Input Your Numbers
Calculate Your Ad Budget
Common Questions
Frequently Asked Questions
How much should I spend on ecommerce advertising?
A general benchmark is 15-25% of revenue for healthy ecommerce brands. High-margin brands (60%+ gross margin) can sustain 25-30% ad spend ratios. Low-margin brands (under 30% gross margin) should stay closer to 10-15%. The right amount depends on your revenue target, expected ROAS per channel, and how much organic revenue already covers your sales target.
What percentage of revenue should go to ad spend?
For most ecommerce brands, 15-25% of revenue is a healthy range. Under 15% is excellent if you can still hit growth targets. Over 30% starts compressing profits significantly unless you have very high margins or you are in aggressive acquisition mode with strong LTV. Calculate your break-even ad spend percentage by dividing your gross margin by your target ROAS - if your margin is 50% and ROAS is 4x, ad spend can be up to 50%/4 = 12.5% of revenue at breakeven.
How do I split my ad budget across Meta, Google, and TikTok?
Start by understanding each platform's typical ROAS for your category. Google brand campaigns usually deliver the highest ROAS but have limited scale. Meta provides the most scale for prospecting but requires strong creative. TikTok works well for impulse purchases and younger demographics. A common starting point is to allocate 40-50% to your best-performing channel, 30-40% to a secondary channel, and 10-20% to test channels. Adjust based on actual ROAS data after 4-6 weeks.
What is a good ROAS for ecommerce ads?
A good ROAS depends entirely on your gross margin. Use this formula: break-even ROAS = 1 / gross margin percentage. With 50% gross margin, you break even at 2x ROAS. With 30% margin, you need 3.3x ROAS just to break even. Aim for 20-50% above your break-even ROAS for a healthy profit margin. Industry averages vary widely - Google search ads often deliver 4-6x for branded campaigns, Meta Ads typically deliver 2-4x for prospecting, TikTok 2-3x for impulse categories.
How do I calculate my maximum cost per acquisition?
Max CPA = Average Order Value / Target ROAS. For example, with a $100 AOV and 3x target ROAS, your max CPA is $100/3 = $33. This is the maximum you can pay to acquire one order while still hitting your ROAS target. For subscription or high-LTV products, you can use 12-month LTV instead of AOV to justify higher CPA spend.
Should I advertise on multiple platforms or focus on one?
Multi-channel advertising is generally more resilient than single-channel. Platform changes, algorithm updates, and regulatory uncertainty can significantly impact any single channel overnight. Starting with one channel until it is consistently profitable makes sense, but once you have a proven ROAS on one platform, diversifying reduces risk and can increase total reach. Multi-channel also creates brand awareness compounding - consumers who see your brand across platforms convert at higher rates.