“How much budget should we set aside each month?” is the question we get asked most. And most of the answers given are useless: “10% of revenue”, “at least 30,000₺”, “whatever your competitors spend”.
None of those know anything about your business.
A budget is not the money you can spare. It is what acquiring one customer is allowed to cost you. Three things are enough to find that number.
1. Average order value
Divide the last 90 days’ total revenue by the number of orders. Don’t exclude promotional periods — they are real too.
Say it comes out at: 1,400₺
2. Gross profit margin
What is left after product cost, shipping, commission, packaging and your share of returns. The most common mistake here is forgetting the return rate.
Say: 42%
So a 1,400₺ order leaves you with 588₺.
3. Acceptable customer acquisition cost
This is the real decision. How much of that 588₺ are you willing to spend to win a new customer?
- Spend all of it and you break even.
- Spend half and you make 294₺ on every sale.
- Spend a third and you grow more slowly but hold a higher profit.
A healthy starting point: 50% of the profit. So your target CPA is 294₺.
The budget falls out of this
How many new customers do you want a month?
100 customers × 294₺ = 29,400₺ monthly ad budget
That’s it. Not a competitor’s budget, not an industry average, not “a round number” — your own figures.
Don’t forget the learning allowance
This calculation won’t hold in the first month, because the first month is for gathering data: which creative, which audience, which offer works is still unknown.
In practice CPA runs 40-70% above target in month one. It closes on the target in month two and drops below it in month three.
The way to reflect that in the budget is this: for the first month, think not about the number of customers you want but the amount of data you need to collect. Meta needs roughly 50 conversions a week to optimise an ad set. A 30,000₺ monthly budget at 294₺ CPA gives ~100 conversions a month, or ~25 a week. So you are at the limit even with a single ad set.
That’s why on a small budget you build fewer campaigns. Splitting the budget five ways means all five fail to learn.
If the budget isn’t affordable
If the number comes out and you can’t cover it, you have three options. There isn’t a fourth:
- Raise the order value. Bundles, upsells, a free-shipping threshold. Sell 1,900₺ instead of 1,400₺ and the same budget does 36% more work.
- Fix the margin. In most brands the return rate and shipping cost are higher than assumed.
- Target fewer customers. 40 instead of 100. Slower, but healthy.
What you must not do: cut the budget and expect the same result. Ad platforms need data to learn, and data is bought with money.
Checklist
- Have you calculated the average order value over the last 90 days?
- Have you deducted returns and shipping from the margin?
- Have you set the target CPA as a percentage of profit?
- Have you left a learning allowance for the first month?
- Is the budget concentrated enough in one place to support 50 conversions a week?
If you can answer these five clearly, your budget is a calculation rather than a guess.