Marketing Spend by Trade and Revenue: What Contractors Actually Pay in 2026

Gartner’s 2025 CMO Spend Survey reports that marketing budgets across all industries have flatlined at 7.7% of company revenue, unchanged from 2024. That number gets quoted in every “how much should I spend on marketing” article on the internet. It’s also nearly useless for a contractor running a $1.4M plumbing shop in Phoenix.

The CMOs Gartner surveyed run B2B SaaS, enterprise retail, and Fortune 1000 brands. Their cost per lead is $50. Yours is $127.

Why SaaS benchmarks lie to contractors

The 7.7% number is real, but the context is wrong. Gartner surveyed 402 CMOs, most at companies with $1 billion or more in revenue. Their marketing dollar buys content distribution and brand campaigns. Your marketing dollar buys an LSA click at $52 and a Google Ads click at $9.68.

LocaliQ analyzed 3,211 home service campaigns in 2025 and found HVAC averages $9.68 CPC and $127.74 cost per lead. Plumbing is $10.49 CPC and $129.02 CPL. Roofing is even worse at $228.15 CPL.

The Deloitte/Duke CMO Survey puts marketing spend at 9.4% of revenue, up from 7.7% in 2024. That number is closer for contractors, but still pulled from a sample dominated by enterprises with bigger budgets and softer ROI requirements.

For home service contractors, the working range is 5-15% of revenue depending on trade, growth stage, and competition. The wide band exists because what a $500K solo plumber needs is fundamentally different from what a $5M HVAC company in a PE-rolled-up market needs.

What does $0-$1M revenue actually spend?

Contractors under $1M in revenue typically run 5-10% of top-line revenue through marketing. That’s $25K-$100K per year, or roughly $2K-$8K per month.

At this stage, your spend has to concentrate. Hook Agency’s contractor data and Digital Harvest’s sub-$1M HVAC benchmarks both land in this same range. Spreading $3K/month across Google Ads, Facebook, postcards, SEO, and review software leaves you with $500 in each bucket and nothing working.

One Reddit thread on r/sweatystartup tracked a solo HVAC operator at $720K revenue spending $4,200/month on marketing - roughly 7% of revenue. $2,800 went to Google Ads. $800 went to LSA. $400 went to a review automation tool. $200 went to truck wraps and the ROI math behind them and yard signs. Nothing else.

He closed at $185K in attributable revenue from paid channels, plus another $310K in referrals from jobs that started with a paid lead. That’s a 4.5:1 ROI on the trackable portion.

The mistake at this revenue band: trying to look like a $5M company. You don’t have the volume to justify a content marketer, a Facebook ads manager, AND an SEO agency. Pick two channels and execute. Run them for 90 days before judging.

Read our contractor marketing budget guide for a full breakdown by stage.

What does $1M-$3M revenue actually spend?

This is the band where most contractors get the percentage right and the allocation wrong. $1M-$3M shops typically run 8-12% of revenue, or $80K-$360K per year.

At $1.5M revenue and 10%, that’s $150K annual, or $12,500/month. The question is where it goes.

One plumbing company profiled on Owned and Operated grew from $1.2M to $2.8M in 18 months by reallocating from a $4K/month SEO retainer that produced 8 leads to a $9K/month LSA + Google Ads stack that produced 47 leads. Same total budget. Six times the lead volume because the channel matched the homeowner’s actual buying behavior.

This is the band where attribution starts mattering more than budget size. At $0-$1M, you can mostly tell what’s working because volume is low and patterns are visible. At $1M-$3M, leads come from five sources simultaneously, and “I think Google Ads is working” is not a strategy.

If you can’t tell which channel produced your last 20 booked jobs, you’re guessing. Read marketing attribution for home services before adding another dollar to any channel. For where to move the next $1K, see marketing spend optimization for home service contractors.

What does $3M+ revenue actually spend?

Above $3M, contractors split into two groups. The defensive operators stay at 5-7% because they have a strong referral base and they’re trying to protect margin. The growth operators push 10-15% because they’re competing with PE-backed roll-ups.

Digital Harvest’s contractor benchmarks place residential HVAC and plumbing operators at 8-12% of annual revenue, with highly competitive markets reaching 12-15%. At $5M revenue, that’s $400K-$750K per year, or $33K-$62K per month.

This is where dedicated headcount makes sense. A marketing coordinator at $55K/year, an outsourced agency at $4K-$8K/month, and ad spend layered on top.

A roofing company in Tampa profiled on the ACHR News in 2025 spent $612K on marketing against $5.1M revenue - 12% - and attributed $2.3M in booked work to that spend. A 3.75:1 ROI. The CEO’s quote in the piece: “We stopped trying to be cheap and started trying to be unavoidable.”

At this size, the question shifts from “how much” to “how fast can we redeploy.” Markets shift. Seasons shift. A monthly reallocation discipline beats a static annual budget.

What does the CMO Survey miss for trades?

The CMO Survey reports 9.4% of revenue. Gartner reports 7.7%. Both are correct for their sample. Neither describes a roofing company in Houston bidding against three PE-backed competitors.

Three things make contractor spend different.

Lead cost dominates allocation. When your CPL is $127 and your close rate is 30%, you need $423 in marketing to book one job. A SaaS company with a $50 CPL and a 5% close rate needs $1,000 per closed deal but has 80% gross margins. Your gross margin is 35%. The math is tighter.

Seasonality compresses spend windows. HVAC peaks in July and January. Roofing peaks after storms. Spending evenly across the year wastes dollars in shoulder months and underspends during peaks. The 7.7% average assumes a smooth quarterly distribution that doesn’t exist in trades.

Local competition sets the floor. When a PE-backed competitor in your zip code spends $30K/month on Google Ads, your 5% of revenue can’t reach the auction. The benchmark stops mattering when the local market demands a higher floor just to be visible.

Read home service marketing benchmarks for the trade-specific data.

How do you set the actual number?

Forget the percentage as the starting point. Start with the revenue goal.

Step 1: pick your revenue target for the next 12 months. Not last year’s revenue. The number you want to hit.

Step 2: divide by your average ticket. A $2M target at a $4,500 average ticket means you need 445 booked jobs.

Step 3: divide by your close rate. At a 30% close rate from paid leads, you need 1,483 leads.

Step 4: multiply by blended CPL. At a $90 blended CPL across LSA, Google Ads, and SEO, that’s $133,500 in marketing spend.

Step 5: add 15-20% for tools, tracking, and overhead. Final number lands around $156,000, or 7.8% of the $2M target.

Now you have a budget tied to the business outcome, not a benchmark pulled from a B2B SaaS survey.

One electrical contractor on ContractorTalk used this exact model to scale from $1.1M to $1.9M in a single year. Quote from the thread: “I stopped asking what the industry spends and started asking what I need to spend to hit my number. Marketing went from a line item I argued with to a calculator I trust.”

What ROI should you actually expect?

3:1 minimum. Every $1 in marketing should produce $3 in booked revenue. Under 2:1, fix the channel or cut it. Over 5:1, you’re probably underspending and leaving growth on the table.

LocaliQ’s 2025 data shows top-quartile home service campaigns hit 5:1 to 7:1. Bottom-quartile sit at 1.5:1 to 2:1. The gap isn’t channel selection. It’s tracking, follow-up speed, and close rate.

78% of customers go with the first contractor to respond. A campaign with a 3:1 ROI and a 4-hour average response time becomes a 5:1 campaign with a 5-minute response time. Same spend, same leads, better conversion.

Read speed to lead before scaling any channel.

Common spend mistakes

Confusing the SaaS 7.7% with your number. That benchmark is for $1B+ companies with different cost structures. Use it as context, not a target.

Setting the budget once a year. Markets shift quarterly. CPLs spike during peak season. A static annual budget locks you out of opportunities and overspends during slow months.

Tracking cost per lead but not cost per booked job. A $50 lead that converts at 5% costs $1,000 per booked job. A $150 lead that converts at 30% costs $500 per booked job. Read cost per lead vs cost per job to fix this.

Cutting spend during slow season. Your competitors cut too. CPCs drop. Auctions thin out. Slow-season spend is the cheapest demand you’ll find all year.

No attribution. If you can’t tell which channel produced which booked job, your budget conversations are guesses. The next dollar should go to whichever channel produced the best last 10 jobs - and you need to know that with data, not gut feel.

FAQ

What percentage of revenue should a contractor spend on marketing? Most home service contractors spend 5-12% of revenue. Sub-$1M shops typically land at 5-10%, $1M-$3M at 8-12%, and $3M+ growth operators at 10-15% in competitive metros.

Is the 7.7% CMO Survey number accurate for contractors? No. The 7.7% comes from Gartner’s 2025 CMO Spend Survey, sampled mostly from $1B+ enterprises. Home service contractors typically run higher because lead costs are higher and seasonality compresses spend windows.

What’s a good marketing ROI for contractors? Aim for 3:1 minimum. Under 2:1 means fix the channel or cut it. Top-quartile LocaliQ campaigns in 2025 hit 5:1 to 7:1.

How much should a $1M HVAC company spend? $50K-$120K per year, or roughly $4K-$10K per month. The exact number depends on close rate, average ticket, and local competition.

Should I budget off current revenue or revenue goals? Goals. Budgeting off current revenue keeps you at current revenue. Budget for the number you want to hit, not the number you already have.

The bottom line

The 7.7% benchmark is real, but it’s a SaaS number sitting in a trades search result. Contractors who grow spend more, allocate by trade economics, and track every dollar to a booked job.

Build the budget from the revenue goal backward. Track ROI by channel. Reallocate quarterly. Spend cheap in slow season. And stop comparing your $127 CPL to a B2B SaaS company’s $50 - your math is its own math.

Read marketing budget allocation for channel-by-channel breakdowns once your top-line number is set.