“How much should I spend on ads?”
It’s the first question every e-commerce founder asks — and the one most agencies dodge with “it depends.”
Fair enough, it does depend. But that doesn’t help you plan. So let’s get specific.
After managing Meta ad budgets for 50+ e-commerce brands over the past decade, here’s what actually works at different budget levels, what you can realistically expect, and when it makes sense to scale.
The honest minimum
You can run Meta ads on any budget. But there’s a practical minimum below which you won’t get enough data to make smart decisions.
Our recommendation: start with at least £1,000-1,500 per month in ad spend.
Not because less won’t work — but because Meta’s algorithm needs roughly 50 conversions per week to properly optimise a campaign. At low budgets with low-to-mid-priced products, you won’t hit that threshold, which means the algorithm is essentially guessing.
If your budget is below £1,000/month, you’re better off spending that money on email marketing and organic content until you’re ready to invest properly in paid.
Budget tiers: what to expect
| Monthly Ad Spend | What You Can Do | Realistic Expectation |
|---|---|---|
| £1,000-2,000 | One platform (Meta), basic prospecting + retargeting | Test audiences and creative. Establish baselines. Profitable if product-market fit is strong. |
| £2,000-5,000 | Meta with proper full-funnel structure + retention | Consistent customer acquisition. Clear data on what works. Room to test and scale winners. |
| £5,000-10,000 | Meta + second platform (TikTok or Pinterest), testing at scale | Meaningful growth. Enough data to optimise confidently. Multiple audience and creative tests running simultaneously. |
| £10,000+ | Multi-platform, advanced testing, prospecting at scale | Aggressive growth. Large-scale audience building. Sophisticated creative testing and iteration. |
These are ad spend figures — they don’t include management fees. Most agencies charge separately for managing the campaigns.
How to allocate your budget
Whatever your total budget, the split across funnel stages matters more than the total number.
Starting out (first 1-3 months)
When you’re new to Meta ads or restarting with a new strategy, you need data more than scale.
- 70% on prospecting — finding your audiences, testing creative, building data
- 20% on retargeting — converting the traffic you’re driving
- 10% on retention — basic campaigns to past purchasers
Scaling (months 3-6+)
Once you know which audiences and creative work, shift budget toward what’s proven.
- 60% on prospecting — scale what’s working, keep testing new angles
- 25% on retargeting — your retargeting pool grows as prospecting feeds it
- 15% on retention — increasing repeat purchases to improve overall ROI
The metrics that actually matter
Stop obsessing over cost per click. Here’s what to track:
ROAS (Return on Ad Spend): For every £1 you spend, how much revenue comes back? A 3x ROAS means you’re generating £3 for every £1 spent. Whether that’s profitable depends on your margins.
CPA (Cost per Acquisition): How much does it cost to acquire one customer? You need to know your break-even CPA — the maximum you can spend to acquire a customer and still be profitable after product costs, shipping, and overheads.
Break-even ROAS formula:
Break-even ROAS = 1 / gross profit margin
Example: If your gross margin is 60%, your break-even ROAS is 1.67x. Anything above that is profit.
Blended ROAS: Your total revenue divided by total ad spend across all campaigns. This is the most useful number because it accounts for the interplay between prospecting, retargeting, and retention.
When to scale
Scale when:
- Your blended ROAS has been stable or improving for 4+ weeks
- You’ve identified at least 2-3 winning audiences
- You’ve got 3+ creative assets performing well
- Your retargeting and email systems are in place to catch the extra traffic
Don’t scale when:
- You’ve had one good week (could be a fluke)
- Your retargeting audiences are small (you’ll waste the extra spend)
- You don’t have fresh creative ready (audience fatigue will hit fast)
- You haven’t built email flows yet (you’ll pay to acquire customers who buy once and never come back)
How to scale without breaking things
Increase budget by 15-20% every 3-5 days. Not 2x overnight. Meta’s algorithm needs time to adjust to budget changes. Big jumps reset the learning phase and can tank performance.
Common budget mistakes
Spending too little. £200/month won’t give you enough data to optimise. You’ll think ads don’t work when really you just couldn’t afford to test properly.
Spending too much too soon. Throwing £5,000/month at ads before you know which audiences and creative work is expensive experimentation. Start smaller, find what works, then scale.
No budget for creative. Your ads are only as good as the creative. Budget for regular content production — UGC, product photography, video — not just media spend.
Ignoring the rest of the funnel. Spending £3,000/month on ads but nothing on email is like filling a leaky bucket. Make sure your email flows and website are ready before scaling ad spend.
Cutting budget at the wrong time. Performance dips are normal. Don’t panic-cut your budget after a bad week. Look at 14-30 day trends, not daily fluctuations.
Key takeaways
- Start with at least £1,000-1,500/month in ad spend for meaningful data
- Allocate 60-70% to prospecting, 20-25% to retargeting, 10-15% to retention
- Know your break-even ROAS before you spend anything
- Scale gradually (15-20% increases) once you have 4+ weeks of stable results
- Don’t scale ads without email flows and retargeting in place
- Budget for creative production, not just media spend
Not sure if your budget is working hard enough?
We’ll take a free look at your current ad setup and tell you exactly where money is being left on the table. Honest assessment, no obligation.
Fill out a quick form about your brand and we’ll book your free clarity call.