The 'Percentage of Revenue' Trap is Killing Your Growth
If you’ve ever sat in a boardroom in Eagle Farm or a café in West End and had a consultant tell you that you "should be spending exactly 10% of your gross revenue on marketing," I want you to do me a favour: ignore them.
It is one of the most persistent, lazy, and dangerous myths in the Australian business landscape.
Why? Because a 10% spend for a high-margin SaaS company in Sydney looks nothing like a 10% spend for a family-owned construction firm in Ipswich. One is buying growth; the other is likely flushing profit down the toilet.
In 2026, the game has changed. Media is more expensive, privacy laws have made tracking a nightmare, and the 'standard' benchmarks are mostly fabricated by agencies looking to pad their management fees.
I’m writing this because I’m tired of seeing Brisbane business owners hand over $5,000 a month to 'digital gurus' without any clue if that figure is a bargain or a robbery. Let’s look at the real benchmarks, the hidden costs, and the quick wins you can implement today to stop the bleeding.
The Reality of the Australian 'Marketing Tax'
Let’s call it what it is. Marketing in Australia is a tax on doing business. Between the Google/Meta duopoly and the rising cost of local talent, your dollar doesn't go as far as it did three years ago.
1. The Small Business Baseline (Revenue < $2M)
For businesses in this bracket, your marketing spend isn't a percentage; it's a survival cost.The Benchmarks: Expect to spend $2,000 – $5,000 per month. The Trap: Spending this entirely on 'Brand Awareness'. If you’re a local plumber or a boutique law firm, nobody cares about your brand 'vibe' yet. They care that you show up when they have a problem. The Fix: 80% of this budget should be in direct-response (Google Ads, Local SEO). The other 20% is for keeping your website from looking like it was built in 2012.
2. The Mid-Market Muddle ($2M - $10M)
This is where things get messy. You’ve likely outgrown the 'one-man-band' freelancer but aren't ready for a full-scale internal team.The Benchmarks: $5,000 – $15,000 per month in ad spend, plus $3,000 – $7,000 in management/agency fees. The Trap: The 'Leaky Bucket'. I’ve seen companies in Fortitude Valley spend $10k a month on lead gen while their CRM is a literal pile of sticky notes. The Fix: Before you increase your spend, audit your cross-channel data to see where the leads are actually dropping off. Usually, it’s not the ads; it’s your follow-up.
The Three Biggest Lies Agencies Tell You About Costs
I’ve been in this industry a long time, and I’ve seen the invoices. Here is what the 'big city' agencies won't tell you over their craft beers.
Lie #1: "You need a minimum of $10k spend for the algorithm to work"
Rubbish. This is agency-speak for "I can't be bothered managing a small account because my commission is too low." While Google’s AI needs data, a skilled specialist can see results on $2,000 a month if the targeting is tight. If an agency refuses to work with a smaller, profitable budget, they aren't 'exclusive'—they’re just lazy.Lie #2: "Content is King (so pay us $4k for 4 blogs)"
If I see one more generic, AI-generated blog post about 'Top 5 Tips for Spring' that costs a business $1,000, I’m going to lose it. AI content without a distribution strategy is just digital litter. Unless that content is solving a specific customer pain point or ranking for a high-intent keyword, it’s a vanity project.Lie #3: "Our Dashboard Shows a 10x ROAS"
Most agency dashboards are designed to make the agency look good, not to help you make decisions. They’ll claim credit for a customer who clicked an ad after they had already searched for your business name. This is why so many owners feel like they’re making money on paper but their bank account is empty. Often, your marketing dashboard is lying by over-attributing success to easy wins.Quick Win #1: The 'Zero-Based' Budget Audit
Stop looking at what you spent last year. It’s irrelevant. Instead, do a Zero-Based Audit this weekend. It takes two hours.
1. List every recurring marketing subscription. (SEMRush, Canva, Mailchimp, that weird heat-mapping tool you never look at). Cancel the ones you haven't opened in 30 days. 2. Calculate your CAC (Cost Per Acquisition). Not 'Cost Per Lead'. How much does it actually cost in marketing dollars to put a paying customer in your database? 3. Kill the Bottom 20%. Look at your channels. If Facebook is giving you 'likes' but Google is giving you 'sales', move the Facebook money to Google. It sounds simple, but most people are too afraid of 'missing out' to pull the plug.
Quick Win #2: Optimise for the 'Hybrid' Journey
Australians are researchers. We don't see an ad and buy instantly—especially for B2B or high-ticket services. We see an ad on the bus, we check your Instagram at lunch, we read a review on Reddit, and then we Google your business name.
If you are purely benchmarking based on the 'last click,' you are undervalueing your most important touchpoints. You need to understand that the funnel is a fantasy and stop trying to force customers into a linear path that doesn't exist in the real world.
Action: Set up 'Assisted Conversions' in Google Analytics 4. It’s free, and it will show you which channels are starting the conversation versus which ones are just finishing it.
Benchmarking Talent: In-House vs. Agency vs. Freelancer
This is where the biggest cost variations happen. Here is the 'no-fluff' guide to what you should be paying in the Australian market right now:
The Freelancer ($50 – $150/hr): Great for execution (e.g., "I need these 5 graphics done"). Terrible for strategy. If you ask a freelancer for a strategy, they will give you a strategy that involves doing more of what they happen to be good at. The Boutique Agency ($3k – $7k/mo): This is the sweet spot for most SMEs. You get a team's worth of skills for the price of one junior employee. Warning: Ensure you are talking to the person actually doing the work, not a 'Senior Account Manager' who just forwards emails.
- The In-House Junior ($65k – $85k + Super): Only do this if you have the time to manage them. A junior marketer is not a strategy engine; they are a pair of hands. If you don't know what they should be doing, they will spend 40 hours a week making pretty pictures on Canva that don't sell anything.
Why Brisbane Businesses Often Get Ripped Off
There’s a specific trend I’ve noticed in South East Queensland. Because we have a booming tech and construction scene, 'specialist' agencies are popping up everywhere claiming to be experts in your specific niche.
They charge a 'niche premium' but then use the exact same templates for every client. If you’re a builder in Coorparoo and your ads look identical to a builder in Chermside, you’re not paying for expertise—you’re paying for a shared Google Drive folder.
Demand original creative. Demand to see the data behind the 'niche' strategy.
The 'Profit-First' Benchmark Formula
Instead of the 10% rule, use this. It’s harder, but it actually works:
1. What is your Average Customer Lifetime Value (LTV)? If a customer is worth $1,000 to you over a year. 2. What is your Gross Margin? Let’s say 50% ($500). 3. What are you willing to 'pay' for that customer? If you want to keep $300 in profit, your 'Allowable CAC' is $200.
That is your benchmark. If your agency is getting you customers for $150, spend every cent you have. If it’s costing you $250, the '10% of revenue' rule is just a slow way to go broke.
Conclusion: Stop Guessing, Start Measuring
Marketing isn't a mysterious art form; it’s an arbitrage of attention. You are buying attention and trying to sell it for more than you paid for it.
If you can't see the direct line between your spend and your profit, you don't have a marketing budget—you have a hobby.
Your 3-step immediate action plan: 1. Audit your 'Ghost' spend. Cancel the software and 'brand' fluff that isn't performing. 2. Calculate your Allowable CAC. Know your numbers so an agency can't BS you with 'impressions'. 3. Check your attribution. Make sure you aren't paying twice for the same customer just because they clicked two different ads.
Look, I get it. You started your business to do what you're good at, not to stare at spreadsheets and argue with Google Ads reps. But in the current Australian economy, the difference between a thriving business and a struggling one is often just the efficiency of their marketing spend.
Stop letting 'industry standards' dictate your bank balance. Take control of your data, demand transparency from your partners, and treat every marketing dollar like it’s your last.
Need someone to take a cold, hard look at your current marketing spend without the agency fluff? We help Brisbane businesses cut the waste and find the profit hidden in their data.
Ready to see the truth behind your numbers? Contact Local Marketing Group today.