Ad Budget Calculator
Set a revenue goal and work backwards through your real funnel — average deal value, close rate, landing page conversion rate, CPC — to the ad budget it actually implies. Not a generic "spend 5-10% of revenue" guess.
Your funnel (illustrative example pre-filled — replace with your own numbers)
How the calculation works, step by step
| Step | Formula | Why |
|---|---|---|
| Customers needed | Revenue goal ÷ average deal value | How many sales hit the target |
| Leads needed | Customers needed ÷ close rate | How many leads produce that many customers |
| Clicks needed | Leads needed ÷ landing page conversion rate | How many clicks produce that many leads |
| Ad budget | Clicks needed × CPC | What buying that many clicks costs |
Two useful numbers fall out of the same math for free: implied CPL (budget ÷ leads needed) and implied CAC (budget ÷ customers needed) — worth comparing against what you're actually seeing in your account. If your real CPL or CAC is higher than these implied figures, one of your funnel rates is optimistic.
Why "spend X% of revenue" is the wrong starting point
The generic advice — spend 5 to 10 percent of revenue on marketing — treats every business as if it converts the same way. It doesn't ask what a customer is worth, what a click costs, or how many leads become customers. Two businesses with identical revenue and identical "10% of revenue" budgets can need completely different actual spend once you look at their real conversion rates — one might need a fraction of that budget, the other several times more.
This tool starts from the goal and the funnel instead, so the number you get is specific to your business rather than a rule that happens to apply to nobody in particular.
A worked example
A business wants ₹10,00,000 in monthly revenue from paid ads, at a ₹20,000 average deal value, a 20% lead-to-customer close rate, a 10% landing page conversion rate, and a ₹25 average CPC.
- Customers needed = ₹10,00,000 ÷ ₹20,000 = 50.
- Leads needed = 50 ÷ 20% = 250.
- Clicks needed = 250 ÷ 10% = 5,000.
- Ad budget = 5,000 × ₹25 = ₹1,25,000.
- Implied CPL = ₹1,25,000 ÷ 250 = ₹500. Implied CAC = ₹1,25,000 ÷ 50 = ₹2,500.
Every number traces back to a rate this business actually knows about itself — not a percentage borrowed from a blog post about a different business.
What this number is, and isn't
If your funnel rates are guesses rather than measured numbers, that's the first thing to fix — pull your actual landing page conversion rate and close rate from the last 90 days before trusting the budget this produces. Our conversion rate guide covers where to find that number.
Where to go next
Once you have a budget number, the CAC calculator checks whether the resulting acquisition cost is actually sustainable against customer lifetime value. Cost per lead and cost per click cover the two rates this tool leans on most.
The full picture sits in the performance marketing guide. Our other free calculators are the ROAS calculator and the CPM calculator.
Frequently asked questions
How do I set an ad budget without historical data?
Use industry-plausible starting estimates for close rate and landing page conversion rate (this tool defaults to 20% and 10% as an illustrative example, not a benchmark), run a small test budget for two to four weeks, then replace the estimates with your own measured numbers and recalculate. The first number is always a floor to test against, not a final answer.
Why is my implied budget different from "10% of revenue"?
Because that rule ignores your actual conversion rates and cost per click. A business with a strong landing page and cheap clicks can hit its revenue goal on far less than 10%; a business with a weak funnel or expensive clicks can need far more. This tool tells you which situation you're actually in.
What if my close rate or conversion rate changes over time?
Recalculate. This isn't a one-time number — funnel rates drift with the market, the offer, the season and the creative. Treat the output as current-best-estimate, not a fixed annual budget.
Does this account for seasonality?
Not automatically — enter figures for the specific period you're planning. If November's CPC or conversion rate looks nothing like August's in your account, run the calculator with November's numbers rather than reusing an annual average.
Is my data sent anywhere when I use this calculator?
No. Everything is calculated in your browser as you type. Nothing you enter is sent to us or stored — refresh the page and it's gone.
Know your revenue goal. Not sure about the funnel rates?
Send us your target and whatever data you have. We'll tell you honestly whether your funnel rates are realistic and what budget they actually imply.