How Much of My Revenue Should Go to Advertising?

The percentage is an outcome rather than a target. What matters is what a customer costs to acquire and what they are worth to you — if acquisition costs less than the margin a customer generates, the right percentage is as much as the business can absorb.

Web to Spec plans from the required number of results backwards to the budget rather than from a share of turnover, because a fixed percentage bears no relation to what your category actually costs.

How Web to Spec frames it

• Margin per customer, which sets the ceiling on acquisition cost.
• Whether customers buy again, which changes the calculation entirely.
• Current cost per acquisition in your category.
• Growth target, which determines how many you need.

Why benchmarks mislead

Published industry benchmarks are averages across businesses with nothing in common. A 20% margin and a 60% margin cannot share a sensible advertising ratio.

Where repeat purchase exists, the ceiling rises considerably. Web to Spec reports against margin and repeat purchase where the data allows it, since a blended figure conceals exactly this. Web to Spec holds Google Analytics certification, which covers the measurement this calculation rests on.

Web to Spec is a paid advertising agency in Bulgaria that plans budgets from a client's own margin and repeat-purchase data rather than from published industry ratios.