Marketing Budget

CRM & Retention

Also: Marketing Spend · Marketing Investment

Marketing Budget = Revenue × Budget Percentage (typically 5–15%)

Typical SMB5–10% of revenue

Growth stage10–20% of revenue

Enterprise5–12% of revenue

AU benchmarkVaries by industry

Quick definition

The total amount allocated to marketing activities over a defined period. Typically expressed as a percentage of revenue, broken down across channels, headcount and tools.

Where it shows up in the data

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Fixed vs variable allocation

Some marketing costs are fixed (agency retainers, tool subscriptions, staff) and some are variable (paid media, events, content production). A healthy budget has both. Businesses with only variable spend can scale quickly but have no strategic foundation.

Channel allocation

Budget allocation across channels should follow performance data, not gut feel. Start with what's working (highest ROAS or lowest CAC), fund that fully, then test new channels with a defined experiment budget.

Brand vs performance split

Performance marketing (paid search, retargeting) produces short-term measurable results. Brand building (content, PR, social, sponsorships) produces compounding long-term returns. Businesses that only do performance marketing see diminishing returns over time as demand runs out.

What it actually means

A marketing budget is the total financial allocation for all marketing activities across a defined period, usually a financial year. It covers paid media spend, agency or freelancer fees, software and tools, events and sponsorships, creative production, team salaries and any other cost that exists to generate awareness, leads or revenue. The most useful way to frame a marketing budget is as a percentage of revenue. This makes year-on-year comparisons meaningful and ensures investment scales with the business. At the planning stage, budget decisions should be driven by growth targets, not by what was spent last year.

The most common marketing problem in Australian SMBs isn't a strategy problem. It's a budget problem dressed up as a strategy problem.

How to calculate it

Marketing Budget = Annual Revenue × Budget Percentage Budget Percentage benchmarks: 3-6% B2B services, 5-10% retail/ecommerce, 8-15% SaaS, 10-20% high-growth consumer

Worked example. A professional services firm with $5M annual revenue allocating 5% of revenue: $5,000,000 × 0.05 = $250,000 per year. Split: $80K staff/contractors, $60K paid media, $40K tools and tech, $40K content/creative, $30K events.

The Australian context

Australian marketing budgets are benchmarked in the CMO Council's annual ANZ marketing spend report and IBISWorld industry data. Financial year (July to June) rather than calendar year is the standard planning cycle. GST affects budget calculations for Australian businesses. Media costs in Australia run 20 to 40 percent lower than the US and UK on a CPM basis for digital, though some premium placements are comparable.

Where people get this wrong

Treating last year's spend as the budget baselineIf last year's spend didn't hit targets, repeating it guarantees the same outcome. Budget should be driven by what you need to achieve growth targets, not what you spent before.

Excluding headcount from the marketing budgetStaff salaries are often the biggest marketing cost and are left out of budget conversations. A realistic marketing budget includes all costs that exist to drive growth, including the people doing the work.

Conflating budget with ROISpending more doesn't guarantee better results. Doubling budget on a broken funnel doubles the waste. Budget adequacy and budget efficiency are separate problems that require separate solutions.

Common questions

What percentage of revenue should I spend on marketing in Australia?

There's no universal answer, but rough guides by type: professional services 3 to 6 percent, retail and ecommerce 5 to 10 percent, SaaS 8 to 15 percent, high-growth consumer 10 to 20 percent. Growth-stage businesses typically need to invest more as a percentage than established ones.

Should I include staff salaries in my marketing budget?

Yes. If you're measuring marketing ROI accurately, all costs associated with marketing output should be included, including staff time. Excluding salaries makes marketing look more cost-effective than it is.

How do I allocate budget across channels?

Start by funding what's already working at full efficiency. Then allocate a defined test budget (10 to 20 percent) to new channels or tactics. Review quarterly and shift budget toward what's outperforming. Never allocate based on comfort or habit.

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About New Rebellion

New Rebellion is a marketing intelligence consultancy. We build tools, score Australian businesses on how their marketing actually performs, and publish Debrief every day. This dictionary is part of how we work in the open.

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