Ad Budget Calculator
Plan your advertising budget based on real numbers. Enter your revenue goals, average order value, conversion rate, and CPC to get a data-driven budget recommendation.
How to Plan Your Ad Budget
Set Your Goal
Enter your monthly revenue target and average order value.
Add Your Metrics
Input your conversion rate and average cost per click from your ad platforms.
Get Your Budget
See your recommended daily and monthly ad spend, plus estimated ROAS and CPA.
Frequently Asked Questions
How much should I spend on advertising?
Most businesses allocate 5-15% of their revenue to advertising. For ecommerce businesses focused on growth, 15-30% of target revenue is common. The ideal budget depends on your profit margins, customer lifetime value, and growth goals. Use this calculator to find the exact number based on your metrics.
How is the recommended budget calculated?
The calculator works backward from your revenue goal: (1) Revenue Goal ÷ Average Order Value = Orders Needed, (2) Orders Needed ÷ Conversion Rate = Clicks Needed, (3) Clicks Needed × Cost Per Click = Monthly Budget. This gives you the minimum ad spend needed to hit your revenue target at your current performance metrics.
What is a good CPC for my industry?
Average CPCs vary widely: Facebook Ads ($0.50-$2.00), Instagram Ads ($0.70-$3.00), Google Search ($1-$5), TikTok Ads ($0.30-$1.50). Ecommerce typically sees $0.50-$2.50 CPC on social platforms. Your actual CPC depends on targeting, ad quality, competition, and seasonality.
Should I start with the full recommended budget?
No. Start with 30-50% of the recommended budget for the first 2-4 weeks to test and learn. Once you've identified winning ad sets and audiences, gradually scale to the full budget. This approach reduces risk and lets you optimize before committing larger spend.
How can I reduce my required ad budget?
Lower your required budget by: (1) improving ad creative to reduce CPC, (2) optimizing landing pages to increase conversion rate, (3) increasing average order value through bundles and upsells, and (4) retargeting warm audiences who convert at higher rates.
What conversion rate should I use?
Average ecommerce conversion rates are 1-3% from paid traffic. Use your actual conversion rate from analytics if available. If you're starting fresh, use 1.5-2% as a conservative estimate. Landing page optimization can push this to 3-5%+ over time.
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