Discover healthcare marketing budget benchmarks for independent practices — plus ways to boost and measure success

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

A recent private practices survey conducted by Tebra revealed that $15,000 or more per year is the most common marketing activities budget.

The survey comprised 106 respondents exclusively from private practice settings. Among them, 94% represented physicians, and 5% identified as clinicians or specialists. Nearly all of the respondents were practitioners with ownership stakes. 

This article shines a light on the importance of marketing through the eyes of independent healthcare practices.  

In a rapidly evolving healthcare landscape, the internet is integral to people’s healthcare decisions. That means marketing — both digital and non — is vital to sustainable growth. 

Without healthcare marketing, and without digital marketing in particular, attracting new patients and keeping existing ones can be an uphill battle. As the industry changes from the old, volume-based, physician-centered system, patients are increasingly on the lookout for quality-based providers who keep their modern needs top of mind.

At first glance, potential patients will be choosing between healthcare practices that offer relatively similar services. Marketing shows them why a certain practice is different than the competition, helping them see why it’s their best option. When done well, marketing shows a practice’s culture, personality, and values, helping to personalize it and remain in people’s minds.

When we asked our survey respondents about marketing, just 18% said they consider it “essential” for their practice. 

Nearly half (42%) of independent healthcare practices thought marketing was “important,” while the remainder (24%) reported it as “significant.”

Unsurprisingly, the practices who voted marketing as “essential” experienced year-over-year revenue growth and were, therefore, twice as likely to have this opinion than the businesses with declining revenue. 

These views highlight an important perception gap because the correlation between this perception and revenue growth is substantial. 

Providers experiencing positive revenue growth were more inclined to recognize the importance of marketing, which raises the question that if the remainder of respondents acknowledge its significance, they could potentially amplify their revenue growth trajectory.

The majority (15%) of respondents set aside $15,000 or more for annual marketing activities, followed by 14% that reported between $10,000-$14,999 as their marketing budget. 

Notably, practices with positive year-over-year revenue growth invested 3 times more on digital marketing and social media ads than those with stagnant revenue.

The vast majority of survey respondents (62%) answered 1%-5% when asked: “What percentage of your practice′s gross revenue does your marketing budget represent?” The next bracket (14%) stated spending 6%-10% was their practice’s marketing spend, followed by similar figures for 11%-20% (6%), 21%-30% (5%), and 31%-40% (3%). 

With most participants allocating a conservative 1%-5% of their practice's gross revenue to marketing, this highlights both an industry norm and an opportunity. The correlation we’ve already seen between higher marketing spend and potential revenue growth indicates that a more substantial allocation may boost practices’ revenue.

These form the top 3 answers in terms of marketing expenses for private practices: 

Among the surveyed respondents, the less popular networking expenses included social media ads (29%), print ads, and direct mail campaigns (28%), followed by email marketing (24%), and website hosting with digital marketing (18%).

This leads us to the question, “What type of marketing has been most successful in your practice?”

In order of importance, our respondents ranked the 3 most common marketing and networking activities highest: 

This data indicates that the most frequently engaged marketing and networking activities among private practices were also reported as the most successful. Given the prevalence of these activities in their strategies, it aligns with their perceived effectiveness. 

Online reviews and reputation management is one of the top marketing expenses for practices, and also one of the most successful activities. A practice's online reputation is valuable currency and one of the most essential factors in healthcare marketing success. According to Tebra’s Patient Perspectives survey, 60% of patients said they Google (or use another search engine) to look for reviews of a healthcare practice, and 62% of patients said positive online reviews were an extremely or very important factor in their decision to choose a provider. In other words, reviews can be a prime decision-maker once a prospective patient finds you online. 

A healthcare practice’s star rating is a critical indicator of how prospective patients will perceive its services. Therefore, it’s essential to track your star rating to keep it as high as possible — and promptly address patient feedback and any negative reviews.

This process is made much easier with review management software, a platform that consolidates your online reputation management where you do everything in one place, giving you a better idea of how your star rating is changing over time.

Conversely, organic social media/influencer marketing, PPC, content marketing, and billboard/outdoor advertising were implemented less frequently. They also ranked lower in reported success. This suggests a potential discrepancy between engagement and effectiveness in these areas.

Are you deploying your content effectively? You won’t know unless you’re measuring your practice’s:

Keeping track of these metrics makes it easier to make data-driven decisions to improve your content strategy, like smartly repurposing and reposting popular content.

If you know you have a popular video or a high-traffic blog post, consider creating more content around that topic. When you break an existing topic down into smaller chunks, you can find ways to use it across your marketing channels (e.g., highlighting different pieces of information or using different visuals). 

This practice boosts engagement and makes you appear to be creating more content than you actually are — just remember to keep things fresh by spacing out any reposts.

If you see that your conversion rates are low on a piece of content, it’s time to revisit that content and make changes to improve its effectiveness (e.g., changing the call-to-action). The more data you track, the better insights you’ll have about the success or failure of each piece of marketing.

Our survey reveals that it’s most common (44%) to have 1 private practice staff member dedicated to marketing. The results show that 21% of respondents have 2 members of staff working on marketing activities, and the remaining 18% declared their practice has no in-house marketing support.

Regarding time investment, the distribution is diverse. While 11% allocate no time to marketing, a substantial 43% dedicate 1-5 monthly hours, and 15% devote 6-10 hours. Only a small fraction (3%) invest 41 or more hours per month into marketing-related tasks.

Furthermore, the correlation between increased year-over-year revenue and the allocation of more staff time to marketing efforts highlights a significant connection. Practices experiencing year-over-year revenue growth appear to invest more staffing resources into marketing, potentially contributing to their revenue uptick.

As well as analyzing the time spent and type of marketing activities, it’s important to recognize how independent practices calculate their marketing return on investment (ROI).

New patient acquisition (48%) was the top response, followed by online reviews and ratings (34%). The amount of net new revenue generated (32%) was the 3rd most common answer. 

The 5 least popular methods of measuring marketing ROI are as follows:

Patient acquisition cost (PAC) is the amount of marketing and advertising dollars that a healthcare practice spends to acquire a new patient over a given period (e.g., a month, a year, or a quarter). To calculate your practice’s PAC, divide the total marketing and advertising spend by the number of new patients acquired during the chosen period.

Understanding PAC is critical in determining whether you’re getting good ROI and helping you determine if you’re acquiring enough new patients to justify the investment you’ve put into the campaign. 

In short, PAC helps practice owners decide whether they’re spending too much or too little on marketing and advertising.

In healthcare marketing, ROI looks at the profit generated from marketing campaigns relative to the costs. In the most successful healthcare organizations, Google Analytics, marketing automation platforms, and customer relationship management (CRM) systems are all used to measure ROI.

Make measuring your marketing campaigns’ ROI easier by using a vanity URL (a custom web address that is branded for marketing purposes) in a print ad, or by using unique links in pay-per-click ads to measure the number of resulting clicks. 

Practices with online scheduling can track how many bookings result from a specific ad with a specific link. This tool allows you to measure the profit of those bookings. Dividing that information by the cost of the specific ad that prompted the bookings will determine the campaign’s ROI.

Once you know your ROI, you can determine where to make adjustments to your ads and your website. Access to this data will help you make informed decisions about where to allocate your resources to attract and retain your target audience.

Notably, one practice stated that, "We will not be doing any active marketing as our practice is currently too full to accept new patients." On the contrary, another reported new patient acquisition will be their priority in 2024. 

In fact, 18% of survey respondents will prioritize attracting new patients to their practices in the coming year. 

The rest of the practices surveyed plan to improve their awareness in their communities of their business (6%), and 10% want to improve their word-of-mouth referrals. 

Looking ahead to 2024, the projected shifts in marketing budgets among our surveyed practices indicate a trend of stability, with 65% anticipating no change in their budgets. Additionally, 31% plan to increase their marketing budgets, while a smaller subset (4%) anticipates a decrease. 

This suggests a cautious yet optimistic outlook among these practices, with a substantial portion considering potential expansions in their marketing investments for the coming year.

The most important issues practices will focus on in 2024 will be managing workflow (27%), finding new patients (25%), and hiring talented people (19%). 

The practices that experienced increased year-over-year revenue growth were twice as likely to say managing workflow is the first issue they will focus on compared to practices whose revenue stayed the same year-over-year. 

These profitable practices were less focused on retaining existing patients (13%) and hiring talented people (15%), while practices with no revenue growth ranked patient retention at 22% and hiring at 31%. 

The most popular digital channels our respondents plan to invest in for 2024 are online reviews and reputation management (49%), online business listings (33%), and social media ads (29%). 

Interestingly, the more successful practices state a higher likelihood of investing in PPC, digital ads on the web, and online business listings in 2024. 

The biggest planned areas of marketing investments are: 

The top areas our surveyed practices seek marketing education and inspiration from are looking at competitor practices (39%), experimentation (34%), and following industry leaders and influencers (29%).

Respondent sound bites, when asked about their best marketing success story, included: 

The majority of practices we surveyed reported that their revenues have increased year-over-year (53%), while 35% stated they stayed the same. Only 12% experienced a decrease in their revenue on a yearly basis.

The typical growth among responses was between 6%-10% (45% of respondents). In addition, 24% experienced growth of 11%-20% in 2023 and 15% saw 1%-5% growth. Another 12% stated their practice’s business has grown by 21%-30%.

Our report highlights a cautious approach to marketing among independent healthcare practices, as indicated by the stability in marketing budgets and the conservative allocation of funds. 

However, the optimism comes through in the anticipation of potential expansions in marketing investments for the coming year, coupled with the majority of practices experiencing year-over-year revenue growth. 

The combination of cautious decision-making and positive outcomes suggests a balanced and hopeful perspective for the industry as a whole. 

Like all marketing, healthcare marketing is open to creativity. There are always cost-effective marketing strategies you can implement at your practice. If you're ready to invest in marketing for your practice, consider the following 4 areas.

Invest some time in defining your target patients: create a clear, concise Ideal Customer Profile (ICP). Creating an ICP means thoughtfully reflecting on your customer base and business services. When you do so, you’ll find that it highlights growth opportunities and patient needs, making it easier and faster to decide on the marketing content most suited to your practice.

Having an SEO-optimized, high-conversion website is the baseline for establishing your practice as legitimate and professional. With just seconds to capture a visitor’s interest, your website and logo must be memorable, accessible, and user-friendly. 

Patients tend to find the following pages most important:

Consider using a live chat function for instant customer service, and be sure to correctly format your site so that the chat function is accessible on mobile devices.

Whether it’s through content marketing like SEO-optimized blog articles or through memorable and active social media channels, establishing your digital presence is a necessary investment for today’s independent medical practice. Your consistent online presence is invaluable for:

Medical SEO and building a social media presence are both ongoing projects that gain traction over time. The more consistently you contribute content in the digital space, the more likely it is that you’ll reach a growing audience.

Healthcare practices generate an enormous amount of data, a lot of it unstructured and coming in from different silos. Not only can it be a huge undertaking to “clean” and extract insights from this data, issues like HIPAA compliance also need to be considered.

Fortunately, today’s marketing automation systems make these challenges much more manageable for practice owners. Investing in automation lets you see your practice’s data in a more understandable format, making it clearer where to further invest and where to potentially cut back. 

With a thoughtful marketing strategy and a high-functioning data analysis system in place, the road to an increased patient base and high patient retention is significantly smoother. Independent practice physicians can take advantage of the additional time and resources and put their focus back where it matters most: improving their skills and prioritizing patient care and outcomes. Effective measuring of market campaigns isn’t just a goal to consider — it’s a key part of a thriving independent practice. 

Tebra’s patient experience suite will provide the solutions you need to improve your practice’s measured marketing approach.