Marketing Strategy
By Isuru De Silva, Founder. Published 24 August 2026 · 9 min read
If you ask ten marketers how much a small business should spend on marketing, you'll probably get ten different answers. Some will tell you to spend 5% of revenue. Others will say 10%. Someone on social media will tell you to put everything into Facebook Ads because that's what worked for their business.
I don't think any of those answers are particularly useful on their own. When a small business owner asks me, "How much should I actually spend on marketing?", I usually want to know something else first: what are you trying to achieve, where are your customers actually looking for you, and what condition is your marketing in right now?
Because a plumber in Hornsby, a dental practice in Chatswood and an accountant servicing businesses across Sydney should not automatically have the same marketing budget or channel mix. The number matters. But the strategy comes first.
For an established local service business that genuinely wants to grow, I generally like to see at least $1,000 per month available for marketing, and preferably $2,000 or more before paid advertising spend. That doesn't mean every business must spend $2,000 — I've worked with businesses that have less available and we start with what they can realistically afford. But once you have around $2,000 per month, you usually have more room to improve the fundamentals, test different approaches and build something, rather than constantly deciding which single marketing task you can afford this month.
If you're also running Google Ads or Meta Ads, the advertising budget needs to sit on top of that. For some local Google Ads campaigns, I might look at roughly $30 per day as an initial floor. But that's not a universal rule: in competitive industries, $30 a day may barely generate enough traffic to learn anything useful. That's why I don't believe there is one magic marketing budget that fits every small business.
You'll often hear recommendations based on a percentage of revenue. In my own experience working with smaller service businesses, many are spending around 5–6% of revenue on marketing, and quite a few spend less than that. That doesn't automatically mean they're underspending — a business with strong referrals, excellent local visibility and enough customers may not need the same percentage as one aggressively trying to grow into new suburbs.
The percentage can be useful as a sense check. It shouldn't be your entire marketing strategy. I'd rather know:
Two businesses turning over $500,000 can need completely different marketing budgets.
One of the biggest mistakes I see is jumping directly into advertising. A business owner decides they need more customers, so they put money into Google Ads or Meta Ads. Then nothing happens quickly enough, so they assume advertising doesn't work.
When I look underneath the campaign, the real problem might be the website. The homepage is unclear. There isn't a strong call to action. The mobile experience is poor. The Google Business Profile has hardly any reviews. Nobody is tracking phone calls. The business hasn't clearly identified why customers should choose them over the competitor down the road. Putting more advertising money into that situation doesn't fix the marketing — it simply sends more people into a weak customer journey. That's why I normally start with research.
This sounds obvious. It isn't. I've spoken to plenty of small business owners who chose a marketing platform because someone told them they "need to be on Facebook" or that "everyone should be doing SEO." That's backwards. Start with your customer.
If you're an emergency plumber, people experiencing a burst pipe are unlikely to spend half an hour browsing your Instagram feed before contacting you — they're probably going to Google. If you're running a gym, visual social content and Meta advertising could play a much larger role because potential customers may discover you before they're actively searching for a membership. A dentist might benefit from several channels at once: Google captures people already looking for a dentist, local SEO and Google Business Profile visibility help the practice appear nearby, and social media can build familiarity and showcase cosmetic treatments.
There isn't a universally "best" marketing platform. There is a best channel mix for the customer you're trying to reach.
If I'm working with a local service business with a limited budget, I usually don't try to do everything at once. For many plumbers, mechanics, dentists, physios and similar local businesses, I'd look first at two things.
It's relatively inexpensive compared with paid advertising and it puts your business directly into one of the places local customers are already looking. I'd check categories, business information, services, reviews, photos, posts and updates, local relevance, and whether the profile properly reflects the actual business.
I don't necessarily mean building a completely new website — sometimes the business already has a perfectly usable site, it just isn't doing its job. I'd look at whether it's immediately obvious what the business does, whether the service area is clear, whether there's enough trust, whether customers can easily call or enquire, whether it works properly on mobile, whether important services are easy to find, and whether enquiries are being tracked.
Those improvements can make everything else you do afterwards more effective. Then, depending on the available budget and customer behaviour, I'd look at Google Ads, Meta advertising, SEO or another channel.
One dental client we worked with wasn't getting enough visibility when people nearby searched for their services. We didn't start by throwing more money into advertising — we started with their Google Business Profile. We updated the business information, reviewed and improved the service descriptions, added newer and more relevant photos, and implemented a process to generate more genuine customer reviews. We also began publishing updates through the profile.
Within roughly a month, local visibility started improving. Then, from the second month, we were in a much stronger position to introduce Google Ads. That sequence matters: we had started improving the local foundation before paying for additional traffic. It also gave us an opportunity to look beyond generic searches like "dentist near me" and think about commercially important treatments where the practice had greater revenue potential, such as veneers and cosmetic dentistry.
That's much closer to how I think small-business marketing should work. Foundation first. Paid reach second. Long-term growth layered on afterwards.
This is one of the conversations I have fairly regularly. A business owner says: "I'll put $500 into marketing. Can you guarantee me ten leads?" I understand why they're asking — they're trying to reduce risk. But marketing doesn't work like buying ten units of stock. There are too many variables, including competition, location, cost per click, demand, your offer, your website, conversion rate, reputation, reviews, existing brand awareness, seasonality, the quality of the campaign, and how quickly your team follows up enquiries.
If two plumbers each spend $1,000 on Google Ads, that doesn't mean they'll receive the same number of leads. One might have 300 excellent Google reviews and a website built specifically to convert local traffic. The other might have eight reviews and a website that takes ten seconds to load. The budget is the same. The marketing environment isn't.
You can absolutely start with a smaller budget — sometimes that's the right decision. What I would avoid is using a very small, very short test to make a permanent judgement about a marketing channel. Suppose your industry's average click is relatively expensive: a small budget may produce only a limited number of clicks, and then you receive one lead instead of the five you expected. Was Google Ads unsuccessful? Maybe. Or perhaps there simply wasn't enough data, or the landing page needed improvement, or the wrong search terms were attracting clicks, or the campaign needed more time to optimise. That's why marketers need to diagnose before they declare something a failure.
There isn't a universal minimum. For some smaller local campaigns, I often think in terms of roughly $30 per day or more as a starting point — that's about $900 a month in media spend. But I wouldn't tell every business to use that number. If you're operating in an industry where clicks are expensive, you may need considerably more to generate enough traffic and conversions to make sensible decisions.
Google Ads also has two separate costs when you're working with an agency: ad spend (the money paid to Google) and management (the money paid to the person or agency researching, building, monitoring and improving the campaign). Business owners sometimes combine the two when comparing quotes — they shouldn't. If you have a $2,000 monthly marketing budget and you're spending $1,000 on Google Ads, you don't automatically have $2,000 worth of strategy and management included. Know where the money is actually going.
When I talk about wanting roughly $2,000 available before advertising where possible, I'm not suggesting a business can buy every digital marketing service for $2,000. It still requires prioritisation. Depending on the business, that budget could be allocated across Google Business Profile management, local SEO foundations, website improvements, conversion optimisation, content, review generation, marketing strategy, and tracking and reporting.
You wouldn't necessarily do all of those equally every month. One month might require more website work. Another might focus heavily on local SEO and reviews. Another might involve content creation. Marketing budgets should follow priorities, not service checklists.
SEO is where expectations often become unrealistic. Business owners understandably want to know "when will I rank?" There isn't a precise answer. SEO is a longer-term channel because you're competing against other websites and businesses that may have been building their authority for years. For many local service businesses, I want clients thinking in months rather than weeks. That's one reason I explain SEO as a long game: you keep improving the website, local relevance, content, technical quality, authority, Google Business Profile and reviews, and then those improvements compound.
For the overall marketing strategy, I generally prefer a three-to-six-month window before making major conclusions. That does not mean you wait six months before looking at performance — quite the opposite, you should be reviewing data constantly. Google Ads can give you useful signals much sooner than SEO: you can see clicks, search terms, enquiries, costs and conversion rates within weeks. Paid campaigns may also go through learning and recalibration periods after significant changes, particularly when automated bidding is involved, so you optimise as you go.
Three to six months gives you a better window to judge whether the broader strategy is creating sustainable progress. SEO will often need that longer perspective; Google Ads can usually be evaluated and adjusted sooner. The important point is this: don't confuse monitoring quickly with judging permanently.
Probably the most frustrating situation is seeing a business spending heavily on Google Ads or Meta Ads while the website is clearly not geared towards converting customers — paying for traffic before fixing what happens after the click. But there are several related mistakes I see: choosing channels without researching customers (being told TikTok, Facebook or Google Ads is "hot right now" isn't a marketing strategy), having no clear strategy (doing SEO, posting on social media and running ads with nobody able to explain how those activities connect to revenue), stopping campaigns too early, not understanding the customer's pain points, and only marketing when revenue drops.
That last one causes enormous problems: things are busy, so marketing stops; three months later enquiries slow down; the business panics and suddenly wants marketing to produce immediate customers. That's not sustainable.
This is probably the biggest thing I would change about how small businesses think about their marketing budget. Don't treat marketing as something you turn on when you're quiet — treat it as an ongoing business function. When business is strong, continue building your reputation, your reviews, your website, your Google visibility, your audience, your customer data and your content. Then when demand changes, you're not starting again from zero. The businesses with the strongest marketing foundations usually don't wait until the phone stops ringing before thinking about where the next customer will come from.
There will always be another platform, another AI tool, another tactic somebody says every business "must" use. Ignore most of that noise. The strategy for your business should come from your customers: understand why they choose you, why they choose your competitors, what frustrates them, what makes them trust a business, where they search, what questions they ask, and what stops them enquiring. Then choose your marketing channels — not the other way around.
If you're an Australian small service business, I would use this framework rather than looking for one magic percentage.
Focus. Don't attempt five channels. Fix the basics that have the best chance of improving visibility and conversion — for many local businesses that could mean the website, Google Business Profile and review generation.
You have more room to build a structured foundation. Prioritise the activities with the clearest relationship to customer acquisition. Don't assume this amount buys comprehensive SEO, content, social media, website work and advertising simultaneously.
This is where I generally feel more comfortable designing a sustained marketing programme for a small service business. There's room for strategy, ongoing improvement and testing. Paid media can then be added separately based on the market and opportunity.
Set the budget from the economics of the campaign rather than an arbitrary number. Look at likely click costs, conversion rates, customer value and available search demand. For some businesses, $30 a day may provide a sensible starting test; for others, it won't be enough.
Small businesses often ask me how much they should spend because they want certainty. I understand that. But the number alone cannot give you certainty. A $5,000 budget with no strategy can disappear remarkably quickly. A smaller budget used to fix the right bottleneck can produce much more value.
That's why I don't start by asking, "How much can we spend?" I start with, "What is stopping this business from getting more of the right customers?" Sometimes it's traffic. Sometimes it's poor local visibility. Sometimes it's trust. Sometimes it's the website. Sometimes there simply isn't a clear reason to choose the business over its competitors. Find that first. Then decide where the money goes.
For many established Australian service businesses, allocating around 5–6% of revenue to marketing isn't unusual in my experience, although the right figure varies considerably by business. If you're serious about growth, I generally prefer to see at least $1,000 per month available and, where possible, around $2,000 or more before paid advertising. But I wouldn't increase the budget simply for the sake of spending more.
Research the market. Understand the customer. Fix your foundations. Choose the right channels. Then invest consistently for long enough to learn what actually works. At OZ Media Digital, that's how we approach marketing for local service businesses across Hornsby and the North Shore.
Unsure how much your business should be spending, or currently paying for several marketing activities without knowing what's actually generating customers? Book a free strategy session and we'll look at your current marketing, your local competition, your customer journey and your available budget, then identify where your next marketing dollar is most likely to make a difference.
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