How much do Australian and New Zealand SMEs actually spend on marketing in 2026?

Every business owner eventually asks the same question: how much should I be spending on marketing?

The honest answer is that there is no universal number. What there is, however, is a framework for working it out, and real data from New Zealand and Australian businesses that shows what is actually being spent.

This article walks you through the most widely used marketing budget models, explains where each one works (and where it falls apart), and shows you how businesses in our own client dataset generated an average of 41.39% revenue growth on a marketing investment of just 2.02% of turnover. For context, the global benchmark is 7.7%.

The point is not that you should spend less. The point is that you should spend smarter.

Why Setting a Marketing Budget is Harder Than it Looks

Marketing budget decisions are complicated by two competing pressures.

The first is the temptation to anchor on a number. Whether a percentage, a benchmark, a figure from a survey, and treat it as the answer. The second is the opposite: to avoid committing to a number at all, spending reactively rather than strategically, and then wondering why results are inconsistent.

Neither approach works. The businesses that get this right do something different: they choose a model, apply it to their specific situation, and then use real performance data to refine their investment over time.

The Four Main Marketing Budget Models

1. The Percentage-of-Revenue Model

Best for: Established businesses with stable, measurable turnover.

This is the most commonly cited approach, and the one most business owners encounter first. The logic is straightforward: allocate a fixed percentage of your revenue to marketing, and that budget scales up or down as your business grows.

The most widely referenced benchmark comes from Gartner's annual CMO Spend Survey, which reported that global marketing budgets averaged 7.7% of company revenue in 2025. The broader CMO Survey places the figure slightly higher, at 9.4%.

These figures are not wrong, but they need context. Gartner's data draws heavily from large enterprises with established brand equity, mature sales pipelines, and dedicated marketing departments. The profile is quite different from an owner-operated Australasian business selling $80,000 farm sheds or residential cladding.

When the data is segmented by company size, the variation becomes striking. Businesses with a revenue under $10 million typically allocate between 12% and 15.6% of revenue to marketing, nearly double the headline benchmark. This is not inefficiency; it is the cost of building a pipeline from a standing start, without the brand recognition that larger organisations carry.

As a starting point, the percentage-of-revenue model offers a useful anchor. As a definitive answer, it can mislead, particularly if the benchmark you are using does not reflect your industry, company size, or growth stage.

What percentage makes sense by stage?

B2C businesses typically sit at the higher end of each range; B2B businesses at the lower end.

2. The Goal-Based (Reverse-Engineered) Model

Best for: Businesses with clear revenue targets and known marketing metrics.

Rather than starting with a percentage and hoping it generates enough activity, this model starts with the revenue outcome you need and works backwards. It is the more rigorous of the two primary approaches, and the one that tends to produce more defensible budgets.

The logic runs as follows:

Step 1: Define your revenue target. How much additional revenue do you need to generate this year?

Step 2: Calculate the number of customers required. Divide the revenue target by your average deal value. If you need $500,000 in new revenue and your average deal is $85,000, you need approximately six new customers.

Step 3: Work back through your conversion rates. If your opportunity-to-revenue rate is 3.41% (the average across our client dataset), you need roughly 176 opportunities to generate six customers. If your visitor-to-contact rate is 1.97% and your contact-to-opportunity rate follows from there, you can calculate the traffic volume required.

Step 4: Calculate what it costs to generate that traffic. Using your known cost-per-click, cost-per-lead, and channel mix, you can estimate the budget required to generate the necessary volume.

This approach only works if you have reliable data to feed into it. For businesses without a functioning CRM and clear attribution, the inputs will be estimates at best. But even rough estimates are more useful than a percentage applied to last year's revenue. The model forces you to think in terms of outcomes, not inputs.

A worked example using V86 benchmark data:

• Revenue target: $500,000 in new deals
• Average deal value: $85,619
• Deals required: 6
• Opportunity-to-revenue rate: 3.41%
• Opportunities required: ~176
• Contact-to-opportunity rate (assumed): 15%
• Contacts required: ~1,173
• Visitor-to-contact rate: 1.97%
• Website sessions required: ~59,543
• Average cost per session (paid search): varies by campaign

At a Google Ads CPC of $2.34 (the V86 benchmark average), reaching 59,543 sessions through paid search alone would cost approximately $139,330. In practice, you would not rely on paid search exclusively — organic, direct, and social traffic reduce the paid requirement significantly — but the model illustrates how a revenue goal translates into a marketing investment figure.

3. The Competitive-Parity Model

Best for: Businesses in highly competitive markets where share of voice directly influences market share.

This model sets your marketing budget relative to what competitors are spending, on the premise that visibility is a relative game. If your competitors are spending $50,000 per month and you are spending $6,000, the gap in share of voice will eventually translate to a gap in market share.

The competitive-parity model is most relevant in markets where buyers are choosing between broadly similar providers — and where sustained visibility is the primary differentiator. It is less relevant for businesses with strong differentiation, niche positioning, or established word-of-mouth pipelines.

The practical challenge is that competitor spend data is rarely available directly. Proxy indicators — search impression share in Google Ads, social media activity levels, estimated traffic from tools like SEMrush or Ahrefs — can give a sense of relative investment without precise figures.

For most small and medium-sized businesses in New Zealand and Australia, a pure competitive-parity approach is impractical. It is, however, worth overlaying on whichever primary model you use: if your budget would leave you materially outgunned in the channels that matter, that is a signal to adjust upward.

4. Zero-Based Budgeting

Best for: Businesses rebuilding their marketing strategy, entering new markets, or with no reliable historical data.

Zero-based budgeting takes a different starting point: rather than adjusting last year's budget, it builds from scratch each cycle. Every line item must be justified by the outcomes it is expected to generate.

This approach is more time-intensive but tends to produce tighter, more intentional budgets. It is particularly useful for businesses that have been spending on marketing without clear attribution — where the budget has grown by accretion rather than by deliberate design.

The discipline required is the same as the goal-based model: you need to tie every spend item to a measurable objective. For businesses with mature marketing operations and good data, zero-based budgeting is a useful annual exercise even if the outcome is close to the previous year's figure.

What New Zealand and Australian Businesses Actually Spend on marketing

The V86 Digital Marketing Benchmark Report 2026 draws on data from businesses across Australia and New Zealand operating in agriculture, residential construction, business services, and industrial capital assets.

The figures are grounded in the reality of businesses that sell high-value products and services. Products such as farm sheds, decking systems, commercial vehicles, architecture services, to considered buyers. These are not e-commerce businesses with $50 average order values and volume-dependent unit economics. They operate in markets with long sales cycles, high deal values, and sophisticated buyers.

Here is what the data shows:

Gartner benchmark applied to the revenue profile of this dataset.

The gap between 2.02% and 7.7% is striking. The natural question is whether this reflects genuine efficiency or underinvestment. The honest answer is: both.

How to Generate Strong Returns Below the Benchmark Investment Level

The 41.39% average revenue growth achieved by businesses in this dataset on a 2.02% marketing spend is not evidence that you can grow a business on minimal investment. It is evidence that the type of investment matters more than the total.

Several structural factors explain the efficiency.

The Vanguard 86 system compounds over time. A strategic long-form article continues generating qualified leads for months or years after it was written. An email database built on genuine interest through value-added lead magnets retains value across multiple campaigns. The businesses in this dataset have benefited from years of consistent inbound investment; the 2.02% reflects their current spend, not the cumulative investment that produced their organic presence.

Contact quality determines email performance. Across 399,293 emails sent in FY 2026, Vanguard 86-managed clients achieved an average open rate of 31.37%, compared to HubSpot's industry benchmark of 24.5%. A click-through rate of 12.48% against a 9% benchmark. These results are not produced by larger lists, they are produced by better lists. Every contact in these databases was acquired through deliberate engagement. The absence of cold-purchased or scraped contacts is not a minor operational detail. It is the primary explanation for the performance gap.

Organic and direct traffic closes the most revenue. First-touch attribution data from the dataset shows that organic search and direct traffic together account for 62.7% of closed revenue, at an average deal value of $85,619. Paid search contributes 16.4%. Paid social, despite being the channel most businesses instinctively reach for, accounts for 5.3%. Investment in content and organic presence, which is the component of the 2.02% that compounds, is delivering the majority of the commercial return.

Budget-limited paid campaigns are the hidden inefficiency. Where the 2.02% figure genuinely reflects underinvestment is in paid channels. Google Ads and Meta campaigns across the dataset are regularly flagged as budget-limited, meaning the platform has indicated it could deliver more results with a higher daily budget. A Google Ads campaign averaging $1,625 per month and $2.34 CPC generates approximately 14 clicks per day. At a 1.97% session-to-contact conversion rate, that is one new contact every three days. A business targeting 10 new contacts per day would need to spend over $32,000 per month on Google Ads alone, and at an average deal value of $85,619 with a 3.41% contact-to-customer rate, that investment would project to return over $829,000 in monthly revenue.

The maths does not suggest spending less. It suggests that for businesses with proven conversion metrics, scaling paid spend is one of the highest-confidence investments available.

The Real Cost of Underinvestment in Marketing

There is a tendency to treat marketing budget decisions as being primarily about cost management. The data suggests they are primarily about opportunity cost.

Our analysis of client performance during the December 2025 to February 2026 downturn period found that businesses that maintained their marketing investment saw website traffic drop by 9.6%, leads decline by 7.54%, and deals created fall by 9.52%. Businesses that paused or stopped their marketing saw traffic drop by 30.8%, leads by 28.90%, and deals by 62.10%.

The variable was not the market. Both groups faced identical conditions. The variable was whether they kept investing.

Across the broader FY 2026 dataset, the businesses that had maintained consistent marketing activity through the 2024 contraction were the first to capitalise when conditions improved in Q3 and Q4 of 2025. Some posted their strongest sales months of the year in the second half. The recovery arrived, and it arrived first for those who had never stopped showing up.

How to Build Your Marketing Budget: A Practical Starting Point

If you are an established business with known revenue and some marketing data:

Use the goal-based model as your primary framework. Take your revenue target, apply your known conversion rates from lead to opportunity to closed deal, and calculate the traffic and contact volume required. Use your cost-per-acquisition data by channel to convert that volume into a budget figure. Then sanity-check the result against the percentage-of-revenue benchmark for your sector and stage.

If you are in early growth with limited data:

Start with a percentage of revenue appropriate to your stage. This is typically 10–15% for a New Zealand or Australian SME in growth mode. Invest the majority in channels that generate attribution data quickly (paid search, email) so that you accumulate the performance data needed to move to a goal-based model within 6–12 months.

If you are a startup without established revenue:

Work from customer acquisition cost (CAC) targets rather than revenue percentages. Determine the maximum CAC your unit economics can support (a common rule of thumb is CAC ≤ one-third of lifetime customer value), set an initial monthly budget for channel testing, and scale investment once you can demonstrate that a channel is generating returns within an acceptable payback period.

Regardless of stage, apply the 70/20/10 principle to your allocation:

• 70% to proven channels with demonstrable ROI
• 20% to channels with strong signals but not yet fully optimised
• 10% to testing new approaches

Reallocate quarterly based on performance data, not on instinct or inertia.

The Bottom Line

The Gartner benchmark of 7.7% is a useful reference point. It is not a target.

What the data from New Zealand and Australian businesses in the Vanguard 86 dataset demonstrates is that significant commercial results are achievable at a fraction of that investment. But only if the investment is directed intelligently, measured rigorously, and sustained consistently.

The businesses that grew by an average of 41.39% in FY 2026 were not the ones with the largest marketing budgets. They were the ones whose marketing spend was tied to outcomes, whose contact databases were built on genuine interest, whose content continued generating pipeline long after it was created, and who never stopped investing when conditions became difficult.

The question is not what percentage of revenue you should spend on marketing. The question is whether every dollar you do spend is working as hard as it could.

This article draws on data from the V86 Digital Marketing Benchmark Report 2026, based on performance across 22 businesses in New Zealand and Australia throughout FY 2026. All figures are expressed in NZD unless otherwise stated.