Ad Budget Calculator
Ad budget worked backwards from a revenue target. The test is not whether the campaign returns more than it costs, but whether the gross profit per order exceeds the cost of acquiring it.
Also called: marketing budget calculator, ppc budget.
$1,636,363.64 to reach $5,000,000, needing 90,910 clicks for 2,000 orders. Your cost per acquisition is $818.18 against $1,125.00 of gross profit, so the campaign makes money on the first order.
How this is calculated
The chain runs target revenue, orders, clicks, spend. What makes it useful is the last comparison: cost per acquisition against gross profit per order, not against revenue per order. A campaign returning three times its spend on a fifteen percent margin is losing money, and comparing against revenue hides that.
work backwards from the revenue target through orders and clicks to spend- R
- Revenue target
- c
- Conversion rate
Method and limits
What it assumes
- Conversion and click cost hold as spend scales, which they usually do not.
What it deliberately does not model
- Cost per click rises as you buy more inventory, so the budget understates at scale.
- It ignores repeat purchase, which is what makes a break-even first order rational.
Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator
Frequently asked questions
- What return on ad spend do I need?
- One over your gross margin. At a forty percent margin, you break even at 2.5, so anything below that loses money regardless of how the headline looks.