How Much Should Retailers Spend on Facebook and Instagram Ads?
One of the most common questions we get at Omni Digital Group is:
“How much should I be spending on ads?”
It’s a great question — and today, we’re breaking it down specifically for retailers running Meta ads (Facebook and Instagram) in their local markets.
How Much Should You Spend on Ads?
Let’s start with this: your ad budget depends on your business age and growth goals.
For Newer Retailers (1–2 years old)
If you’re a new business or still building brand awareness, you should be spending around 10% of your total revenue on marketing.
Not all of that has to go to Meta ads, but half of it should — meaning roughly 5% of total revenue should be dedicated to Facebook and Instagram campaigns.
50% of your total marketing budget should go towards Meta (Facebook and Instagram)
For Established Retailers (5+ years)
If your business is well-known in your area — maybe you’ve been around for 10, 20, or even 40 years — your minimum should be 4–6% of total revenue on marketing.
That means if you make $1 million a year, you should be investing at least $40,000–$60,000 into marketing annually.
Pro Tip: Even as an established retailer, if you bump that to 10%, you’ll see significant growth because your awareness and customer base already exist.
The Biggest Mistake Most Retailers Make
Too many retailers are only spending 1–2% of revenue on marketing — and then they wonder why growth feels slow or stagnant. Your ad spend has to match your growth goals.
If you only want to grow by 5–8% a year, fine — stay small on ad spend. But if your goal is to grow 20–25%+, you simply can’t do it without spending more.
The higher the ad spend (well spent) the higher growth you will experience. It’ just math
Understanding Return on Ad Spend (ROAS)
Every advertising platform runs on one key metric:
Return on Ad Spend (ROAS) — how much you make back for every dollar you spend.
What’s a Good ROAS for Retail?
Your target should be 5x–10x.
That means for every $1 you spend, you should be bringing in $5–$10 in revenue.
Let’s break this down with examples.
Example 1: Spending 1% of Revenue
If you’re doing $1 million in annual sales and only spend 1% ($10,000) on ads:
A 5x ROAS gives you $50,000 in new revenue.
That’s just 5% growth — barely noticeable.
Example 2: Spending 5% of Revenue
Now let’s take that same million-dollar business and spend 5% ($50,000) instead:
A 5x ROAS would give you $250,000 in new revenue
That’s 25% growth — a big difference.
💬 The takeaway: You have to spend enough to actually create meaningful growth.
The “Growth Comfort Zone”
Yes — it can feel scary to increase ad spend. If you’re currently at 1–2% and jump to 5%, that’s doubling or tripling your marketing expense.
But the retailers we see growing month over month are the ones spending in that 5–7% range — consistently.
That spend level fuels more reach, better creative testing, and stronger audience targeting.
Recap: How Much Should Retailers Spend on Ads?
Final Thoughts: Spend Enough to Grow
If you’re running ads but not seeing growth, it’s usually not a creative problem — it’s a budget problem.
You have to spend enough to make the math work. A 5x–10x ROAS means you’re literally multiplying every dollar — but you only get there by giving the platform enough fuel to learn and optimize.
The bottom line: Stop guessing at your ad budget. Spend enough to hit your growth goals — and track your ROAS closely.
If you want help figuring out your ad budget or want us to review your current Meta strategy, reach out to the team at Omni Digital Group.
We’ll help you see exactly where to spend and how to track every dollar.