How much should you spend on e-commerce ads?
The right ad budget is the one that brings enough sales for the platforms to learn, at a return on ad spend (ROAS) you can afford. Start from your margins, not from what competitors spend.
Visits = ad budget ÷ cost per click
Purchases = visits × conversion rate
Revenue = purchases × average order value
ROAS = revenue ÷ ad budget
Worked example for a beauty and personal care store in the United States with a $60 average order value, budget split 40% Google and 60% Meta:
| Metric | Benchmark | $3,000 a month | $7,500 a month |
|---|---|---|---|
| Visits | $0.90 Google, $0.70 Meta per click | ≈ 3,900 | ≈ 9,760 |
| Purchases | About 2% of visits | ≈ 79 | ≈ 199 |
| Revenue | × $60 order value | ≈ $4,770 | ≈ $11,900 |
| ROAS | Revenue ÷ spend | ≈ 1.6× | ≈ 1.6× |
A 1.6× ROAS is not profitable for most stores, which is why order value, conversion rate and retargeting matter as much as budget. Raising the average order to $80 with bundles would lift the same campaigns to about 2.1×.
Break-even ROAS: the number every store needs
Break-even ROAS is the return at which ads pay for themselves. Calculate it as 1 ÷ gross margin (after product cost, shipping and fees).
| Gross margin | Break-even ROAS |
|---|---|
| 25% | 4.0× |
| 35% | 2.9× |
| 50% | 2.0× |
| 60% | 1.7× |
| 70% | 1.4× |
Campaigns above break-even make money on the first order. Many brands accept a lower first-order ROAS when repeat purchases are strong, but they should know that choice is deliberate.
Google Shopping vs Meta ads for online stores
Google Shopping and Performance Max show your products to people already searching for them. They usually convert better and suit products people search for by name or category.
Meta Advantage+ shopping creates demand for products people do not search for yet, through video and creative. It suits new brands, visual products and launches.
Most stores need both, plus retargeting for cart abandoners and product viewers, which usually lifts sales by 10–20% for very little extra spend.
How to improve ROAS
- Install the Meta pixel with Conversions API and Google enhanced conversions, so platforms learn from real purchases.
- Test three new creatives every two weeks; customer review videos usually win.
- Raise average order value with bundles and a free-delivery threshold.
- Make product pages load in under three seconds on mobile, with reviews next to the buy button.
- Recover abandoned carts by email or WhatsApp within an hour.
Benchmarks are planning averages for a US-level market, used by the calculator above. Your own results will vary with your offer, creatives, landing page and follow-up.