Ad Budget Planner
Plan your monthly or quarterly ad budget based on revenue goals, target CPA, and expected conversion rates. Get channel allocation recommendations included.
Budget Planning Calculator
Enter your monthly revenue goal and we'll calculate the required ad budget, expected conversions, and optimal channel allocation.
Target revenue from paid ads
Maximum cost per acquisition
Industry avg: 2-5%
Average revenue per conversion
Check Google Keyword Planner for industry estimates
How to Plan Your Ad Budget Effectively
Setting the right advertising budget is crucial for achieving your revenue goals without overspending. This guide explains how to calculate your optimal ad budget based on your business metrics.
The Goal-Based Budgeting Approach
The most effective way to plan your ad budget is to work backward from your revenue goals:
- Set your revenue target: How much do you want to generate from paid ads?
- Calculate conversions needed: Revenue Goal / Average Order Value
- Determine clicks needed: Conversions / Expected Conversion Rate
- Calculate budget: Clicks x Average CPC (or Conversions x Target CPA)
Monthly vs. Quarterly Planning
Monthly budgets work well for:
- Businesses with quick sales cycles
- Testing new campaigns
- Tight cash flow management
Quarterly budgets are better for:
- Longer B2B sales cycles
- Proper campaign optimization (allows learning period)
- Seasonal planning and adjustment
- More accurate performance forecasting
Channel Allocation Best Practices
How you distribute budget across channels significantly impacts results:
| Channel | % of Budget | Best For |
|---|---|---|
| Search Ads | 40-60% | High-intent conversions |
| Shopping/PMax | 20-30% | E-commerce products |
| Remarketing | 10-20% | Re-engaging past visitors |
| Display/Discovery | 5-15% | Brand awareness, top of funnel |
Key Metrics for Budget Planning
- Target CPA (Cost Per Acquisition): Maximum you can profitably spend per conversion
- Conversion Rate: Percentage of clicks that become customers (industry avg: 2-5%)
- Average Order Value (AOV): Average revenue per transaction
- Average CPC: What you'll pay per click in your industry
- ROAS Target: Minimum return you need from ad spend
Budget Scaling Strategies
Start conservative: Begin with 70-80% of calculated budget to test and learn.
Scale gradually: Increase budget by 15-20% when hitting targets consistently.
Monitor efficiency: If CPA increases when scaling, pause and optimize.
Seasonal adjustments: Plan for 30-50% budget swings during peak/slow seasons.
Common Budget Planning Mistakes
- Too little budget: Under $50/day limits campaign learning and optimization
- No testing budget: Reserve 10-15% for experimenting with new strategies
- Ignoring seasonality: Flat budgets miss opportunities during peak times
- No margin buffer: Plan for 10-20% overspend during optimization
Need Help Planning Your Ad Budget?
Our team creates custom budget plans based on your specific goals, industry, and competitive landscape. Get a data-driven budget recommendation.
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