How much should a business spend on marketing in Australia?

Most Australian small to medium businesses should allocate 7–10% of annual revenue to marketing. The average Australian SME currently spends only 2–3% of revenue on marketing — well below the 9.0% average reported in The CMO Survey 2026.

What percentage of revenue should a B2B business spend on marketing?

According to The CMO Survey 2026, B2B product companies spend around 7.0% of revenue on marketing and B2B service companies around 10.1%. Investing 7–10% will generally keep a B2B business in line with, or ahead of, its peers.

How much should a small business spend on marketing per month?

For most early-stage Australian small businesses, a practical monthly marketing budget falls between $1,500 and $4,800. This should cover a mix of always-on activity such as SEO, content, and email, plus campaign-based spend like Google Ads and social media advertising.

Is it worth spending more on marketing during a growth phase?

Yes. Businesses in a high-growth phase, launching new products, or entering a competitive market typically need to spend above industry averages — often 10–20% of revenue — to build awareness and acquire customers at the pace growth requires.

How do I know if my marketing budget is being spent effectively?

Key warning signs of misallocated marketing budget include high ad spend with low-quality leads, heavy reliance on a single channel, and no clear tracking of conversions or ROI. Use Google Analytics 4 and a CRM like HubSpot to connect marketing activity to actual leads and revenue.

What is the marketing budget as a percentage of revenue by industry?

According to The CMO Survey 2026, marketing spend averaged 9.0% of company revenue, varying by sector: B2B product companies 7.0%, B2B service companies 10.1%, B2C product companies 12.0% and B2C service companies 7.2%.

How Much Should a Business Spend on Marketing?

A strategic marketing budget is key to sustainable growth, but how much should your business invest? Let’s break down the numbers and best practices for Australian SMEs.

There’s no single correct answer to how much a business should spend on marketing. But there are clear benchmarks — and most Australian businesses are significantly under-investing compared to what’s needed to grow market share. In this guide, the Method Marketing team in Newcastle gives you a practical framework to work out the right number for your business in 2026.

A strategic marketing budget is key to sustainable growth, but how much should your business invest? Let’s break down the numbers and best practices for Australian SMEs, using the latest industry data and research.

How Much Should You Allocate to Marketing?

A common benchmark is allocating 5-10% of annual revenue to marketing. For instance:

A business with $2 million in revenue should budget $100,000 to $200,000 for marketing.
A high-growth company or one in a competitive industry may need to invest more.

According to The CMO Survey 2026 (surveyed January 2026), marketing accounted for an average of 9.0% of company revenue, though it varied by sector:

B2B product companies spent the least, at 7.0% of revenue.
B2B service companies spent 10.1% of revenue.
B2C product companies spent the most, at 12.0% of revenue.
B2C service companies spent 7.2% of revenue.

The CMO Survey reports on US companies, but it is one of the most widely used benchmarks for marketing spend and a useful guide for Australian businesses.

Breaking Down Your Marketing Budget

To maximise ROI, your budget should cover these core areas:

Paid Advertising – Google Ads, Meta Ads, LinkedIn campaigns.
Content & SEO – Blog writing, website optimisation, video production.
Marketing Technology – CRM tools, email automation, analytics platforms.
In-House or Agency Support – Hiring marketing specialists or outsourcing marketing to experts.

Many businesses make the mistake of one-off campaigns, expecting long-term results. Sustainable growth requires a mix of always-on marketing (SEO, content, social media) and burst campaigns (seasonal promotions, product launches).

When Standard Budgeting Ranges Don’t Apply

While the 5-10% benchmark is useful, some businesses need to allocate more. Consider increasing your marketing budget if:

You’re in a high-growth phase: Fast-growing businesses often spend above industry averages to drive customer acquisition.
You’re in a competitive industry: If competitors invest heavily in marketing, you may need to match or exceed their spend.
You’re launching a new product/service: Market entry requires additional investment to build awareness.
You’re a startup: With little brand recognition, startups often allocate a higher percentage of revenue to marketing.

How to Spend Smarter, Not More

Overspending without tracking ROI can drain resources. In fact, McKinsey & Company research indicates that organisations utilising data-driven marketing strategies achieve a 15% increase in ROI on average. Signs of misallocated budgets include:

High ad spend but low-quality leads.
Heavy reliance on one channel (e.g., only Google Ads with no organic strategy).
No clear tracking of conversions or ROI.

Pro Tip: Use marketing analytics tools like Google Analytics 4 and HubSpot to refine your budget allocation based on performance data.

Where to From Here?

Looking for expert guidance? Book a free strategy session with Method Marketing.

By investing wisely and consistently in marketing, businesses can achieve sustainable growth and a strong competitive advantage.

Planning your budget for the year ahead? See Method Marketing‘s guide to planning your 2026 marketing budget.

Meet the author

Katie Cowling

Katie Cowling is Co-Founder and Director of Digital Services at Method Marketing, a Newcastle-based outsourced marketing agency. With more than 20 years of experience, she leads Method's SEO, GEO and AEO, Google Ads, paid social, content strategy and digital production work, helping Australian businesses grow their visibility in Google and AI search. Katie studied marketing and creative writing at The University of Arizona and has worked across industries ranging from entrepreneurial start-ups to ASX-listed corporations.