How to determine your medical practice’s marketing budget (with free template)

Editor's note: This article was updated on July 8, 2024 with additional information and resources.

In an ideal world, your service would be your marketing.  

But the reality is that you need to market your healthcare practice to attract and keep patients. 

You’ve probably dabbled in marketing. Maybe you’ve tried your hand at Meta advertising, social media marketing, or even blog posts. While the first step to getting started is… getting started, deciding on your marketing budget is high on the priority list.

Whether you outsource or handle your marketing in-house, you’ll have to determine your medical practice’s marketing budget. How much should you spend to get patients in the door?

Of course, there’s no one right answer. (Nothing’s ever that easy.) But we’re here to help you determine:

In the Healthcare Marketing Budget Benchmark Survey, Tebra surveyed owners and managers of 106 private practices to hear how they allocate their marketing budgets directly from them.

Attracting new patients requires a different approach than effective patient recall. A medical practice marketing strategy should be able to cater to patients at different stages of the sales funnel — and a marketing budget is a key part. Here are a few reasons why a marketing budget is an important part of practice growth:

In sum, a marketing budget for an independent medical practice is not just about attracting more patients. It’s a multifaceted strategy that supports visibility, growth, evaluation, adaptability, and financial stability. These elements collectively enhance the practice’s ability to provide quality care while maintaining success as a business.

According to Tebra’s survey, here’s roughly how much private medical practices spend on marketing in dollars:

Here’s the full budget breakdown:

However, if you’re looking for an easier way to calculate your own budget, it’s more helpful to look at the marketing budget as a percentage of the practice’s overall revenue:

Several critical factors play into how you determine your annual healthcare marketing budget. It’s not just about picking a number that sounds good — it’s about strategically aligning your financial resources with the unique aspects of your practice. 

Consider these factors when determining your healthcare practice’s marketing budget.

Practices at this stage have to allocate a much higher percentage of their revenue for marketing efforts than practices that have been around for a while. You’ll have to balance the need for new patients with your available funds.

Also, take a look at your patient capacity. If you can’t expand your care team, how many patients can you realistically see in a day? If you’re well under capacity, it means you need to siphon more money into your budget. However, you can have a more conservative marketing cap if you're near max capacity.

Your specialty also impacts your patient lifetime value. Do you often see patients for a short period of time, like a physical therapy clinic? Then, you need to work harder to continue to acquire new patients. However, if you work in primary care, your patients will typically stick around longer, and you won’t have to continuously work as hard to find new ones.

A well-structured marketing budget is essential to get your marketing plan up and running. But what should medical practices put in a marketing budget? Consider these elements:

Once you’ve decided on your marketing budget, you need to determine how to spend it. You need a strategic approach that balances multiple channels to achieve the highest ROI. Let’s examine marketing tactics and how medical practices allocate their budgets.

Note: You can also start with a goal-based marketing budget that works through this process backward. Start with your goal, determine the tactics to get there, and set the budget based on that information.

Average budget: 

Networking and referrals are often the most effective marketing tactics that medical practices can employ. However, they're not often reflected accurately in marketing budgets.

These often include hard expenses like health fairs, networking events, and conferences. It pays for tickets, signage, promotional items, and booth fees. 

However, this doesn’t account for the intangibles that make networking and referrals effective. It takes time to build relationships and earn a reputation that encourages people to recommend your practice. You need to deliver consistent results, have strong patient relationships, offer personalized care, and keep patients engaged. 

Networking is a great marketing tool for longevity and sustainable growth, but it’s not a quick solution for attracting more patients to your practice.

Average budget:

As part of your marketing budget, allocate resources to ensure your practice is accurately and prominently listed across various online platforms. Online listings, such as Google Business Profile (formerly Google My Business), insurance websites, and review sites improve your SEO, making you more likely to land on top of the results page. 

That’s likely why 42% of surveyed medical practices use online business listings. It’s ranked the #2 most used tactic and the second most successful for practices. Yet, most providers only keep up with 1 to 3 listings out of more than 60 in the market. 

To make the most of your online listings, you need to claim them and update them monthly to reflect new information (think: updated hours, new providers, additional specialties, etc.). Overall, practices said managing their online listings was the third most effective marketing tactic.

Whether you manage your own online listings or automate them, it drastically impacts your searchability on the web and offers a high ROI.

Average budget: 

Managing your healthcare practice’s online reputation is critical in today’s digital landscape. According to Tebra’s 4th annual Patient Perspectives report, 3 in 4 patients say online reviews are extremely or very important when choosing a healthcare provider.

According to Tebra’s most recent survey, 37% of medical practices use online reviews and reputation management as part of their marketing efforts, and practices ranked it the second most successful marketing tactic overall.

You can manage reviews, send surveys, monitor feedback, and respond to reviews either with your in-house team or through reputation management automation. 

Take a look at some additional strategies to boost your online reputation.

Average budget:

Medical practices can use social media ads to attract new patients and engage current ones. Ads offer a strategic way to increase visibility and promote health services.

Social media advertising enables practices to target specific demographics, tailoring messaging to potential patients based on age, location, interests, and even health-related behaviors. This level of customization ensures that you use your marketing dollars efficiently and helps you reach the right audience with the right message.

Given how budget allocations vary, there’s clearly flexibility in how much you invest in this channel. The key is to align your spending with clear objectives and measurable outcomes. This could include increasing website traffic, boosting appointment bookings, or enhancing patient engagement.

Average budget:

Earned media is any content written about your business that you didn’t pay for or create yourself. Owned media are tactics like your practice website, blog, or social media accounts. Together, they make a powerful marketing platform.

Search engine optimization (SEO) falls somewhere in the middle, influenced by what you write about your practice and what others write about it. With average budgets indicating modest SEO spending for most medical practices, you can do the most by optimizing your existing website and using local SEO strategies.

Since creating a practice website or starting a blog can seem daunting, many practices outsource it to healthcare marketing agencies with the resources to build a full digital marketing strategy.

Whichever budget range you determine will also likely determine the depth of your strategies. SEO and content marketing are both long-term strategies that take time to build up but pay off in the end.

Average budget:

Print ads and billboards require relatively minimal expertise and are a straightforward option for medical practice marketing. They’re both easy to create, either by an in-house team or through an agency, and reusable for multiple campaigns.

While it’s hard to measure the ROI of billboards, coming in last place on Tebra’s most impactful survey, this traditional approach can work in high-traffic areas. Billboards may cost as little as $2,000 per month but can soar to as much as $100,000 in populous urban areas. Still, they should be considered for brand awareness and patient acquisition.

Print ads come with a much smaller price tag, with magazine ads typically starting around $500. Still, those considering print ads should take a closer look at digital ads for their ability to target specific demographics and their trackability.

It’s normal to get tunnel vision and fall into a few traps while building a practice marketing budget. Here’s a list of issues to avoid.

While the overall budget is fixed, the categorical budget should be flexible. Unexpected costs arise at all times. For example, it might be necessary to pivot to a different marketing strategy or deal with increasing advertising rates.

Without a buffer, chances could strain the budget and force the practice to redirect funds into the needed areas. Instead, add a small buffer for unforeseen expenses to keep up with internal changes.

As channels emerge or change, create a buffer to experiment. For instance, Google Search Generative Experience (SGE) might be a bigger contender in the future. In this case, you might have to invest in an SEO freelancer or agency who knows how to optimize your website to keep up with these changes.

The point is not to generate a positive ROI but to have enough resources to try new things to identify what works in the current climate and what doesn't.

It’s important to take a data-driven approach to the budgeting process, as existing biases could lead to the wastage of resources. For example, if a particular social media campaign consistently underperforms the others, it's best to invest elsewhere in the upcoming year.

There's a difference between experimenting and running a failed experiment. The latter is where you'll end up draining your budget. So, evaluate the spend from an objective standpoint to make informed decisions.

A Tebra survey revealed that 73% of patients consider leaving a practice due to poor experience with a provider. This is why it’s important to invest in patient retention as it could drastically impact your practice’s growth.

Set aside some budget to invest in patient recall campaigns like text messages, emails, and patient portals. Overlooking these channels could result in high patient turnover, impacting the bottom line.

Using the same budget each year without considering changes in the practice or industry is a mistake. For instance, a fairly stable business with a consistent stream of customers can consider allocating the same amount of budget. However, that’s rarely the case for most practices.

Marketing channels might undergo changes, just as it did with SGE. On the other hand, the practice could have more leftover budget or will need more/less budget for marketing. The budgeting process is more nuanced than simply copy pasting last year’s budget. You need to consider growth goals, current rates for marketing/advertising, and resources required.

Let's say a practice has never invested in a billboard previously but now wants to do one in an urban area like New York. The costs could go up to $25,000 monthly, depending on the location. If the practice plans to stop PPC ads and not reinvest in another channel, reduce the allocated marketing budget. This is why it's best to regularly review the practice’s business and marketing goals and make a decision accordingly.

A budgeting template offers a plug-and-play solution to avoid missing anything while planning. Tebra has a simple marketing budget template that lets practices enter their numbers and see the projected and actual marketing spend throughout the year.

Download Tebra’s free, customizable healthcare marketing budget template.

What should you expect for healthcare practice marketing in 2024? Most surveyed medical practices (65%) anticipate their marketing budget to stay the same in 2024, with nearly a third expecting an increase.

With mostly stable marketing budgets, medical practices seem to be approaching marketing with a cautiously optimistic approach.

Digital channels will continue to dominate marketing spending, with reputation management and online reviews at the top. As 2024 progresses, it’s clear that healthcare practices are balancing stability and targeted investments to position themselves for sustained growth and success in this dynamic healthcare market.