How to set an ad budget
The sound way is to start from the revenue you want, not from the amount you are willing to spend. Target revenue and target ROAS give the budget.
Ad budget calculator
Work backwards from your revenue target: see the budget, orders and clicks that target requires.
Result
- Monthly ad budget needed
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- Orders needed
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- Clicks needed
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- Ad cost per order
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- Affordable cost per click
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This tool is a simple scenario calculation, not a forecast or a guarantee.
How is it calculated?
Formula
Budget = target revenue ÷ target ROAS. Orders = revenue ÷ order value. Clicks = orders ÷ conversion rate. Affordable CPC = budget ÷ clicks.
How to read the result
If the affordable cost per click is below the real cost in your sector, the target is too ambitious or conversion rate and order value need to rise.
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