ROI Calculator: How Much Should Australian Businesses Spend on Digital Marketing?

“How much should I spend on marketing?” is the question we hear most, and the honest answer is that the dollar figure matters less than what each dollar brings back. A budget is only too high or too low compared with the return.

Here is a straightforward way to work out a number that makes sense for your business.

Start with the rule of thumb, then check it

A common rule of thumb for an established small business is to put roughly 5–10% of revenue into marketing, and more if you are new or trying to grow quickly. It’s a reasonable starting point, but it’s only an average. Your own numbers will tell you far more.

The four numbers that matter

You only need four figures to judge any marketing spend:

Average job value. What a typical job is worth to you.
Leads per month. How many genuine enquiries you get.
Conversion rate. What share of those enquiries turn into paid jobs.
Marketing spend. What you pay each month to get those leads.

A worked example

Say your average job is worth $500, and you turn one in five enquiries into a job (20%).

Each lead is therefore worth about $100 in revenue ($500 × 20%).
If $2,000 a month in marketing brings in 30 extra leads, that’s about 6 extra jobs, or $3,000 in extra revenue.
That’s $1,000 ahead for the month, a 50% return on the spend.

Now change one number. If better follow-up lifts your conversion rate from 20% to 30%, the same 30 leads produce 9 jobs and $4,500. Same spend, far better return. That’s why fixing what happens after the enquiry is often worth more than buying more enquiries.

You can run your own figures through our ROI calculator in about a minute.

Remember repeat work

The example above only counts the first job. A customer who comes back for maintenance, or recommends you to a neighbour, is worth much more than one invoice. If a good share of your work is repeat or referral, you can afford to pay more to win a new customer than the first-job maths suggests.

Where the money should go first

Before spending more on advertising, make sure the basics aren’t wasting what you already spend:

A website that turns visitors into enquiries. Fast, clear, with an obvious way to contact you.
Your Google Business Profile and reviews. Free to set up and often the biggest source of local calls.
Fast response to every lead. An enquiry answered in minutes is worth several answered tomorrow.

Once those are solid, paid advertising and SEO have something worth sending people to.

Signs you’re spending too little, or too much

Too little: you rely entirely on word of mouth, your quiet months are very quiet, and you have no idea where your next ten jobs will come from.

Too much, or in the wrong place: you can’t say which channel produced which jobs, you’re paying for leads far outside your service area, or you’re booked out weeks ahead and still buying more enquiries.

The bottom line

Set a budget you can sustain for at least a few months, track where every enquiry comes from, and judge each channel by jobs won rather than clicks or likes. Then move money toward what’s working.

Want a second opinion on your numbers? Grab our free marketing audit checklist or book a chat and we’ll go through them with you.