The 'Percentage of Revenue' Myth is Dead
If you ask a traditional consultant how much a Brisbane SME should spend on marketing, they’ll likely parrot the same tired advice: "Aim for 5% to 10% of gross revenue."
This is lazy, dangerous, and mathematically flawed.
Benchmarking your spend against a fixed percentage of revenue assumes your business is static and your market is stable. In 2026, with the sheer volume of data at our fingertips, setting a budget based on last year's revenue is like trying to drive a car by looking exclusively in the rearview mirror.
At Local Marketing Group, we see too many Queensland businesses stifling their own growth because they’ve capped their spend based on an arbitrary ratio, or worse, they’re throwing money into a "black hole" of digital ads without understanding their unit economics.
Stop Buying Clicks, Start Buying Customers
The biggest mistake Australian SMEs make is treating marketing as a cost centre rather than an investment in customer acquisition. If you spend $1,000 to make $5,000 in profit, why would you ever stop at 5% of revenue? You should be spending as much as your cash flow allows until the marginal return diminishes.
However, most agencies won't tell you the truth: your marketing dashboards are lying to you about these returns. They show you "cost per click" and "impressions," but they rarely show you the true cost of a settled, high-value customer.
The Real Benchmarks You Should Care About
Instead of looking at industry averages, you need to calculate three specific numbers for your Brisbane business: 1. Customer Acquisition Cost (CAC): What does it actually cost to get a person to swipe their card? 2. Lifetime Value (LTV): What is that customer worth over 12–24 months? 3. Payback Period: How many months does it take to recoup the CAC?If your LTV to CAC ratio is 3:1 or higher, you aren't "spending" money; you're buying profit. If it’s 1:1, you’re just working for Google and Meta.
The High Cost of "Cheap" Marketing
We see a recurring trend in the Australian market: SMEs opting for "cheap" SEO or social media packages for $500 a month. Let’s be blunt—this is a waste of money. In a competitive market like Brisbane, that budget doesn't even cover the cost of a high-quality strategist’s time for two hours.
When you buy cheap, you aren't buying results; you're buying activity. You’re paying for someone to post mediocre content that no one reads. Instead of spreading a thin budget across five channels, you are far better off dominating one.
To see where your current strategy is failing, you must find the exact spot where your leads are dropping off. Often, the problem isn't the "cost" of the marketing, but the leak in your sales funnel that makes every lead twice as expensive as it should be.
The Hidden Value in Your Existing Data
Many business owners complain that the cost of advertising on platforms like Instagram and Google has skyrocketed. They’re right—it has. But most businesses are sitting on a goldmine they refuse to use: their own database.
Stop obsessing over the cost of new leads and start weaponising first-party data already sitting in your CRM. Re-engaging a past customer in Chermside or Fortitude Valley costs a fraction of what it takes to find a new one. If your marketing budget doesn't include a significant portion for retention and database reactivation, you are burning cash on the altar of "new growth."
Actionable Benchmarking for 2026
If you want to move away from guesswork and toward data-driven growth, follow these steps immediately:
Audit your Attribution: Stop trusting Google Ads' "conversion" numbers blindly. Cross-reference them with your actual bank deposits. Set a 'Test' Budget: Allocate 10-20% of your budget to experimental channels, but hold the other 80% strictly accountable to ROI.
- Focus on Profit, Not Revenue: A campaign that brings in $100k in revenue but costs $90k to fulfill and market is a failure. Focus on the contribution margin.
Conclusion
Marketing cost benchmarks are only useful if they are tied to your specific profit margins and growth goals. Following a generic "industry average" is a recipe for mediocrity. In the Brisbane market, the winners are those who understand their data deeply enough to outspend their competitors profitably.
Stop guessing what you should be spending. If you're ready to see the real numbers behind your marketing and turn your data into a growth engine, contact Local Marketing Group today.