How much should you spend on ads? A simple budget calculation

"How much should I spend on ads?" is a question we hear in every consultation. The honest answer: it depends on how much you earn from one customer. The good news is you can work it out yourself, on paper, in a few minutes.

Step 1: How much you earn from one customer

We don't care about the product price, but how much of it you keep.

Online store example: you sell a coffee machine for €200. The goods cost you €120, shipping and packaging €10. You keep €70.

Service example: you do bathroom renovations. The average job is €6,000 and you keep €1,500.

Step 2: How much you're willing to pay to win a customer

From what you keep, decide how much you can invest in winning a customer and still make a profit.

• For the coffee machine, maybe €30: you keep €40 profit.
• For the bathroom, maybe €300: still well worth it.

If customers come back (buy repeatedly), you can afford to spend more, because you'll earn on future purchases too.

Step 3: How many people you need to bring in

Not everyone who visits your website buys. Usually only a small percentage of visitors do. If you know what a click costs in your industry and what percentage of people buy, you can estimate what one customer will cost.

Example: a click costs €0.40 and 2 out of 100 visitors buy. For one purchase you need 50 visitors = €20. That's below your €30 limit, so the ads should be profitable.

Step 4: Give the system enough room to learn

Ad platforms (Google, Facebook, TikTok) learn from purchases. When there are too few, they learn slowly and results fluctuate. That's why the budget can't be too small.

A simple rule: the budget should allow for at least a few dozen conversions a month. If that's unrealistic at first, start with a goal that happens more often (such as add-to-cart or a completed form) and switch to purchases later.

Step 5: Start with a test, then scale

1. The first month is a test. You find out what a customer really costs.
2. If it's below your limit, increase the budget gradually, for example by a fifth each week.
3. If it's above the limit, don't pour in more money. First fix the ad, the website or the offer.

Frequently asked questions

Is €5 a day enough? For a test, yes, but results will be slow and uneven. For stable results you need more.

Should I put everything into one channel? At first, yes. Focus where your customers are. Expand only once one channel works.

What about agency fees? They're separate from the ad budget. The budget goes directly to Google or Facebook; the agency is paid for its work.

Summary

You can calculate your ad budget: find out how much you earn per customer, how much you're willing to pay for one and how many people you need to bring in. Start with a test, measure, and only add money where it pays back. If you'd like to go through the numbers with us, the consultation is free.