5 Principles for an Effective Restaurant Marketing Budget

During the 2020 global pandemic, drive-through coffee chain Dutch Bros launched its first-ever digital loyalty program as part of a broader marketing strategy—and gained 1.4 million new members in just the first month. This highlights how hospitality brands that embrace a well-rounded restaurant marketing plan approach are far more likely to attract and retain customers in today’s competitive market. 

The big question is: how do you set a marketing budget that drives growth without overspending? The key is to invest wisely, testing and refining marketing strategies that address challenges like measuring ROI, balancing short-term promotions with long-term brand building, and ensuring consistency across various marketing channels. 

Nuphoriq mentions that, according to the U.S. Small Business Administration, if your restaurant brings in less than $5 million in annual sales, a good rule of thumb is to set aside about seven to eight percent of your revenue for marketing.  

In this article, we’ll share practical principles and tips on how to create, manage, and optimize your marketing budget for the restaurant industry.

Understanding the Importance of a Restaurant Marketing Budget 

Just as having a solid strategy is important, so is having a well-defined budget. Without one, it’s easy to waste restaurant marketing dollars on tactics that don’t deliver or miss out on opportunities that could bring in more customers. 

The benefits are huge: it provides a clear roadmap, helps you stay in control of spending, and ensures accountability across your team. A good budget also allows you to prioritize marketing efforts, adjusting resources to high-performing channels or emerging opportunities.  

Most importantly, it enables data-driven decisions, helping you track ROI and refine your strategies over time. This ensures that your marketing activities are driving long-term results, supporting sustainable growth, and fostering customer retention. 

5 Key Principles for Creating a Restaurant Marketing Budget 

When it comes to creating a budget, the goal is investing in what’s right for your business. To do this effectively, there are key principles that will guide your efforts in identifying your marketing goals, selecting the right popular restaurant marketing channels, and measuring the returns on your investment. 

Principle 1: Determine Your Marketing Goals and Objectives 

Using the SMART framework (Specific, Measurable, Achievable, Relevant, and Time-bound) is a great way to get started. This ensures your goals are clear and focused and gives you a solid direction for your marketing efforts. 

Some common restaurant marketing goals might include: 

• Increasing foot traffic: For example, you may want to bring more target audience into your restaurant during off-peak hours with targeted promotions. 
• Boosting online orders: A goal could be to increase delivery or takeout orders by a certain percentage over the next months through online ads or discounts. 
• Building brand awareness: Focus on getting your restaurant's name in front of more people—whether through social media, local sponsorships or partnerships, or hosting events that engage local customers. 

Principle 2: Calculate Your Marketing Budget Percentage  

Figuring out how much to allocate to your restaurant marketing plan is crucial. Here are some methods you can use to calculate the right budget percentage: 

1. Percentage of Sales: Industry guidelines suggest putting aside seven to eight percent of your gross revenue if your restaurant brings in less than $5 million in annual sales. Larger businesses tend to spend on marketing a little less, but this is a starting point for smaller, growing operations. 
2. Cost Per Acquisition (CPA): How much are you willing to spend to gain a new customer? For example, if the average customer spends $25, and you’re comfortable spending $5 to acquire them, you can base your restaurant marketing budget breakdown on that cost-per-acquisition model.  
3. Competitive Analysis: It’s helpful to examine what similar restaurants in your area or industry are spending. A restaurant marketing budget example can give you a sense of what’s typical in your market, helping you gain a competitive advantage by understanding industry trends and positioning your restaurant effectively. 

Principle 3: Allocate Your Budget Across Different Marketing Channels  

The key question is: To which marketing channels should I allocate my budget? The answer depends on your goals, how your current strategy is performing, and which channels resonate best with your target audience.  

Here are some effective conventional marketing methods and digital advertising channels for the restaurant industry: 

• Online Marketing: From paid advertising to search engine optimization (SEO), online marketing helps you attract customers who are actively searching for places to eat. It's an efficient way to reach potential guests who are already in the decision-making phase.
• Social Media: Platforms like Instagram, Facebook, and TikTok are powerful marketing tools for connecting with customers, building brand awareness, running marketing campaigns, promoting special offers, and understanding your target market better.
• Email Marketing: By collecting email addresses and sending out newsletters or promotions, you can keep existing customers engaged and encourage them to return for repeat visits or orders.
• Local Advertising: Traditional methods like flyers, posters, and local store marketing and publications can still be highly effective, especially in smaller or more localized areas.
• Public Relations: Building relationships with local media and food influencers is a great way to generate buzz and increase visibility for your restaurant. 

Principle 4: Track Your Marketing ROI  

Just as tracking restaurants' spend is important to understand how your business is performing, it's equally crucial to track key marketing metrics to see how your marketing strategy and budget are actually working in the real world. Some important elements to track include:  

• Website Traffic: Track how many people are visiting your site and what actions they’re taking. 
  • Tools: Google Analytics, SEMrush, and HubSpot
• Social Media Marketing and Engagement: Monitor the performance of your social media ads, likes, shares, comments, and overall engagement to see how well you’re connecting with your target audience. 
  • Tools: Facebook Insights, Instagram Analytics, and Sprout Social
• Backlinks: Measure how many backlinks you’re receiving from other sites, as these can improve your website’s SEO and drive more traffic. 
  • Tools: SEMrush, Ahrefs, and Google Search Console
• Leads: Track the number of new leads generated through your campaigns, such as form submissions, downloads, email opens, or sign-ups. 
  • Tools: HubSpot, Mailchimp, Google Forms, and OptinMonster
• Restaurant Sales: Monitor how your marketing efforts are translating into revenue to get a clear picture of your return on investment (ROI). 
  • Tools: POS systems or eCommerce tracking in Google Analytics 4
• Customer Acquisition Cost (CAC): Determine how much you’re spending to attract each new customer, helping you assess the effectiveness and efficiency of your marketing investment. 

Principle 5: Regularly Review and Adjust Your Budget  

Regularly reviewing your marketing budget and performance is essential for staying on track. It’s an ongoing process that requires attention and flexibility—being able to learn from what’s working, fix what’s not, and adjust as needed. 

The key to success in marketing budgeting is adaptability. Be willing and able to reallocate budget, pause spending, or evaluate a supplier/employee if performance isn’t as expected.

5 Restaurant Marketing Expenses to Consider 

The percentage you allocate to each of these areas depends on your restaurant's business objectives and strategy. Here are the five key marketing expenses you should consider: 

1. Digital Marketing Efforts

Digital marketing includes website development, Google Ads, SEO, social media advertising, email marketing platforms, and online ordering platforms. 

2. Traditional Marketing

This includes print ads, local advertising, menu printing, promotional materials, and direct mail campaigns aimed at reaching customers through more traditional, offline channels. 

3. Loyalty Programs and CRM

This covers the costs of loyalty program software, managing the program, rewards for customers, and expenses related to special events or promotions designed to engage and retain your customer base. 

4. Content Creation

Budgeting for video and photography production, as well as social media engagement, helps ensure your brand looks polished and engaging across platforms. 

5. Agency Fees (if applicable)

If you work with an external marketing or PR agency, influencer marketing, or consultants, this category covers their fees for strategy, creative work, and execution. 

4 Tips for Maximizing Your Restaurant Marketing Budget 

We’ve already touched on some key marketing tips—like setting clear goals, understanding your target audience, using social media, and blending in some traditional advertising. Here are four tactics to get the most out of your marketing investments:  

1. Leverage Free and Low-Cost Marketing Tactics

Social media campaigns, email marketing, and local partnerships are powerful tools that won’t break the bank.  

2. Focus on Customer Retention

Getting potential customers is important, but keeping the ones you already have is key. Use loyalty programs, personalized offers, and email marketing to make your regulars feel special and keep them coming back. 

3. Track Your Results and Optimize Your Spending

It’s crucial to know what’s working and what’s not. Use data to make informed decisions, try A/B testing, and adjust your approach to make every dollar work harder. 

4. Negotiate with Vendors and Suppliers

Look for ways to cut marketing costs and get more value from your partnerships. Ask for discounts or consider bundled services to stretch your budget further. 

Frequently Asked Questions About Restaurant Marketing Budgets

What is a typical marketing budget for a restaurant?

The average marketing budget for an established restaurant is typically three to six percent of total sales revenue. However, if you're just starting out, you may need to allocate a higher percentage until you have enough data to make decisions based on facts and campaign results, rather than purely what you hope will work. 

How do you calculate your marketing budget based on total revenue?

To calculate your marketing budget, you can use the percentage of sales method, which suggests allocating seven to eight percent of your restaurant’s total revenue for marketing if your sales are under $5 million annually.

What restaurant company has the largest marketing budget?

According to recent, publicly available statistics, McDonald's is one of the largest restaurant companies that spends a significant amount on marketing, followed by Burger King, Popeyes, and other restaurant chains.

What is Coca Cola's marketing budget?

Coca-Cola’s marketing budget is around $5 billion per year, with a significant portion allocated to the United States.

How much does McDonald’s spend on advertising?

In 2022, McDonald’s allocated almost $1.9 billion for advertising in the U.S. alone. 

The Bottom Line 

As a restaurant owner or manager, it’s crucial to regularly assess and adjust your marketing initiatives based on performance metrics and shifting market research. By following key principles like setting clear goals, tracking ROI, and optimizing budget allocation, you’ll stay on track and maximize the effectiveness of your marketing efforts. 

By continually learning from your data and tweaking your strategy, you’ll make sure your restaurant marketing budget is working harder for you, delivering lasting results.  

Taking a proactive, data-driven approach to your budget helps you make smarter decisions, invest in the right places, and build stronger connections with your customers—leading to a more profitable and sustainable restaurant. 

Ready to take your restaurant’s marketing to the next level? Book a demo with Paytronix today and discover how our solutions can help you drive growth and maximize your restaurant marketing budget! 

Want to boost guest engagement and refresh your loyalty program? Check out our Revamping Your Loyalty Program guide to get started!