Marketing Spend for Dental Practices: How Much Is Too Much?

Every article that answers this question gives you a range. 2% to 7% of revenue. 3% to 10%. 3% to 5%, which one publisher calls "universally accepted." We went looking for where any of those numbers came from, and there is no bottom to the stack. No association publishes one. No free survey produces one. No government dataset produces that range. The only body of measured data on what dental practices actually spend on advertising says something much smaller, and understanding why the two numbers differ is more useful than either one on its own.

This is not the first time this year we have gone looking for a widely quoted dental benchmark and found nothing underneath it. The same thing happened with occupancy cost, where no credible body publishes a production-based figure at all. It is worth knowing which of your benchmarks are real, because the ones that are not will quietly set your budget anyway.

Where the marketing benchmark actually comes from

Nowhere, is the short answer. Here is the long one.

The Academy of Dental CPAs publishes a list of essential dental KPIs. Marketing spend is not on it, and in fact almost none of their published KPIs carry a numeric benchmark at all. The ADA Health Policy Institute runs the Survey of Dental Practice, which is the best public dataset on practice economics in the profession. It reports expenses per dentist as a single total. The words "advertising" and "marketing" do not appear anywhere in its data tables. The ADA's own marketing and advertising guidance is about truthfulness and FTC compliance, and contains no budget figure. The Dental Economics and Levin Group annual practice survey reports one blended overhead number with no category split. The one paywalled benchmark study in the profession, the ADCPA and NSCHBC report, is built on a small sample of professional practices, and we cannot confirm it carries an advertising line at all.

What is left is agency content. A marketing agency says 2% to 7%. A different marketing agency says 3% to 10%. A patient-communications vendor says 3% to 5%. None of them cites a source, the ranges do not agree with each other, and the denominator silently changes between revenue, collections and production as you move from one to the next. Those are three materially different numbers, which is a reliable sign that nobody is working from a real dataset.

None of these is a dataset. They are positions, and they do not agree with each other.

The one measured figure, and its limits

There is real data, and it comes from tax returns. The IRS publishes Statistics of Income for nonfarm sole proprietorships, broken out by industry, with an "Offices of dentists" column and a separate line for advertising.

Four things about that table before you use it. The denominator is business receipts, which on a cash basis is close to collections, not net production. The population is sole proprietorships only, so S corporations are excluded and that is where most established practices sit. Average receipts per return in 2023 were $319,670, against roughly $965,000 in gross billings at the ADA's average general practice. Those are different bases, but the size gap is the point: this is the small end of the profession, measured accurately. And SOI is a sample, not a census. 2023 is the most recent year published.

The scope matters most. That line is Schedule C line 8, advertising, and nothing else. It excludes a marketing coordinator's wages, which sit in payroll. It excludes capitalized signage, which sits in depreciation. So it measures something narrower than what an agency means by "marketing spend," and part of the gap between 1.2% and the ranges being asserted is definitional, not behavioral. Part is population, because sole proprietors are the small end of the profession. What is left cannot be sized, because one number was measured and the other was not.

What actually belongs in marketing, and what usually does not

Before you can compare your number to anything, your number has to mean something. Most practices we take on have a marketing line quietly carrying four or five things that are not marketing, which makes the percentage unusable in either direction. A standardized chart of accounts fixes this once and then keeps fixing it.

Two of those are worth calling out because they cost real money. The first is the donation booked as advertising. We see it constantly, and for a sole proprietor that misplacement moves the deduction off the business return entirely. It stops reducing self-employment tax, and unless you itemize it stops reducing anything. And referral rewards are business gifts under the $25 cap, not advertising, which almost nobody applies. The IRS treats advertising as an ordinary and necessary cost directly related to your business activities, and the further a line sits from that description, the less likely it belongs there.

Compute your own number instead

Once the account is clean, the arithmetic is one line. Take 12 months of marketing spend and divide it by 12 months of net production. Use net production, not collections, because that is the denominator every other practice benchmark uses and mixing bases is how owners end up comparing two unrelated numbers. That also means your number will not sit next to the IRS figure above. Business receipts are closer to collections, which is the smaller denominator, so identical spending reads higher there than it will in your books. Compare your number to your own prior months. Then decide what you are including. The coordinator's salary stays in payroll on the books. For your own management number you can add it back, but if you do, say so, and keep saying so every month. A percentage is only useful against itself over time, and the moment its definition drifts, the trend line stops meaning anything.

The honest use of your marketing percentage is as a trend, not a grade. Watch it against new patient counts over the same period. If spend rose 40% and new patients did not move, you have learned something specific about your marketing that no benchmark could have told you, and you learned it from your own ledger. That is a better question than whether you are inside somebody's range, and it is the one your overhead percentage will eventually force you to answer anyway.

What you now have is a real figure for your practice. Plenty of the other numbers on your monthly statement do have sourced ranges behind them, and our free Dental Practice Benchmark Scorecard checks those against healthy dental ranges in about two minutes.

P.S. Reciprocity Accounting codes dental practice books so a marketing number means one thing every month, which is the only condition under which a trend is worth reading. See how we can help your practice.

Frequently Asked Questions

So how much should I spend on marketing?

There is no defensible answer as a percentage, and anyone who gives you one is quoting a number with nothing behind it. What can be answered is whether your current spend is producing patients, and that is measured in your own books against your own new patient count. A practice at 1% with a full schedule and a referral base does not have a marketing problem. A practice at 6% with a soft schedule has a spend problem or a conversion problem. Those get fixed differently.

Why is the IRS figure so much lower than what I hear?

Three reasons stacked together. It covers only Schedule C line 8, so staff wages and capitalized signage are excluded by definition. It covers sole proprietorships only, which are smaller practices on average. And the numbers you hear were not measured against anything, so there is no reason to expect them to match a figure that was.

Should a startup practice spend more?

Almost certainly, and that is the clearest case where a percentage is the wrong tool. A practice with low production is dividing by a small number, so the percentage looks alarming while the dollars are modest and entirely appropriate. Budget a startup in dollars against a patient acquisition goal, and start reading the percentage once production has stabilized.

Does my marketing agency's reporting count as measurement?

It counts as their reporting. Leads, clicks and impressions are real, but they stop short of the number that matters, which is what a new patient cost you and what that patient produced. That calculation needs your ledger and your practice management system together, and it is the reason those two reports should reconcile every month.

Where should marketing sit on my profit and loss?

In operating expenses, as its own line, never buried in a general administrative bucket. If you run more than one channel and want the spend-versus-volume question to be answerable later, use subaccounts by channel rather than one lump. Doing that costs nothing at setup and is close to impossible to reconstruct after the fact.