Paid acquisition

Ad Budget Calculator

Estimate clicks, orders, gross revenue and contribution profit from a paid acquisition budget.

Paid acquisition

Ad Budget Calculator

Use this to model small experiments for search, social or sponsor placements before raising the budget.

Monthly ad budget$3000Total paid media spend.Average CPC$1.8Average cost per click.Site conversion rate2.4%Share of clicks that become orders.Average order value$89Average revenue per order.Gross margin62%Revenue left after direct product or delivery cost.

How to use this calculator

Start with conservative inputs, copy the result, then test a best-case and worst-case version. For production decisions, compare the estimate against actual accounting, analytics and payment data.

Formula

Ad budget planning starts with traffic, then moves to orders and contribution profit. The important question is not just how much revenue appears, but whether gross profit covers the media spend.

Formula

Clicks = budget / CPC. Orders = clicks * conversion rate. Contribution = revenue * gross margin - budget.

Example

Paid search test budget

A team tests $3,000 in ads at a $1.80 CPC, 2.4% conversion rate, $89 order value and 62% gross margin.

Budget: $3,000
Average CPC: $1.80
Conversion rate: 2.4%
Gross margin: 62%

The example estimates about 1,667 clicks, 40 orders and negative contribution until conversion or order value improves.

FAQ

Is ad budget the same as total marketing cost?

No. Ad budget is media spend. Creative, tools, agency fees and team time should be modeled separately if they are material.

Why include gross margin?

Revenue alone can hide losses. Gross margin estimates how much revenue remains to pay for ads after direct costs.

What should I test first?

Start with conservative CPC and conversion assumptions, cap spend, and compare the estimate with actual platform and payment data.

Important limits

Paid acquisition models can fail quickly if CPC rises or conversion quality drops.
Start with capped tests before scaling spend.