How should I split my marketing budget between channels?

Give the next euro to the channel where the next euro returns the most, which is not always the channel with the highest average ROAS. A channel's average includes its best spend; the euros you move are its last. Estimate the ROAS each channel would reach at its new spend, then check the return on each change against your break-even ROAS.

What is marginal ROAS?

The revenue from one more unit of spend on a channel, rather than the average over all its spend. When a channel saturates, its marginal ROAS falls below its average, and money moved into it earns less than the average suggests.

Why does the calculator not recommend a split?

A recommendation needs each channel's response curve, how its revenue changes as its spend changes, and no calculator knows yours. A rule such as splitting in proportion to ROAS treats every extra euro as earning the channel's average and can recommend moves that lose money. The calculator shows what your own assumptions imply instead.

Where do I get the ROAS I expect at a new spend?

From your own history, such as weeks when a channel's spend was higher or lower; from a test that changes spend in part of your market; or from a model built on your data. Platform ROAS is a starting point, not an answer: each platform counts the sales it can tie to its own ads, and two platforms can count the same order.

What if I raise the total budget?

Enter each channel's planned spend as it would be. The calculator shows the change in spend beside the change in revenue, and with your margin, whether the extra spend adds gross profit after paying for itself.

Can I plan more than three channels?

Group the ones you are not changing: put them in one row with their combined spend and blended ROAS, and use the other rows for the channels you are moving money between.

Multi-Channel Budget Calculator

Result

Fill in the four numbers for Channel A and Channel B to see the result.

How it works

The calculator adds up your plan; it does not make one. For each channel it multiplies spend by ROAS, now and with the plan, and compares the totals. It also works out the return on each change: the revenue a channel adds for the extra spend, or the revenue it gives up for the spend you cut.

That last number is the one to watch. A channel's average ROAS covers all its spend, including its first and best euros, while what you move is its last euros, and as a channel's budget grows the extra euros can return less than the average. Google's documentation for its Meridian marketing mix model makes the same point: the channels with the highest marginal return are the best place for additional money.

revenue = spend × ROAS
blended ROAS = Σ revenue ÷ Σ spend

ROAS on the change =
  (planned spend × ROAS at planned spend
   - spend now × ROAS now)
  ÷ (planned spend - spend now)

change in gross profit =
  change in revenue × gross margin
  - change in spend

What each term means

Spend and ROAS now: What the channel spends in a month and the ROAS it returns on that spend. Take every channel's ROAS from the same source.
Planned spend: What you plan to spend on the channel instead. Keep it the same as now for a channel you are not changing.
ROAS at planned spend: The ROAS you expect from the channel at the planned spend. It is your assumption, and the plan stands or falls with it.
ROAS on the change: Revenue added per extra unit of spend, or revenue given up per unit cut: the marginal ROAS your plan implies.
Break-even ROAS: 1 divided by the gross margin. Extra spend earning below it loses gross profit; cutting spend that earns below it saves more than it gives up.

Why the calculator will not suggest a split

Splitting a budget well needs each channel's response curve: how its revenue changes as its spend changes. No calculator knows yours. A split in proportion to each channel's ROAS assumes every extra euro earns the channel's average, and it can recommend moves that lose money. So this one asks for the return you expect and shows you what follows from it.

Where the ROAS numbers come from

Use one source for every channel, and know what it counts. Platform ROAS counts the sales each platform can tie to its own ads, so two channels can claim the same order, and the channels' revenue can add up to more than the store took. A holdout test on one channel, or a causal read of your GA4 export for all of them, puts each channel's number on the same footing.

Worked example

Example numbers, round on purpose. They are not a real store.

Channel A now: €20,000 at 3.5x
Channel A planned: €15,000 at 3.9x
Channel B now: €25,000 at 4.2x
Channel B planned: €30,000 at 3.8x
Channel C, unchanged: €5,000 at 2.8x
Gross margin: 50%

1Revenue now: €20,000 × 3.5 + €25,000 × 4.2 + €5,000 × 2.8 = €189,000
2Blended ROAS now: €189,000 ÷ €50,000 = 3.78x
3Revenue with the plan: €15,000 × 3.9 + €30,000 × 3.8 + €5,000 × 2.8 = €186,500
4Blended ROAS with the plan: €186,500 ÷ €50,000 = 3.73x
5Channel A, ROAS on the change: (€58,500 - €70,000) ÷ (€15,000 - €20,000) = 2.30x
6Channel B, ROAS on the change: (€114,000 - €105,000) ÷ (€30,000 - €25,000) = 1.80x
7Break-even ROAS: 1 ÷ 50% = 2.00x
8Change in gross profit: -€2,500 × 50% - €0 = -€1,250

On average ROAS the move looks right: Channel B returns 4.2x and Channel A 3.5x. On the returns expected at the new spend, the €5,000 cut from A was earning 2.30x and the €5,000 added to B earns 1.80x, below the 2.00x break-even. The plan loses €2,500 of revenue and €1,250 of gross profit.

Frequently asked questions

How should I split my marketing budget between channels?
Give the next euro to the channel where the next euro returns the most, which is not always the channel with the highest average ROAS. A channel's average includes its best spend; the euros you move are its last. Estimate the ROAS each channel would reach at its new spend, then check the return on each change against your break-even ROAS.
What is marginal ROAS?
The revenue from one more unit of spend on a channel, rather than the average over all its spend. When a channel saturates, its marginal ROAS falls below its average, and money moved into it earns less than the average suggests.
Why does the calculator not recommend a split?
A recommendation needs each channel's response curve, how its revenue changes as its spend changes, and no calculator knows yours. A rule such as splitting in proportion to ROAS treats every extra euro as earning the channel's average and can recommend moves that lose money. The calculator shows what your own assumptions imply instead.
Where do I get the ROAS I expect at a new spend?
From your own history, such as weeks when a channel's spend was higher or lower; from a test that changes spend in part of your market; or from a model built on your data. Platform ROAS is a starting point, not an answer: each platform counts the sales it can tie to its own ads, and two platforms can count the same order.
What if I raise the total budget?
Enter each channel's planned spend as it would be. The calculator shows the change in spend beside the change in revenue, and with your margin, whether the extra spend adds gross profit after paying for itself.
Can I plan more than three channels?
Group the ones you are not changing: put them in one row with their combined spend and blended ROAS, and use the other rows for the channels you are moving money between.

Related terms: ROAS, incremental ROAS, media mix modeling and holdout test.

Next: what does each channel really return?

Moving budget on platform ROAS moves it on each platform's own claims. Your GA4 export already holds how long your buyers take and which channels they touch. First finding free, in your browser; the full read is €99.

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