Ad Budget Calculator
Calculate the required ad spend to hit a revenue target based on ROAS, average order value, and conversion rate.
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How to use this calculator
ROAS (Return on Ad Spend) tells you how much revenue each dollar of ad spend generates. Dividing the revenue target by ROAS gives the required budget. Orders = revenue / AOV; clicks = orders / (conversion_rate/100); impressions = clicks / CTR.
- 1
Enter your monthly or campaign revenue target and the average value of an order.
- 2
Set your landing page conversion rate — find this in Google Analytics or your ad platform.
- 3
Input your ROAS target (e.g. 4 means $4 revenue for every $1 spent).
- 4
The required ad spend tells you the minimum budget needed. Adjust ROAS to model conservative vs optimistic scenarios.
Frequently asked questions
What is ROAS and what is a good target?
ROAS (Return on Ad Spend) is revenue divided by ad spend. A ROAS of 4 means you earn $4 for every $1 spent. A "good" ROAS depends on your margin — a 50% margin business needs at least ROAS 2 to break even; most e-commerce brands target ROAS 3–6.
How do I find my landing page conversion rate?
In Google Analytics 4, go to Reports > Engagement > Landing pages and look at the conversion rate column. In Meta Ads Manager, it is the "Website Purchase Conversion Rate". New campaigns should start with an industry average of 1–3% and refine from real data.
Does this include agency fees or platform fees?
No — this calculator shows media spend only. Add 15–20% on top if you use an agency, and factor in platform management fees separately. Your effective ROAS after fees will be lower than the target ROAS entered here.
What CTR does this calculator assume for impressions?
Impressions are estimated at a 1% CTR, which is a common benchmark for display and social ads. Search ads typically have 3–10% CTR, so required impressions would be lower. Adjust the impressions estimate based on your actual CTR for your channel.
Ad Budget Calculator — Required Spend to Hit Revenue Targets
How to Set a Data-Driven Ad Budget
Most businesses set ad budgets based on what they can afford rather than what they need to hit revenue goals. Working backwards from a revenue target is far more effective. Start with your ROAS target — a number informed by your gross margin — and divide your revenue goal by it to get the exact spend required. If the resulting budget is beyond reach, the calculator reveals that you need to either increase ROAS (better targeting, stronger creatives) or reduce the revenue target for this channel.
Balancing ROAS Target vs Volume
Chasing a very high ROAS (7+) often means restricting your audience too tightly and missing significant revenue volume. Most high-performing e-commerce accounts run profitably at ROAS 3–5 because they balance efficiency with scale. If you are new to paid advertising, start with a ROAS target that covers your blended cost of goods and overhead, then optimise upward. Use the clicks and impressions estimates to sanity-check whether your target audience is large enough to deliver the volume you need.
Learn more from an authoritative source:
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →