Your ad budget isn’t a guess. Stop picking a number and hoping for sales. Instead, calculate the exact budget you need to hit your sales goals.

This guide shows you
how to figure out the exact ad budget you’ll need.

Set Your Goals:

Let’s say you want to hit ₹5,00,000 in monthly sales with a 3x ROAS. This means for every ₹1 you spend on ads, you want ₹3 back in sales.

Estimate Your Ad Spend:

With your sales goal and desired ROAS, you can quickly estimate your ad budget.

Formula:
Sales Goal / Desired ROAS = Estimated Ad Budget

Example:
₹5,00,000 (Sales) / 3 (ROAS) = ₹1,66,667

So, to make ₹5,00,000 in sales with a 3x ROAS, you need to plan on spending around ₹1,66,667 on ads.

Figure Out How Many Products to Sell:

Next, let’s determine how many items you need to sell to reach your ₹5,00,000 goal. For this example, we’ll assume your average product costs ₹2,500.

Formula:
Sales Goal / Average Product Price = Units Needed

Example:
₹5,00,000 (Sales) / ₹2,500 (Product Price) = 200 Units

You need to sell 200 units.

Estimate Visitors from Your Budget:

Now, let’s think about how much it costs to get one person to click your ad and visit your store. This is your Cost Per Click (CPC). We’ll assume your CPC is ₹20.

Formula:
Estimated Ad Budget / CPC = Estimated Visitors

Example:
₹1,66,667 (Ad Budget) / ₹20 (CPC) = 8,333 Visitors

With your budget, you can expect about 8,333 visitors to your store.

Calculate the Conversion Rate You Need:

Finally, let’s find out what percentage of those 8,333 visitors need to buy something to get your 200 sales. This is your Required Conversion Rate.

Formula:
Units Needed / Estimated Visitors = Required Conversion Rate

Example:
200 Units / 8,333 Visitors = 0.024 or about 2.4%

This means to hit ₹5,00,000 in sales with a 3x ROAS, your store needs to convert visitors into buyers at least 2.4%.

This framework provides a clear link between your sales goals, ad spending, and the profitability you aim for. It helps transform the “how much?” and “what if?” into actionable numbers.

Ready to take control of your ad spend? Use this framework to plan your next campaign. If you have any questions, drop them in the comments below!