically between $880 and $3,150/mo.

These are many of the most common examples.  If you’d like to talk about how much you should spend on advertising just schedule time with our team and get a free initial marketing consultation at no cost or further obligation to you.

How to Use This Information to Really Grow Your Business Meaningfully

This may be more information than you bargained for when you set out to get a straight answer to the question of how much local advertising costs, and it may feel a bit like drinking from a fire hose (we’re throwing a lot of info at you all at once here).

But one of the basic tenants of our company is to lead with education and provide a structure to the marketing function of your business.  Marketing has gotten a lot more complex.  We’re here to help you simplify it.

Please consider scheduling a free consultation with our team to talk specifically about the questions and challenges that drove you to think about this question.  We invest in you long before you invest in us.

If you’re not ready for that yet, maybe just sign up for our free local marketing e-mail newsletter so you can read more articles like this one.  And we’ll talk when you’re ready.

Thank you for visiting our Local Marketing Blog today!




Previous articleCase Study: How To Market Braces and Clear Aligners
Next article3 Reasons Marketing for Small Business Fails
After 3 decades as a professional marketer, serial entrepreneur and business consultant Steven Ludwig shares his best practices for small business marketing for owners, managers, and marketers with limited time, money, and expertise. Steven started his professional marketing career in broadcasting in the early ‘90s in Chicago after attending Valparaiso University. After a brief stint at an advertising agency specializing in entertainment and sports marketing where he worked with radio and television stations, movie theatre companies, record labels, musicians, and professional sports teams, he moved to Nashville to form The Marketing Group with his long-time business partner, Jim Wood. Having worked with some of the largest brands in the world, in 2010 he returned to local marketing primarily out of an interest and excitement for working with small business owners to build stronger companies. That desire comes out of early days in radio, where he worked closely with everything from car dealerships to restaurants, insurance and real estate agents, banks, home services companies, and specialty retailers of all kinds. Over the past decade, he has been on the bleeding edge of digital marketing technology, constantly seeking to understand complex strategies employed by giant corporations and then translate those capabilities into tactics small businesses can execute at a local level. Today, in addition to other business ventures with his wife and other long-time business partners, he still lives outside Nashville in Franklin, Tennessee and currently serves as Executive Chairman of EmpowerLocal, a digital marketing company building a nationwide network of digital, hyperlocal news and lifestyle publishers to provide efficient advertising opportunities for local, regional, and national brands.


Please enter your comment!
Please enter your name here