How much should you
actually spend on ads?

There's no universal Facebook budget — the right number depends on your customer LTV, profit margin, and how many new customers you want each month. Most SMBs land between $500 and $5,000 a month for ads specifically. Use the calculator above to get a number tailored to your situation, then split it across the platforms that fit your audience.

A healthy customer acquisition cost is anywhere up to 30% of your gross profit per customer (gross profit = LTV × margin). If a customer is worth $600 in lifetime value and your margin is 30%, your gross profit is $180 and your max acceptable CAC is $54. The standard target is keeping your LTV-to-CAC ratio at 3× or higher.

Most SMBs spend 7–12% of total revenue on advertising. Aggressive growth plays push that to 15–20%. Mature brands with strong word-of-mouth can go as low as 4–5%. The right percentage for you depends on growth ambition, profit margin, and how much of your customer flow already comes from organic channels.

Start with three numbers: your average customer LTV, your profit margin per customer, and your monthly revenue goal from ads. Multiply LTV × margin × 30% to get your max acceptable customer acquisition cost. Divide your revenue goal by LTV to get customers needed per month. Multiply customers needed × max CAC for your target ad budget. The calculator above does all of that in one click.

Average return on ad spend (ROAS) for SMBs lands around 2–4× — meaning $1 spent returns $2–$4 in revenue. E-commerce often runs higher (4–8×) thanks to direct purchase tracking; service businesses often run lower because lead-to-customer conversion is harder to attribute. A ROAS below 2× usually means your CAC is too high or your LTV math is wrong.

$500/month is enough to test whether ads work for your business — you'll get statistically meaningful data within 4–6 weeks. Whether it's enough to hit your revenue goal depends entirely on your industry's cost per lead and conversion rate. A construction company at $50 CPL and 15% conversion gets about 1–2 customers per month from $500. A restaurant at $25 CPL and 10% conversion gets about 2 customers from the same spend. Run your numbers above for a more specific answer.

Picking the right platforms is its own analysis — it depends on where your audience spends time, what visual assets you have, and how long your sales cycle is. Mixing platform recommendations into a budget calculator usually means generic advice that's wrong for most businesses. AdPrep handles platform selection in our full ad plan generator (also free to start) — this calculator just nails the budget math.

The numbers in the industry context section are aggregated from publicly-available WordStream and AdEspresso benchmark reports across Google Ads and Meta Ads. They're rough averages — your actual results will vary based on creative quality, geography, season, and channel mix. Once you're 4–6 weeks into running ads, your own data should replace these benchmarks.