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TOOL 01 / PLANNING

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Ad Budget Calculator

Revenue goal in, required budget out. Built on your numbers, not industry averages.

€
€
%
€
Required budget / mo — —
Clicks needed — at your CPC
Orders needed — —
Ad-to-sales ratio — budget ÷ revenue
Budget pressure

How the ad budget formula works

The calculator works backwards from revenue, the direction most brands never plan in:

orders = revenue goal ÷ AOV
clicks = orders ÷ conversion rate
budget = clicks × CPC

Everything on your ad account is downstream of these four numbers. If the output budget looks impossible, the answer is not "spend more". It is one of three levers: raise AOV (bundles, thresholds), raise conversion rate (offer, landing page, audience quality), or lower CPC (creative CTR, placements, query hygiene).

Reading the outputs

The ad-to-sales ratio is your budget as a share of the revenue it should produce. Under 20% is a healthy structural position for most ecommerce P&Ls. Between 20% and 35% works only with solid gross margins or strong repeat purchase. Above 35% you are usually buying revenue, not profit.

The implied ROAS is the return the plan assumes. Compare it against your break-even ROAS, not against platform benchmarks. If the implied ROAS is below your break-even, the plan loses money before it starts.

Where people get it wrong

The most common mistake is using the store-wide conversion rate. Paid traffic converts differently from your blended average, usually worse for cold campaigns. The second mistake is treating the output as a ceiling. It is a floor: attribution leaks, returns and untracked orders mean reality needs 10 to 20% more headroom.

FAQ

How much should I spend on ads per month?
Work backwards from the revenue you want. Divide your revenue goal by your average order value to get the orders you need, divide orders by your conversion rate to get the clicks you need, and multiply clicks by your average CPC. That number is your required budget. Anything else is guessing.
What is a good advertising budget for ecommerce?
Healthy ecommerce brands typically run an ad-to-sales ratio between 10% and 25% of revenue. Above 35% your margins are usually underwater unless you have strong repeat purchase behavior. The calculator flags your ratio automatically.
Should I use my store conversion rate or my ads conversion rate?
Use the conversion rate of paid traffic specifically, not your blended store rate. Paid traffic usually converts below your store average because it includes colder audiences. If you don't know it, check GA4 filtered by paid sessions, or start with 60 to 70% of your store rate.
Why is my real budget always higher than the calculator says?
The formula assumes every click is measured and every order is attributed. Reality leaks: tracking loss, view-through behavior, returns. Treat the output as your floor, then add 10 to 20% margin of safety.
Does this work for lead generation too?
Yes. Replace average order value with your revenue per lead (lead-to-customer rate times customer value) and the same math holds.

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