How to use the ad budget for target revenue calculator
This calculator runs backwards. Instead of predicting revenue from a budget, it takes a target revenue and a target ROAS and backs out the spend required. The formula is required ad spend = target revenue ÷ target ROAS. Target ROAS is entered as a percentage of spend, so 500% means five dollars of revenue per dollar spent, and a $100,000 revenue target needs $20,000 in spend. Target revenue, target ROAS and average order value are the inputs; spend, conversions, CPA and clicks are results.
Add average order value and you get the number of conversions the revenue target requires, then the allowable CPA — required spend divided by those conversions. If the allowable CPA sits below what you currently pay per conversion, that ROAS target is out of reach at today's efficiency.
Add a conversion rate for required clicks, and an average CPC to price those clicks and compare against the required spend. A positive difference means the budget falls short at current click prices. Conversions and clicks are rounded up, and the labels say so when rounding applied.
Frequently asked questions
This field is a percentage. For a 5x target, enter 500. Entering 5 would compute spend at twenty times revenue and every result would be wrong.
Lower the ROAS target, raise conversion rate or order value, or bring CPC down. The calculator does not recommend which lever to pull; it only shows how the three relate.