Insights From Our Experts

There’s no way around it: paid digital advertising is going to have some level of priority in your annual marketing budget. But how much should you spend, exactly? And how on earth do you crunch the numbers on that kind of cash when ad costs are always changing? 

An effective, realistic paid digital advertising budget will depend on industry benchmarks and trends as well as your brand’s unique goals — putting you in the perfect position to predict how the year ahead will play out. 

If you’re in the mood to maximize advertising ROI, Liger can match your mood with an in-depth rollout of industry trends in paid advertising, the typical expenses you’ll run into, and, of course, meaningful strategies for creating a smart, sustainable budget that doesn’t skimp on conversions and results.

The Trends and The Truth 

For starters, U.S. digital ad spend is projected to grow by 7.5% in 2025, taking overall spend to an all time high of $315 billion. “Oh no,” you’re probably thinking. “We’re definitely going to need a bigger budget if we want to keep up with competition, right?”

Our answer to that question is both yes and no. You likely will want to spend more than you did in 2024, for example, but you want to spend wisely. Overall marketing budgets have actually declined since 2023, and only 5-15% of a business’s total revenue is typically assigned to marketing. This percentage can fluctuate based on your industry or your desire to bring in revenue. More growth will require more spend, pushing you closer to that 15%. Meanwhile, healthcare, retail, and e-commerce brands tend to be those with the largest marketing budgets.

As for paid ad campaign spend specifically, you can expect to dedicate anywhere from 10-90% of your marketing budget to the cause. Why such a wide range? Business objectives will vary across industries and even across individual campaigns, meaning it’s up to you to determine how valuable paid digital advertising will be for your brand.  

Budgeting Like a Rockstar (In 4 Simple Steps)

Once you’ve determined how much you want to spend and how flexible you can be, your marketing budget can take form. However, there’s still some trial and error at play. Here’s the approach we recommend:  

Assess Where You Stand

How well do you understand the effectiveness of your marketing efforts? Without tracking your campaigns, you can’t really know. By watching how your ad spend is performing and analyzing your advertising ROI, you can identify areas for improvement and trim or increase your budget as needed. Use a template. Use a spreadsheet. Whatever you do, just keep tracking if you want to keep ROI numbers in the green. 

Go Channel to Channel

In addition to figuring out which channels perform best for you, you’ll want to understand the strengths that each one has to offer. For instance, paid search ads (e.g., Google Ads) are known to deliver a high ROI as they tend to capture “high intent” leads, while programmatic ads are going to be more suited to boosting brand awareness, increasing audience reach, and giving you the opportunity to retarget. You also have video ads, paid social, and native ads to consider. Keep in mind that channels that deliver the best ROI will typically require a greater chunk of your overall ad spend. 

Measuring your success for each paid digital advertising channel is another unique challenge. Conversion-focused channels, like paid ads, can use metrics like CPA (cost per acquisition) and ROAS (return on ad spend) whereas paid social, which is all about engagement, would draw your attention to click-through rates and impressions. 

Be Ready to Adjust and Justify

Start by creating a monthly or quarterly budget breakdown. This way you’re not stuck with a massive monetary commitment upfront, and you have wiggle room to adjust and test the paid digital advertising strategies you like best. Consistent tracking and a willingness to revisit and reassess how things are going will be crucial as well. After all, leadership will want to see numbers and KPIs that show how your paid media decisions are supporting the business and bringing in revenue. You made the budget — be ready to back it up! 

Keep an Eye on Trends

What’s hot in the world of paid digital advertising? You may not want to jump on the AI bandwagon or start searching for the perfect social media influencer just yet, but new technologies and techniques are emerging all the time, and being open and aware could bring some pleasant and productive surprises to your marketing team. 

Talk to The Paid Digital Advertising Pros 

Not feeling confident enough to put together a marketing budget on your own? Whether it’s paid ads specifically or your marketing plan more generally, Liger’s experts can help you drive advertising ROI and help you reach the right audience at exactly the right time. Contact us today for creative, data-backed solutions to your digital marketing blues.