How to choose the right marketing budget for your company in Saudi Arabia? With figures and examples.
How much should your company spend on marketing in Saudi Arabia?
10,000 riyals per month? 30,000 riyals? 100,000 riyals?
The answer does not start with the price of the marketing package, but with the company's objective, customer value, profit margin, customer acquisition cost, conversion rate, and required growth volume.
A construction company that receives contracts worth hundreds of thousands cannot measure its budget in the same way that a restaurant or an online store measures its budget.
In this guide from RAM Orbit, we explain in numbers how to build a growth-linked marketing budget, how to allocate it, when to increase or decrease it, and how to know if the budget is actually generating a return.
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What is the marketing budget?
The marketing budget is the total investment that a company allocates to reaching customers, building demand, increasing sales and enhancing brand presence.
This may include:
* Marketing strategy.
* Marketing management.
* Social media account management.
Content creation.
* Filming and production.
* Google Ads.
* TikTok Ads.
* Snapchat Ads.
Meta Ads.
* Search engine optimization (SEO).
* Websites and landing pages.
* Influencers and partnerships.
* Tools for analysis and measurement.
* CRM and marketing automation.
Here, a distinction must be made between the total marketing budget and the advertising budget.
The advertising budget is part of the marketing investment, not the entire investment.
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How much should your company allocate to marketing?
The traditional method starts with a percentage of the revenue.
But the most accurate approach starts with the economics of activity.
There are 6 numbers you should know:
1. Targeted revenues.
2. Number of customers required.
3. Average customer value.
4. Profit margin.
5. Conversion rate.
6. Acceptable customer acquisition cost.
After that, the budget becomes a calculable business decision instead of being a random number.
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The basic equation for a customer acquisition budget
You can start with this equation:
Number of target customers × Acceptable customer acquisition cost = Acquisition budget
example:
A company that wants to acquire:
30 new customers per month
And you can pay:
500 riyals to acquire a customer
the account:
30 x 500 = 15,000 riyals
Therefore, the required acquisition budget is:
15,000 riyals per month
Then, the costs of content, management, photography, SEO, and marketing structure are added according to the plan.
This method directly links the budget to the goal.
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Example of a company targeting 150,000 riyals in new sales
Let's assume the average customer value:
5,000 riyals
The goal:
150,000 riyals in new sales per month
Number of customers required:
150,000 ÷ 5,000 = 30 customers
If the customer acquisition cost is acceptable:
500 riyals
We need:
30 x 500 = 15,000 riyals
If the system requires:
5,000 riyals
For administration, content, and optimization, the total budget becomes:
20,000 riyals per month
Now we have a clear reason behind the number 20,000.
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What if the customer's value was 50,000 riyals?
Here the equation changes completely.
Let's assume a B2B company sells a service worth:
50,000 riyals
And you want:
4 new contracts per month
Target contract value:
200,000 riyals
If the company can afford it economically:
2,500 riyals to acquire the contract
The acquisition budget becomes:
4 x 2,500 = 10,000 riyals
This explains why the cost to a customer cannot be compared between two different activities.
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The cost of a lead is not the customer's cost.
Let's assume a campaign spent:
10,000 riyals
And it achieved:
100 Lead
Cost of a Lead:
100 riyals
But if only 10 people buy, the cost of acquiring the customer is:
10,000 ÷ 10 = 1,000 riyals
Herein lies the difference between:
CPL = 100 Riyals
and:
CAC = 1,000 Riyals
Therefore, it is not enough for the marketing company to simply say:
We reduced the cost of lead.
The most important question:
How many leads converted into customers?
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How do you determine the maximum cost of acquiring a customer?
Start with the customer's economics.
Let's assume:
Transaction value:
10,000 riyals
Gross profit margin:
4,000 riyals
If the company decides to allocate:
800 riyals
To acquire a client, she knows in advance the limit she wants to work around.
If the cost of acquisition starts to rise to levels that make the economics of selling unsuitable, then the problem has become commercial and is not just a number on a billboard.
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How do you allocate a marketing budget of 10,000 riyals?
Example of a business that wants to build a presence and start acquiring customers:
Budget item
Management and content: 3,000 riyals
Google Ads 3,000 Riyals
Social Ads 2,000 Riyals
Production and filming: 1,000 riyals
Tests and improvements 1,000 riyals
Total 10,000 riyals
At this stage, the goal is not to spread everywhere.
The goal is to discover the channels and messages that are worth increasing investment in.
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How do you allocate a budget of 30,000 riyals?
Budget item
Strategy, management, and content: 7,000 riyals
Google Ads 8,000 Riyals
TikTok / Snapchat / Meta 7,000 Riyals
SEO 3,000 Riyals
Filming and production costs 3,000 riyals
Tests and improvements 2,000 riyals
Total 30,000 riyals
Here, the company can work on more than one stage of the customer journey:
Discovery + Research + Conversion + Retargeting.
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How do you allocate a marketing budget of 50,000 riyals?
Budget item
Strategy, management, and content: 10,000 riyals
Google Ads 13,000 Riyals
Social Ads 12,000 Riyals
SEO and research content: 5,000 riyals
Filming and production costs 5,000 riyals
Retargeting 3,000 riyals
Analytics and tests for 2,000 riyals
Total 50,000 riyals
This is where the system begins to shift from separate campaigns to a multi-channel customer acquisition system.
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How do you allocate a budget of 100,000 riyals?
Budget item
Strategy, management and operation of 15,000 riyals
Google Ads 25,000 Riyals
Social Paid Media 25,000 Riyals
Production, filming, and content: 12,000 riyals
SEO 8,000 Riyals
Influencers / Partnerships 5,000 Riyals
New channels and experiences 5,000 riyals
Analytics / CRM / Optimization 5,000
Total 100,000 riyals
At this stage, the question is no longer:
How do we spend 100,000?
but rather:
Which part of the 100,000 achieves the highest value, and where is the opportunity for expansion?
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How do you choose between Google, TikTok, and Snapchat?
The decision begins with the client's intention.
Appropriate when someone is already looking for the product or service.
like:
Marketing company in Saudi Arabia
Marketing company in Riyadh
Contracting company in Jeddah
SEO company in Saudi Arabia
There is a request here that needs to be fulfilled.
TikTok, Snapchat, and Instagram
These platforms play a powerful role in:
* The industry of attention.
* Reaching a new audience.
* Product presentation.
* Visual content.
* Building the brand.
* Retargeting.
Therefore, the journey might be:
TikTok → Google → Website → Retargeting → Contact → Sell
no:
Advertisement → Sale
only.
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Marketing budget for B2B companies in Saudi Arabia
In B2B, customer value is usually more important than the number of customers.
A company targeting contracts worth:
100,000 riyals
Her campaign shouldn't be measured in the same way that a store measures a purchase of 200 riyals.
example:
If a company spends:
20,000 riyals
And I got:
20 Lead Qualified
Then two deals were converted from it, with a value of:
100,000 riyals per transaction
The resulting revenue:
200,000 riyals
Here, profitability and costs must be studied to determine the true return.
In B2B:
The quality of the lead is more important than the number of leads.
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Marketing budget for contracting companies
In contracting, the project value can be high, so the campaign should not be evaluated based solely on the cost of the lead.
The following steps must be followed:
Lead
then:
Qualified Lead
then:
Visit / Inspection
then:
offer price
then:
a contract
If the campaign achieves 50 inquiries and none of them are suitable projects, the number doesn't mean much.
But if you achieve just 10 inquiries and generate a large contract, the campaign may be more valuable.
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Property marketing budget
The property needs a clear funnel:
Advertisement → Lead → Qualified Lead → Contact → Appointment → Visit → Booking → Sale
Therefore, the cost of each stage must be measured.
A low lead cost with unqualified customers may be worse than a higher cost for an audience with genuine ability and interest in purchasing.
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Restaurant marketing budget
The restaurant should not only consider the value of the first visit.
If a restaurant gains a new customer and that customer returns consistently, the value of that customer becomes higher.
Therefore, we should consider:
* Cost of acquiring a new customer.
* Average order value.
* Number of repeat visits.
Average customer value over time.
* Customer reinstatement cost.
This is where Customer Lifetime Value comes in.
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E-commerce store budget
The stores have a great capacity for measurement.
watch:
ROAS
Return on advertising expenditure.
CPA
The cost of the purchase process.
Conversion Rate
Percentage of visitors who make a purchase.
AOV
Average order value.
Repeat Purchase Rate
Percentage of customers who buy again.
LTV
The value of the customer throughout their relationship with the store.
example:
A store that spends:
50,000 riyals
And it achieves:
200,000 riyals in sales from the campaigns
ROAS:
4X
But this does not automatically mean that the net profit is 150,000 riyals.
Deduct:
* Cost of products.
Shipping.
Discounts.
Payment gateways.
* Operation.
* Returns.
Other marketing costs.
ROAS is not Profit.
This is one of the most important points that the shop owner must understand.
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When should the marketing budget increase?
Increasing the budget makes sense when several indicators appear together:
* Acceptable acquisition cost.
Good customer quality.
* Stable conversion rate.
* The sales team's ability to follow up.
* Unit economics are profitable.
* More space available in the market.
If you spend:
20,000 riyals
If stable and economically viable results are achieved, the next question is:
Can similar economies of scale be achieved at 30 or 40 thousand riyals?
And this is where the expansion begins.
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Why might the results change when the budget is increased?
This is an important point.
If a campaign achieves excellent results when:
10,000 riyals
This does not mean doubling spending to:
100,000 riyals
The results will be multiplied tenfold.
When expanding, it may:
The audience is expanding.
Competition is increasing.
* The frequency of the advertisement increases.
Access costs increase.
The conversion rate decreases.
Therefore, the budget is increased and the Marginal CAC is monitored, not just the historical average.
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When should the budget be reduced?
When data reveals that the problem cannot be solved simply by increasing spending.
for example:
* The cost of acquisition has become uneconomical.
Customer quality has declined.
The sales team is unable to follow up.
* The offer is weak.
* The page does not redirect visitors.
The measurement is incorrect.
The market has reached saturation in the channel.
Sometimes the right decision is:
Don't spend more. Fix the system first.
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Why do some companies fail to achieve results despite having large budgets?
Because marketing is not just media buying.
You can have an excellent advertisement, but:
* The offer is weak.
The website is slow.
* The landing page is unconvincing.
* Prices are not competitive.
The sales team is slow to respond.
The brand lacks sufficient credibility.
Poor customer experience.
Here, increased spending might simply mean:
Sending a larger number of customers to a poor experience.
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RAM Orbit model for building a marketing budget
When building a budget, we start with six questions:
1. What is the goal?
Sales? Leads? Bookings? Contracts? Expansion? Brand building?
2. What is the value of the client?
An acceptable acquisition cost cannot be determined without knowing the value of the customer.
3. How many clients do we need?
Convert the revenue target into the number of customers.
4. How much can be paid to acquire a client?
Determine the number that the economics of the activity allow.
5. How many leads do we need?
Use the conversion rate between Lead and Customer.
6. Where is the customer located?
Then Google, TikTok, Snapchat, Meta, SEO, content, and others are identified.
The budget comes after the strategy, not before it.
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Complete example: From goal to budget
A company that wants to achieve:
300,000 riyals in new sales per month
Average customer value:
10,000 riyals
Number of customers required:
30 clients
If the closing rate:
20%
The company needs:
150 Leads Qualified
because:
150 x 20% = 30 customers
If the cost of the lead is:
100 riyals
The customer generation budget then becomes:
15,000 riyals
If the company needs:
10,000 riyals
For content, management, SEO, and optimization, the budget becomes:
25,000 riyals per month
Now management can make a decision based on a clear Funnel:
25,000 Marketing → 150 Leads → 30 Clients → 300,000 Targeted Revenue
The actual results are then compared with these assumptions and the plan is adjusted.
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Quick marketing budget calculator
Use these steps:
Target revenue ÷ Average customer value = Number of customers required
then:
Number of customers required ÷ Closing rate = Number of leads required
then:
Number of Leads × Cost per Lead = Customer Generation Budget
example:
Sales target: 500,000 riyals
÷
Average transaction price: 25,000 riyals
=
20 clients
If the closing rate:
10%
We need:
200 Lead
If the cost of the lead is:
150 riyals
permission:
200 x 150 = 30,000 riyals
Customer generation budget:
30,000 riyals
These calculations give management a starting point that can be measured and improved upon.
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The 8 most common mistakes in marketing budgeting
1. Set the budget before setting the goal.
2. Imitating the competitor's budget
3. Measuring success by views only
4. Considering cheap leads as proof of success
5. Ignore the sales team's closing rate
6. Pumping the entire budget into one platform for no reason
7. Increased spending before proving the campaign's economics
8. Confusing revenues and profits
These mistakes can cause a company to spend more while imagining it is growing.
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Frequently Asked Questions
What should the marketing budget be for a company in Saudi Arabia?
It is determined based on growth objectives, customer value, profit margin, acquisition cost, and required channels. The percentage of revenue can be used as a point of comparison, but it does not replace calculating the economics of the business.
Is 10,000 riyals per month enough for marketing?
It may be sufficient for one activity and very limited for another. The decisive factor is market size, competition, services, and the desired outcome.
What is the difference between a marketing budget and an advertising budget?
The advertising budget is the money paid to advertising platforms, while the marketing budget may also include management, content, photography, SEO, websites, tools, and more.
How much should I allocate to Google ads?
Determine the order size, cost per click, conversion rate, and customer value, then calculate the budget you can run within an acceptable cost of acquisition.
When should I increase my advertising budget?
When the campaign proves its ability to achieve customers of suitable quality and cost, with the operational capacity to receive a larger volume.
Does a higher budget result in higher sales?
Not always. If the system is weak, increasing the budget may increase waste. Fix supply, measurement, and conversion first, then expand.
What is the most important indicator in marketing?
There is no single indicator for all activities, but indicators that are closest to sales and profitability are usually more important than indicators of visibility alone.
What is the difference between ROAS and ROI?
ROAS compares advertising revenue to advertising expenditure, while ROI takes a broader view of return compared to cost and investment.
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RAM Orbit
At RAM Orbit, we start with the business objectives before choosing the platform or budget.
We connect:
Strategy + Content + Advertising + Search + Data + Sales
So that the marketing budget becomes a decision that can be measured and improved.
Because the question is not:
How much can you afford to spend?
The most important question:
How much can you earn from every riyal you invest?
Summary
The right marketing budget for your company in Saudi Arabia doesn't start with a ready-made package.
Start with this equation:
Goal → Customer Value → Number of Customers → Conversion Rate → Cost of Acquisition → Budget → Measurement → Scaling
If you know these numbers, you will know why you spend.
If you know why you are spending, you will be able to determine where to increase the budget and where to decrease it.
RAM Orbit
We create presence… and build impact.
