Ad budget calculator

The ad spend a monthly revenue target really takes, and whether it makes money.

The target

The sales you want your ads to bring in each month, not your total store revenue.
$
Return on ad spend: revenue from ads divided by what you spent on them. Use your last 90 days, not your best month.
x

Your store

What a customer pays on a typical order, after discounts. A month’s revenue divided by its orders gives you this.
$
The share of visits that end in an order: orders divided by sessions, from your store analytics.
%
What you keep from each order after product cost, shipping and fees, as a percentage of the order. Our profit margin calculator works it out.
%

How much should you spend on ads?

Most ad budgets are inherited. They are last quarter’s number plus a bit, a percentage of revenue someone read was normal, or whatever the account was spending when the previous agency left. None of those have anything to do with what the business is trying to do next, which is why the budget conversation so often ends in a stalemate: the founder wants to spend less and grow more, the media buyer wants to spend more to find out what works, and neither has a number the other can argue with.

Monthly ad budget = revenue target ÷ expected ROAS

Working back from a revenue target changes the conversation, because every figure on the page is then a consequence of a decision the business has already made. You want $150,000 a month from ads. At the ROAS the account has actually delivered, that costs $50,000. That spend has to buy 1,667 orders at $30 each, and the site has to turn 83,000 sessions into those orders. Now the question is no longer “is $50,000 too much?” but “can this account hold a $30 cost per order at that volume, and if not, which number moves?” That is a question with an answer.

From the target to the budget, and back to the margin

Four steps, each worked through on the calculator’s example: $150,000 a month from ads at 3x, a $90 order, a 2% conversion rate, 50% margin per order.

The budget

If every dollar of ad spend returns three dollars of revenue, then $150,000 of ad-driven revenue needs $50,000 of spend. The daily figure is that spread over an average month. The ROAS you enter is the most important assumption on the page, which is why the tip says to use a trailing 90 days rather than a good month.

Example$150,000 ÷ 3.0 = $50,000 a month, about $1,645 a day.

What the budget has to buy

The revenue target divided by your average order value is the number of orders the ads need to produce. The budget divided by those orders is the cost per order the account has to hold, and it is the figure to compare against the CPA in your ad platform today. If your current CPA is well above it, the plan is not realistic at that ROAS, however much you spend.

Cost per order = ad budget ÷ (revenue target ÷ AOV)

Example$150,000 ÷ $90 = 1,667 orders at $30 each. Cost per order is always AOV ÷ ROAS.

What the store has to do

Orders divided by your conversion rate is the sessions the ads must send, and the budget divided by those sessions is the most you can afford to pay for each click. Together they show where the pressure lands: a low conversion rate means a lot of expensive traffic, and often the cheapest fix for an ad budget is the website it sends people to.

Most you can pay per click = ad budget ÷ (orders ÷ conversion rate)

Example1,667 ÷ 2% = 83,333 sessions, so the plan can pay $0.60 a click.

Whether it is profitable

Add your margin per order and the calculator works out your break-even ROAS, one divided by the margin, and compares it to the ROAS you planned on. A plan that reaches the revenue target at a ROAS under break-even reaches it by losing money, and this is where the page says so.

Profit after ads = revenue × margin per order − ad budget

ExampleBreak-even is 1 ÷ 50% = 2.0x; at 3x the plan keeps $150,000 × 50% − $50,000 = $25,000.

The click is the number to stare at. Sixty cents is under what a click costs on Meta or Google in Australia, so the example plan is buyable only if conversion rate or basket size improves. Lifting conversion from 2% to 2.5% raises the affordable click to $0.75; a $9 bigger basket takes it to $0.66. Neither is an ad account change, and both make the plan real.

Ad spend benchmarks for 2026

What brands spend and what the platforms charge, so you can check a plan against the market before you check it against your margin.

Marketing spend as a share of revenue, 2026
WhoShare of revenue
All companies7.8%
All US companies9.0%
Consumer product companies12.0%
Revenue under US$10M13.3%
Companies under 50 staff16.3%
Revenue US$10–25M17.4%
Mostly online sellers18.6%
Online-only sellers18.8%
Large online retailers6.5–14%

The more of a business that sells online, the larger the share: companies selling mostly or only online spend about 19% of revenue on marketing, more than double those with little online trade. A store that is still buying most of its customers should expect to sit at the top of the table, and to come down it as repeat and organic sales grow. What the platforms charge, as medians across thousands of online brands:

Median cost per thousand impressions, cost per acquisition and ROAS by ad platform, August 2025 to July 2026, US dollars
PlatformCPMCPAROAS
Meta$15$391.9x
Google$15$283.3x
TikTok$4$171.5x

Meta and Google CPMs both rose about 13% in the year to July 2026 while TikTok’s fell a quarter; Google’s cost per order rose 10% and its ROAS slipped. Australian Meta auctions run about a fifth cheaper than the global average, and the median click across these platforms works out under US$1. Australian advertisers spent $19.8 billion online in the year to June 2026, up 14%, with social video up almost 30%, so none of this is getting cheaper.

One floor applies whatever the plan: Meta wants about 50 purchases per ad set in seven days to optimise properly, which puts the daily budget at about seven times the cost per order. At a $30 cost per order that is about $215 a day per ad set before the account can learn anything.

How to make an ad budget realistic

Seven things that decide whether the plan on the plate happens in the account. Most of them are not media buying.

1.Plan on the ROAS you have, not the one you want

Use the trailing 90 days from your attribution tool, not Ads Manager’s best month. Spend does not scale at a constant return: as budgets rise the platform reaches past the easiest buyers, creative fatigues faster and the ROAS drifts down. The ROAS calculator tells you the number the ads must hit; this page tells you what it costs to hit it.

2.Clear the learning floor

Below about 50 purchases a week per ad set, Meta cannot optimise and your cost per order climbs. Fewer, bigger ad sets beat many small ones, and a plan that spreads $215 a day across six ad sets has already failed.

3.Budget the creative with the media

Budget without fresh concepts to test buys fatigue. Doubling spend usually needs twice the creative, and a steady supply of genuinely different concepts is what holds the ROAS as the budget climbs. That is the point of Ad Creatives running beside Paid Advertising.

4.Lift the conversion rate before the budget

Sessions are the expensive part. Half a point of conversion in the example takes the affordable click from $0.60 to $0.75, and a slow or confusing product page can double the cost of every plan on this page. The conversion rate calculator prices the lift.

5.Grow the basket

A bigger average order means fewer orders for the same revenue, fewer sessions to buy and a higher affordable click. Bundles and a free-shipping threshold just above today’s basket are cheaper than media; the AOV calculator shows what they are worth.

6.Split the budget by what each platform does

One budget, several auctions. Meta usually carries the volume, Google catches the demand it creates, and TikTok earns its share when new customers are the goal. Each runs at a different ROAS, so the blended figure you plan on should reflect the mix.

7.Check the margin, then check it again

A $50,000 budget that hits its revenue target at 3x looks like a win in the ad platform and is a loss on the P&L if the margin per order is 30%. Checking the planned ROAS against break-even before the money is spent is cheap; finding out afterwards is not. The profit margin calculator gives you the margin to enter here.

Ad budget questions, answered

How much should an eCommerce brand spend on ads?
As much as returns above your break-even ROAS, and no more than your margin and cash flow can carry while it does. There is no sensible percentage of revenue, because a brand with a 70% margin per order can profitably spend far more of its revenue on ads than one at 35%. Consumer product companies average about 12% of revenue on marketing and businesses that sell only online about 19%, but start from the revenue you need, the ROAS the account has actually delivered and your margin, as this calculator does.
What ROAS should I plan on if I have never run ads?
Plan on your break-even ROAS for the first two to three months and treat anything above it as upside. A new account has no conversion history, no proven creative and no tracking data, and the first phase is paid learning. Work out your break-even on the ROAS calculator, make sure the budget covers enough orders for the platform to learn from (on Meta, about 50 purchases a week per ad set), and revise the plan once you have 60 to 90 days of real numbers.
What is the minimum budget worth running on Meta?
Enough to buy about 50 purchases a week in each ad set, which is the volume Meta says it needs to optimise. Fifty purchases a week works out at about seven times your cost per order each day, so a $30 cost per order means about $215 a day per ad set. Below that the account sits in the learning phase, costs per result run higher, and the results tell you less than they appear to. One well-funded ad set beats four starved ones.
Should the budget include agency fees and creative?
The figure this calculator gives you is media spend, the money paid to the platforms, because ROAS is measured against that. Fees, creative production and tools sit on top and should be checked against the profit after ad spend: if the plan leaves $25,000 and the fees around it are $8,000, the real surplus is $17,000. The MER section of the ROAS calculator and the CAC calculator both take the full cost into account.
Why does my ROAS drop when I increase the budget?
Because the platform spends the first dollars on the people most likely to buy and the next dollars on people a little less likely. More spend reaches further into the audience, the same creative is shown more often to the same people and wears out faster, and the auction gets more competitive at scale. The brands that hold ROAS while scaling are the ones feeding the account enough new creative to keep finding new buyers, which is why a budget increase should always come with a creative plan.
Should I set the budget daily or monthly?
Plan it monthly and set it daily. The monthly figure is what the revenue target implies and what the finance side signs off; the daily figure is what the platforms run on, and dividing by 30.4 rather than 30 keeps the two in step across the year. Hold the daily budget steady for at least a week before judging it, because every change resets the learning, and move it in steps of 20% or so rather than doubling it overnight.

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