How Much Should Contractors Spend on Marketing?
You probably set your marketing budget by feel.
They throw $500 at a lead site one month, nothing the next, then panic and dump $3,000 into ads when the phone goes quiet. No plan. No idea what a job actually costs to win. Just guessing.
Here is the thing nobody tells you. The number isn’t random. There’s real math behind it, and the businesses your size already spend more than you think. The problem isn’t that marketing costs too much. It’s that most contractors spend like it’s a bill instead of buying customers at a profit.
One contractor put the trap perfectly: “every morning I checked my phone hoping it would ring and most days it didn’t.” If your work is solid and your calendar is empty, that’s not a skill problem. It’s a money-in problem. So let’s nail down the money.
TL;DR: Companies with under $10M in revenue spend about 17% of revenue on marketing, and firms in the $10M to $25M band spend 21.5% (The CMO Survey, 2025). But construction allocates the lowest budget of any industry, just 1.5% (same source). Most contractors are way under where they should be. The smarter move is to stop picking a percent and start from what a job is worth. At about $91 per home-services lead (LocalIQ, 2025), an $8K job is cheap to win.
How much should contractors spend on marketing?
Start with a real number. The CMO Survey, run with Deloitte and Duke’s Fuqua School, found companies with under $10M in revenue put 17% of revenue into marketing, and firms doing $10M to $25M spend 21.5% (The CMO Survey, 2025).
That sounds high. It is, because smaller firms have to fight harder to get noticed. But here’s the honest read. That’s the ceiling, not a rule you have to hit. Most growing trades land somewhere between 5% and 10% of revenue when they start spending on purpose, then push higher as the math proves out.
Run it on your own numbers. Say you do $50K a month. That’s $600K a year. Five percent is $30K a year, or $2,500 a month. Ten percent is $5K a month. That’s the range to plan around, not a guess.
One warning. There is a fake stat floating around that “the SBA recommends spending 7 to 8% of revenue on marketing.” The SBA never said that. Their own page says there’s “no hard and fast answer.” So ignore anyone quoting a magic number like it’s gospel.
Why do most contractors spend almost nothing?
Because the whole trade barely markets. The CMO Survey found mining and construction allocate the lowest marketing budget of any sector, just 1.5% of the company budget (The CMO Survey, 2025). Dead last. Behind everyone.
Read that as good news. Your competition is asleep. While other industries fight tooth and nail for attention online, the guy down the road is still hoping word of mouth carries him. It won’t forever. Referrals dry up. Slow seasons hit.
That gap is your opening. You don’t need a huge budget to beat a contractor spending close to zero. You just need a plan and a little consistency. Most of your market is doing neither.
Not sure where the money does the most good? Here are 15 contractor marketing ideas ranked by ROI.
Stop thinking in percentages. Think in what a job is worth.
Here’s the better way to set a budget. A home-services lead from search ads costs about $90.92 on average, with a cost per click of $7.85, based on 3,211 US home-services campaigns (LocalIQ, 2025). Costs are up about 10.5% from last year, so they’re not getting cheaper.
Now do the math the way a real operator would. Say a lead costs you $91. Say you close 1 in 5 of them. That’s about $455 to land a customer. If that customer is an $8K bathroom remodel, you just bought an $8K job for $455. Why would you ever cap that?
That’s the shift. Marketing isn’t a cost you minimize. It’s a machine that turns dollars into jobs. Once you know what a job is worth and what it costs to get one, the budget answers itself. You spend as much as you can while the math still works.
The flip side. If the math doesn’t work, more spend won’t fix it. A cheap lead you never call back is still a lost job. Which is why where the money goes matters as much as how much.
The real bottleneck is usually pricing, not spend. Here’s how to price for profit, not revenue.
Where should the marketing money actually go?
Put it where buyers are, which is online. The CMO Survey found digital marketing spend grew 7.3% in a year while traditional advertising actually shrank 0.3% (The CMO Survey, 2025). The phone book and the newspaper ad are losing money, not making it.
And reviews aren’t optional. BrightLocal found 97% of consumers read online reviews for local businesses, and 81% use Google to do it (BrightLocal, 2024). Eight in ten people search for a local business at least once a week. If you’ve got no reviews and a weak profile, you’re invisible to most of your own town.
The way we think about it at Apex is the 3 Ms: Message, Marketing, and Method. Message is your website and the words on it. Marketing is the ads that buy calls. Method is the follow-up that catches leads before they ghost. Money split across all three beats money dumped into one. So a simple split for a trade just getting serious looks like this:
| Where it goes | Why |
|---|---|
| Paid ads (Google or Meta) | Buys calls today while the rest builds |
| Your website + landing page | The place the ad sends people to actually book |
| Reviews + Google profile | What buyers check before they call you |
| Follow-up system | Catches the leads you’d otherwise lose |
You don’t need all four perfect on day one. You need them not broken. A great ad pointed at a dead website is just lighting money on fire.
Reviews close jobs before you even pick up. Here’s how to get more 5-star reviews.
What does Google Ads cost for my trade?
Plan around real numbers, not hope. For home services, the average cost per click on search ads is $7.85 and the average cost per lead is $90.92 (LocalIQ, 2025). So a $2,000 monthly ad budget buys you roughly 22 leads, give or take.
Twenty-two leads. If you close a quarter of them, that’s five or six jobs a month from one channel. For a lot of trades, that pays for itself many times over. For others, the close rate or the job value changes the picture, so run your own numbers before you scale.
The channel matters too. Emergency trades like plumbing, electrical, and HVAC usually do best on Google search, where people are typing “burst pipe near me” right now. Project work like roofing and remodels often does well on Facebook and Instagram, where you can show off finished jobs. Pick the channel that fits how people buy your service.
Not sure which platform fits your trade? Here’s Google Ads vs Facebook Ads for contractors.
When should you spend more?
Spend more when the numbers tell you to, not when you feel like it. For reference, the broader Gartner 2025 CMO Spend Survey pegs average marketing budgets at 7.7% of revenue across all companies, down from 9.1% in 2023 (Gartner, 2025). Big companies are holding steady. You’re not a big company, so you’ve got room to move faster.
The rule is simple. If a channel is bringing in jobs at a cost you’re happy with, feed it. Pour more in while it works. If something’s been running two weeks and isn’t trending toward booked jobs, don’t “give it more time.” Restructure it. Two weeks is enough to see the shape of a thing.
Scale the winners, kill the losers, and keep the leads you do get from slipping away. That last part is where most of the wasted spend hides.
Getting leads but not booking them? Speed to lead is usually the leak.
FAQ
What percent of revenue should a contractor spend on marketing? Most growing trades land between 5% and 10% of revenue, with room to go higher as the math proves out. The CMO Survey shows firms under $10M average 17% (The CMO Survey, 2025), so there’s plenty of headroom. Ignore the fake “SBA says 7 to 8%” line. The SBA never said it.
Is $2,000 a month enough to market a contracting business? For one channel, often yes. At about $91 per lead, $2,000 buys roughly 22 home-services leads a month (LocalIQ, 2025). If you close a quarter of them and your jobs are worth a few thousand each, that pays back fast.
Should I spend on ads or my website first? Get the website and Google profile not-broken first, then run ads into them. An ad sending people to a dead page wastes the spend. With 97% of buyers reading reviews (BrightLocal, 2024), the basics have to be in place before you pay for traffic.
How long before marketing pays off? Give a new channel about two weeks to show its shape. If it’s trending toward booked jobs at a cost you like, scale it. If it’s not, fix it or kill it. Marketing that works keeps working. Marketing that doesn’t won’t suddenly turn around on month three.
This isn’t for everyone
Quick gut check before you spend a dollar. If you’re doing under $10K a month, paid ads will bleed you dry before they ever pay off. The job value isn’t there yet and the close math doesn’t work. Put your time into reviews, referrals, and a clean Google profile first. That’s free, and it builds the base.
This budget math is for the contractor already doing $10K to $100K a month who’s tired of guessing and wants the phone ringing on purpose. If that’s you, the numbers above are your starting line. If it’s not yet, no shame. Come back when the volume’s there.
The short version
The number isn’t a mystery. Businesses your size spend 15 to 20% of revenue on marketing, construction spends the least of any industry, and a home-services lead runs about $91. Start somewhere between 5% and 10% of revenue, point it at the right channel, keep the basics from leaking leads, and scale what works.
If you want a second set of eyes on your numbers, we run a free Growth Chat where we look at what you’re spending, what a job’s worth to you, and where the money’s actually leaking. No pitch, no pressure. Just the math.