Pop Quiz!
You have been running a campaign for 7 days with a daily budget of $50. Over those 7 days you have spent $350 with an ROAS of 1500%. You are using a “Maximize ROAS” bid strategy, and want to hit an ROAS of 2000%.
What should your daily budget be?
Here is the formula:
This formula calculates what your daily spend should have been to hit your target ROAS. Although there are no guarantees that future performance will be the same as past performance, it does provide a baseline from which to work.
If you are running a smart bidding campaign in either Google Ads or Facebook Ads, and are aiming for a target Return on Ad Spend (ROAS), this is a great formula to use for adjusting your budgets.
The Answer
| Sample Campaign | |
|---|---|
| Total Cost | $50×7 = $350 |
| # of Days | 7 |
| Current ROAS | 1500% |
| Target ROAS | 2000% |
Using the formula above we get:
New Daily Budget = $350 ÷ 7 × 1500 ÷ 2000 = $37.50
By reducing our budget from $50 to $37.50, we should be in better shape to hit our target ROAS of 2000%.
Alex Czartoryski 