How Much Should I Spend on Digital Marketing? – Ad Budget Calculator

"How much should I spend on my digital marketing campaigns?"

It’s a question on the minds of many decision-makers for e-commerce brands. When putting together a marketing strategy, it is important to crunch the numbers and know what your targets are and what to expect.

Make sure your campaign succeeds by calculating some key metrics –  below you’ll find descriptions of key metrics that e-commerce decision makers must observe and monitor throughout campaigns. In addition to these metrics, use the Advertising ROAS Calculator in this article to help you budget an appropriate ad spend and forecast the results you might achieve.


Return on Ad Spend (ROAS)

Return on ad spend (ROAS) is used to determine if you’re generating enough revenue to justify the expense of your digital marketing activities.

ROAS is widely considered the most important metric of campaign success for e-commerce brands as it is easy to understand and determines whether a campaign is profitable (or not).

Return on ad spend is calculated as follows:

ROAS = Revenue attributable to ads / Cost of ads

Break-Even Return on Ad Spend (ROAS)

Considering this, calculating your break-even ROAS is always a great starting point for your e-commerce campaigns. You can calculate your break-even ROAS as follows:

Break-Even ROAS = 1 / Average Profit Margin %

Use the tool below to calculate your break-even ROAS

Break-Even ROAS Calculator

ROAS Calculator

Calculating Your Campaign Metrics

Once you have a sense of your break-even ROAS, you can start to plan for your campaign success by estimating key metrics of your campaign.

Advertising ROAS Calculator

Advertising ROI Calculator
Not sure? Use some industry averages to help you estimate: Food/Alcohol €0.40-0.80, Jewellery €0.60-0.80, Clothing & Apparel €0.50-0.70, Beauty & Fitness €1.70-1.90, Financial Services €3.50-4.00, Legal Services €6.00-8.00
Not sure? Use some industry averages to help you estimate: Fashion/Clothing Accessories 1.6-2%, Food & Beverage 1.6%-2%, Health & Wellbeing 2.8-3.2%

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Other Key Metrics to Measure

ROAS is a key metric for judging the success of a campaign, however, other key metrics are often overlooked or ignored in its favour. ROAS should be used alongside the following crucial metrics to paint a clear picture of the long-term trajectory of a business’ marketing profitability:


Customer lifetime value – The ongoing value of each customer to your business.

Customer retention – The percentage of customers who continue to buy from you.

ROAS will measure the profitability of the duration of the campaign, but most businesses are in their industry for the long term. As a result, it can be extremely profitable for a business to advertise under their break-even ROAS if they are successfully able to retain a base of loyal customers. 
Organic social media content is an excellent tool to create a community around the customers who are enthusiastic about your offerings. And now, more than ever a strong email list is once again a focus focus for many brands with privacy taking centre stage.

Build a ROI-Maximising Digital Marketing Campaign

If you are in planning a digital marketing strategy for your brand. Learn more about how Paid Social Advertising and Creative Content with Stacks Creative could maximise the ROI of your campaign.

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