{
  "slug": "ad-budget",
  "title": "Ad Budget Calculator",
  "heading": "Ad Budget Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/ad-budget",
  "summary": "Budget required to hit a revenue or lead target profitably.",
  "description": "Work backwards from the target, not forwards from the budget. Your allowable CPA falls straight out of order value and margin, and that number sets the ceiling on every bid.",
  "formula": "Budget = Target conversions × CPA; allowable CPA = AOV × margin ÷ target ROAS multiple.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=ad-budget",
  "inputs": [
    {
      "id": "target",
      "label": "Revenue target",
      "kind": "number",
      "hint": null,
      "default": 120000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "aov",
      "label": "Average order value",
      "kind": "number",
      "hint": null,
      "default": 140,
      "unit": "$",
      "min": 1,
      "max": null
    },
    {
      "id": "margin",
      "label": "Gross margin",
      "kind": "number",
      "hint": null,
      "default": 55,
      "unit": "%",
      "min": 0,
      "max": 100
    },
    {
      "id": "cvr",
      "label": "Landing page conversion rate",
      "kind": "number",
      "hint": null,
      "default": 2.4,
      "unit": "%",
      "min": 0.01,
      "max": 100
    },
    {
      "id": "cpc",
      "label": "Average cost per click",
      "kind": "number",
      "hint": null,
      "default": 1.9,
      "unit": "$",
      "min": 0.01,
      "max": null
    },
    {
      "id": "payback",
      "label": "Target profit share of margin kept",
      "kind": "number",
      "hint": null,
      "default": 40,
      "unit": "%",
      "min": 0,
      "max": 100
    }
  ],
  "outputs": [
    {
      "id": "budget",
      "label": "Required ad budget",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "cpa",
      "label": "Implied cost per acquisition",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "allowable",
      "label": "Allowable CPA",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "orders",
      "label": "Orders needed",
      "format": "number",
      "hint": null,
      "primary": false
    },
    {
      "id": "clicks",
      "label": "Clicks needed",
      "format": "number",
      "hint": null,
      "primary": false
    },
    {
      "id": "roas",
      "label": "Implied ROAS",
      "format": "decimal",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Revenue target: 120000 $",
      "Average order value: 140 $",
      "Gross margin: 55 %",
      "Landing page conversion rate: 2.4 %",
      "Average cost per click: 1.9 $",
      "Target profit share of margin kept: 40 %"
    ],
    "outputs": [
      "Required ad budget: $67,857.14",
      "Implied cost per acquisition: $79.17",
      "Allowable CPA: $46.20",
      "Orders needed: 857.14",
      "Clicks needed: 35,714.29",
      "Implied ROAS: 1.77"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter revenue target ($).",
      "Enter average order value ($).",
      "Enter gross margin (%).",
      "Enter landing page conversion rate (%).",
      "Enter average cost per click ($).",
      "Enter target profit share of margin kept (%).",
      "Read your required ad budget on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "target": 72000,
        "aov": 85,
        "margin": 33,
        "cvr": 1.44,
        "cpc": 1.14,
        "payback": 25
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "target": 120000,
        "aov": 140,
        "margin": 55,
        "cvr": 2.4,
        "cpc": 1.9,
        "payback": 40
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "target": 192000,
        "aov": 225,
        "margin": 88,
        "cvr": 3.84,
        "cpc": 3.04,
        "payback": 65
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How does the ad budget calculator work?",
      "a": "Work backwards from the target, not forwards from the budget. Your allowable CPA falls straight out of order value and margin, and that number sets the ceiling on every bid. The underlying maths is: Budget = Target conversions × CPA; allowable CPA = AOV × margin ÷ target ROAS multiple."
    },
    {
      "q": "What do I need to enter?",
      "a": "6 values: revenue target, average order value, gross margin, landing page conversion rate, average cost per click, and target profit share of margin kept. Each field starts with a sensible default, so you can change one number at a time and watch the result move."
    },
    {
      "q": "What does the required ad budget result mean?",
      "a": "It is returned as a money amount in US dollars and updates live as you edit the inputs, so you can compare two or three versions of a scenario in a few seconds."
    },
    {
      "q": "Is this calculator free, and do I need an account?",
      "a": "Yes, it's free, and no account is required. Nothing you type is stored on our servers — the maths runs entirely in your browser."
    },
    {
      "q": "How accurate is the result?",
      "a": "It applies the standard formula exactly, so the arithmetic is precise. Results are estimates before tax, fees, and inflation unless an input explicitly covers them."
    },
    {
      "q": "Who is this tool for?",
      "a": "It's built for anyone comparing money scenarios before committing — budgeting a payment, sanity-checking a quote, or seeing what a change in rate or term actually costs."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/webinar-funnel",
    "https://www.revenuelab.fyi/toolbox/influencer-roi"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Ad Budget Calculator (https://www.revenuelab.fyi/toolbox/ad-budget)"
}