While both teams' seamers proved expensive at JB Marks Oval on Tuesday, the spinners proved tougher to get away.
Tweakers Tabraiz Shamsi (2-29) and Keshav Maharaj (2-37) turned the match South Africa's way by tying down the Aussies in the middle overs.
Australia rested No.1 spinner Adam Zampa, while Ashton Agar missed the match with soreness.
Debutant Tanveer Sangha was Australia's sole specialist turner and proved expensive (1-64 off eight overs), outbowled by part-timer Travis Head (2-39 off 10 successive overs).
"Ash wasn't available for selection today, that made it tough to play two spinners," said Marsh, who conceded when interviewed post-match by South African great Shaun Pollock that he "probably misread it (the pitch) a little bit".
"Zamps has got a big workload coming up so today was a good opportunity to rest him and give Tanveer an opportunity.
"I thought Travis Head bowled exceptionally well.
"The ball spun in the second innings and their spinners were very good."
After Aiden Markram's classy 102 not out underpinned the Proteas' imposing 6-338, Australia were 1-140 in reply before a disastrous batting collapse of 8-60 saw them rolled for 227 and suffer their third heaviest defeat in ODIs against South Africa.
After putting on 79 for the first wicket with Head (38) and 61 for the second wicket with Marsh (29), David Warner looked set for back-to-back tons before his chaotic run out for 78 swung the match South Africa's way.
Warner set off for a single, slipped over as he lost his right shoe, dropped his bat and fell short diving at the non-striker's end, beaten by Maharaj's direct hit.
The following over, in-form Marnus Labuschagne (15) was stumped by Quinton de Kock after being beaten by a magnificent wrong 'un from Shamsi.
South Africa's massive win reduced Australia's series lead to 2-1 ahead of fixtures at Centurion on Friday and at the Wanderers on Sunday.
Marsh is hopeful allrounder Cameron Green will be available for the last game after he was concussed by a Kagiso Rabada in the series opener.
Australia are also keen to give South Australian speedster Spencer Johnson a debut ODI cap should he over his minor hamstring issue.
"Hopefully Greeny will be able to play maybe the last game," Marsh said.
"I'm not sure how many more games he's got with the new concussion protocols but we certainly won't be taking any risks with that kind of stuff.
"Spencer is hopefully tracking well to play one of those two games.
"He's early on in his international career and we've got to look after him.
"Hamstrings are something you can't really rush back (from)."
In better news for Australia, Steve Smith's preparations for the upcoming World Cup are underway.
He posted an Instagram story earlier in the day saying the wrist injury he picked up in the Ashes 'feels good' again after completing his first net session since the England tour.
"A good first hit out today in the nets, finally my wrist is starting to feel good," Smith said in the video.
"It's been annoying for a while. I hit them good today so hopefully some positive signs for what's coming up."
