How Much Should Retailers Spend on Facebook and Instagram Ads?
One of the most popular questions we get asked at Omni Digital Group is this:
“How much should I spend on ads?”
Or put another way: “What should my ad budget be?”
It’s a simple question, but the answer has layers. It’s not a one-size-fits-all number — it depends on your industry, your goals, and how serious you are about growth. Let’s walk through exactly how to think about ad spend so you can make the right call for your business.
What You’ll Learn in This Guide
How much retailers should spend on marketing overall
How to decide what percentage of revenue should go to ads
Why Facebook and Instagram (Meta) are still cost-effective for foot traffic
How your growth goals change your budget
A simple formula to run your own numbers
What most retailers are doing wrong (and how to avoid it)
Step 1: Know Your Industry Benchmark
The first place to start is the industry average. Most businesses spend between 4–10% of revenue on marketing.
For retailers specifically, we recommend 4–6% of total revenue.
That’s the baseline. It’s not about throwing a number against the wall. It’s about knowing where you stand compared to others in your space.
If you’re only putting 1–2% of your revenue into marketing year after year, you’re likely underinvesting — and that’s why you’re not seeing the growth you want.
Step 2: Decide Where to Spend It
Once you know what percentage of revenue should go to marketing, the next step is asking: where should you spend it?
At Omni, we recommend retailers put around 2% of total revenue into Facebook and Instagram ads.
Why? Because if your target audience is anywhere from 35 to 65+, they are on Facebook. Period. They’re scrolling, they’re shopping, they’re engaging. Instagram adds a second layer, but Facebook is where the real opportunity is.
And here’s the kicker — in most local markets, your competitors are not running ads here. That’s why we call it a wide-open market. You can own the digital space in your city simply because no one else is paying attention.
Step 3: Match Your Spend to Your Goals
This is the part that most businesses skip. You can’t just say, “I’ll spend 2% of revenue” without looking at your growth goals.
If your goal is modest growth (5-10%), you might be okay with 1–2% of revenue in marketing.
But if your goal is serious growth (15–25+%), you’re going to need to spend more — probably 6–10% of revenue.
Think about it this way: if you want to grab more market share, you have to invest more than you are right now. Growth doesn’t happen by accident — it happens because you fuel it.
Step 4: Factor in Timing and Consistency
Here’s something we see all the time: businesses that scale back during certain months and then increase spend in other months.
That’s fine, but let’s be real — if you’ve only been spending 2% of revenue every year for the past five years, and you cut back to half a percent during “slow” months, why would you expect the results to suddenly be better than before?
Consistency is what wins. Setting your budget once at the beginning of the year and sticking with it gives you a stronger foundation to measure results.
Step 5: Compare ROI Across Platforms
A lot of retailers are still spending money on TV, direct mail, newspapers, or radio. The problem? Those channels cost more today than ever before — and they deliver less attention than they used to.
Meanwhile, Facebook and Instagram ads are still cost-competitive and put you in front of the audience that actually matters: the people on their phones.
Think about your own habits. What do you do when a TV commercial or streaming ad comes on? You pull out your phone. That’s what your customers are doing too.
If you want their attention, you need to be on the screen they’re actually looking at — and that’s Facebook and Instagram.
Quick Budget Formula for Retailers
Here’s a simple way to put all of this together:
Annual revenue: $2,000,000
Recommended marketing spend (4–6%): $80,000–$120,000 (Annually)
Recommended Meta ads budget (2%): $40,000 (Annually)
If your growth goal is 25+% or higher, plan for 6–10% of revenue ($120,000–$200,000).
This is where many retailers underestimate what it really takes to grow.
Mini Case Study
I was just talking to a retailer doing over $10 million in sales. They only wanted to spend “a couple thousand dollars” per month on Facebook ads.
Here’s the reality: at that level, they’re never going to hit their growth goals. They should be spending at least $20,000 per month, minimum, if they want to actually move the needle.
We’ve seen this before. Another client of ours was stuck at $1 million in annual revenue. They were spending just 1% of revenue on ads. After shifting to 5% of revenue on Meta ads, they grew revenue by 75% in a single year.
That’s the difference between “dabbling” and actually investing at the right level.
Another retailer spent 2% of revenue in Facebook ads and was up 12% in a month
FAQ
Q: What if my competitors spend less?
That’s your advantage. Most local retailers underinvest in ads. That’s why you can get ahead simply by showing up where they’re not.
Q: Can I test with a small budget first?
Yes, but you need to know this: a tiny budget limits your reach and results. You won’t get enough data to see what’s working. Testing with too little spend is like dipping your toe in the water and expecting to swim across the pool.
Q: What if I only want slow, steady growth?
Then you can probably get away with spending 1–2% of revenue. But if you want to make a big jump, you’ve got to be ready to invest in the 6–10% range.
Key Takeaways
Most retailers should spend 4–6% of revenue on marketing
At least 2% of revenue should go to Facebook and Instagram ads
Match your budget to your growth goals — small growth = smaller spend, big growth = bigger spend
Be consistent with ad spend all year long
Meta ads deliver higher ROI than traditional channels — and your competitors likely aren’t using them yet
Next Step: Know Your Number
At the end of the day, it all comes down to this: what are your goals, and are you willing to invest enough to reach them?
If you’re ready to grow, we can help you figure out the exact ad spend that makes sense for your business.
👉 Schedule your free ad spend review with Omni Digital Group — and let’s run your numbers together.