Formula
The budget is a planning share of revenue, rounded to the nearest cent:
Budget = revenue × percent of revenue
This does not look at past ad results. ROAS, CPC, and CAC answer those questions.
Assumptions
- You choose the percent. It is not a benchmark loaded by the page.
- The percent runs from 0 to 100.
Worked example
8.00% of $200,000.00 in revenue is a marketing budget of $16,000.00.
Input definitions
- Revenue
- The sales base the percent is applied to. Zero is allowed.
- Percent of revenue
- The share you want to assign to marketing.
Limitations
This is a planning estimate, not accounting, tax, payroll, or advertising advice. The currency control changes the symbol only.
Questions
Is 8% a recommended budget?
No. 8% is only the example. Type the percent you intend to use.
Does this split the budget by channel?
No. It is one total. It does not assign amounts to search, email, or social.