Ad Budget Planner
Two modes: start from a budget and forecast results, or start from a revenue goal and get the budget.
Budget-first versus goal-first planning
Most advertisers start with an arbitrary number — "we can spend $5,000 this month" — and then hope. Goal-first planning inverts it: decide the revenue you need, divide by order value to get required orders, divide by conversion rate to get required clicks, and multiply by CPC to get the budget. This makes the assumptions visible, and shows you which lever actually matters.
The maths
- Required orders = revenue goal ÷ average order value
- Required conversions = orders ÷ close rate
- Required clicks = conversions ÷ conversion rate
- Required budget = clicks × CPC
Notice that halving your CPC halves the budget — and so does doubling your conversion rate. Improving the landing page is usually cheaper than buying more traffic, which is why conversion rate optimisation tends to beat budget increases.
Pacing: are you on track this month?
Divide the monthly budget by the days in the month for a daily target. If you have spent 70% of the budget by the 10th, you will run out before the month ends and lose the days with the best conversion rates. Conversely, underspending by mid-month usually means bid caps or budget limits are too tight.
How much should a business spend on ads?
Common rules of thumb suggest 5-12% of revenue for established businesses and up to 20% for aggressive growth, but the only correct answer comes from unit economics: spend as much as you can while CAC stays below what a customer returns within your payback window. If every dollar returns more than a dollar within your cash tolerance, the constraint is cash flow, not a percentage.