"How much should I spend on Meta Ads?" It is probably the question brands ask us most when they start taking advertising seriously. And the honest answer is that there is no universal number. Anyone telling you "spend 10% and you're done" is selling you an easy rule that ignores the one thing that actually matters: your margin.
One note before we get into it: when we talk about Meta Ads we mean advertising on Facebook and Instagram, which many people still call Facebook Ads or Instagram Ads.
And something important: this article is written for ecommerce, for stores that sell online. The logic you are about to see rests on each product's margin, POAS and purchase recurrence.
The quick answer
As a reference, most online stores spend between 7% and 25% of their revenue on advertising, depending on their stage and their margins. But that percentage is only a starting point.
The right question is not "what percentage do I spend", but "how much can I spend while each euro still leaves me a profit". And that is measured with POAS, not with a fixed percentage.
Why the percentage of revenue is only a starting point
The percentage of revenue is convenient because it is easy to calculate. The problem is that it is blind to margin, which is exactly what decides whether the investment pays off.
Spending 10% of revenue in a business with a 60% margin has nothing to do with spending that same 10% in one with a 25% margin. In the first you have room to spare. In the second you may be losing money on every sale. The same percentage, opposite results.
So the percentage is useful for getting a rough idea, but not for deciding. To decide, you need to look at your profit per euro spent.
The reference percentages, to orient you
With that warning up front, these are the ranges we usually see depending on the stage of the business. Take them as orientation, not as a rule.
| Ecommerce stage | Ad spend (% of revenue) | What you are after at that stage |
|---|---|---|
| Launch and validation | 20% to 30% or more | Learn fast what works, even at the cost of profitability |
| Growth | 15% to 25% | Scale what already validates, gaining share |
| Stable scaling | 10% to 18% | Grow while holding profit |
| Maturity and strong brand | 5% to 12% | Efficiency, leaning on brand and recurrence |
You will notice that the more mature the brand, the lower the percentage it needs, because part of the sales already come in through the brand and through repeat customers. A new brand, by contrast, has to pay for almost all its traffic, so its percentage is higher.
The real method: budget from your POAS
Here is what genuinely moves the needle. Instead of starting from a percentage, start from your profitability. The process is simple:
Step 1: work out your real contribution margin. Take the selling price and subtract the cost of goods (COGS), gateway fees, shipping and packaging. What is left is what you have to pay for advertising and fixed costs, and to make a profit.
Step 2: define your break-even POAS and your target POAS. A POAS of 1.0 is break even: gross profit equals what you spent on ads. Your target POAS is the one that, on top of that, covers your fixed costs and leaves you the profit you want. That is your threshold.
Step 3: spend everything you can while POAS stays above your threshold. Here is the key almost nobody applies: the ceiling on your spend is not a percentage, it is the point where the next euro stops beating your target POAS. As long as each extra euro keeps returning above that threshold, it is worth spending more. When POAS falls below, you have reached your efficient ceiling.
This is called budgeting by profit, not by percentage. And it changes the conversation completely: you stop asking "am I going over 10%?" and start asking "is the last euro I spent still leaving me a profit?".
An example to make it clear
When you're profitable, by your POAS
Net profit as spend increases (example: 45% margin, €8,000/mo fixed costs). Above the €0 line you profit; below it, you lose.
Tap or slide across the chart to see the profit at each spend level.
The three lines start from the same point: with €0 of spend you lose your €8,000 of fixed costs. From there, each POAS crosses 0 sooner or later. With POAS 2.0 you are profitable from €8,000; with 1.8, from €10,000; with 1.4 you do not get there in this range. That crossing point, not a fixed percentage, is your profitability point.
The three lines start from the same point: with €0 of spend you lose your €8,000 of fixed costs. From there, each POAS crosses 0 sooner or later. With POAS 2.0 you are profitable from €8,000; with 1.8, from €10,000; with 1.4 you do not get there in this range. That crossing point, not a fixed percentage, is your profitability point.
A store invoices €50,000 a month and has a 45% margin. Its fixed costs are €8,000 a month.
To cover those fixed costs it needs to generate €8,000 of gross profit just to break even. From there, everything it makes is profit. If it sets its target POAS at 1.8 (which covers fixed costs and leaves margin), it can spend as long as Meta returns €1.80 of gross profit for every euro.
If at €8,000 of spend it holds a POAS of 2.0, it has plenty of room and should try spending more. If on going up to €12,000 the POAS drops to 1.8, it is still at its threshold and it pays off. If at €15,000 the POAS falls to 1.4, it has gone past its efficient point and needs to pull back. Its number is not a fixed percentage: it is the point where the marginal POAS touches its threshold.
How to know if you can spend more (or less)
The signal is always the same: the marginal POAS, that is, what the last tranche of spend you added is returning.
If you raise the budget and POAS stays above your target, you have room to keep going. If you raise it and POAS collapses, you have hit your ceiling for now. And if your POAS is well above the threshold in a stable way, you are probably leaving sales on the table by underspending.
Spending too little has a cost too: the profitable sales you are not making. Falling short out of fear is not prudence, it is giving up growth that would have paid off.
The role of LTV: how much you can pay for a customer
There is an important nuance if your brand has recurrence. If a customer buys from you several times over time, you do not need the first sale to be profitable on its own: you can afford a lower POAS on the first purchase because the customer's Lifetime Value (LTV) makes up for it later.
A brand with a lot of repeat purchase can spend more aggressively on acquisition, because it recovers the margin on the following orders. A single-purchase brand has to make money on the first sale already. That is why LTV and CAC always enter the budget equation.
A practical floor: the minimum budget for Meta to learn
Beyond the percentages, there is a technical minimum. Meta's algorithm needs data to optimise: as a reference, around 50 conversions per ad set per week to leave the learning phase and perform stably.
That means that, below a certain budget, it is not that you are spending little: it is that Meta does not have enough data to optimise, and performance suffers. Before splitting a little money across many campaigns, concentrate it in a few so each reaches that learning threshold.
In practice, for a new brand a realistic figure to start gathering data and see first results is around €20 to €30 a day. It is not the budget you will scale with, but the minimum for the account to get going sensibly: below that it is very hard for Meta to learn and for the figures to mean anything reliable.
All of this is for one market: internationalising is starting over
There is a nuance worth being very clear about: all the percentages and thresholds we have talked about apply to one market, the one you already know. The moment you open a new country, the picture resets.
Even if your brand works beautifully at home, in a new market Meta's algorithm does not know you, your brand does not ring a bell, you have no conversion history to feed the optimisation, and the costs (CPM, CPA) are the ones there, not the ones back home. For budget purposes, launching in a new country sends you back to square one: a higher spend percentage, a lower POAS at first, and a learning phase you have to pay for again.
That is why internationalising your ecommerce is not spreading the same budget across more countries. Each market needs its own budget, its own learning phase and its own patience until the account starts performing like your main market. Planning it as a launch from zero, and not as a cheap extension of the one you already have, is what makes the difference between scaling abroad with judgement or burning cash.
Mistakes we see often
Setting a percentage and never touching it, whatever happens to the margin. The right percentage changes with your costs and your stage.
Cutting the budget the moment the CPM rises or the ROAS drops, without looking at POAS. Sometimes ROAS drops but you are still making money. And sometimes it rises while you lose margin on a promotion.
Splitting a small budget across many campaigns. Scattered money lets none of them learn. Better to concentrate.
Scaling on ROAS alone. It is the recipe for raising the budget on campaigns that invoice a lot and leave little.
How we do it at STRAT
We do not start from a percentage. We start from your contribution margin and your target POAS, and from there we work out how much it is worth spending and how far you can scale without breaking profitability. We raise the budget while the marginal POAS holds, and we adjust it the moment it stops. And we report on the profit that reaches your P&L, not on the ROAS that looks pretty in the Meta dashboard.
Frequently asked questions
What percentage of my revenue should I spend on Meta Ads? As a reference, between 7% and 25% depending on your stage and your margins: higher at launch, lower once the brand is pulling on recurrence. But the percentage is only orientation. The right number is worked out from your margin and your target POAS, not from a fixed percentage.
Is spending on Meta Ads the same as Facebook Ads or Instagram Ads? Yes. Meta Ads is the name that groups advertising on Facebook and Instagram, so Facebook Ads and Instagram Ads are the same platform. The budget is worked out the same way: from your margin and your POAS, not according to the network the ad shows on. That said, everything in this article is written for ecommerce.
How much budget do I need to start on Meta Ads? For a new brand, a realistic figure to start gathering data and see first results is around €20 to €30 a day. The idea is that the algorithm has enough data to learn: as a reference, budget to generate around 50 conversions per ad set per week. Below that, Meta has no data to optimise and performance suffers. Better to concentrate the budget in a few campaigns than spread it across many.
How do I know if I am spending too much? When you raise the budget and your POAS falls below your target threshold. That is the efficient ceiling. As long as each extra euro keeps returning above your target, you are not overspending.
Should I cut the budget if ROAS drops? Not automatically. Look at POAS first. ROAS can drop and still be profitable, or rise while you lose margin on a discount. The budget decision is made on POAS, not on ROAS alone.
Can I afford to spend more if my customers repeat? Yes. If your LTV is high, you can accept a lower POAS on the first purchase because you recover the margin on the following ones. Brands with recurrence can acquire more aggressively than single-purchase ones.
Want to know how much you should be spending on Meta Ads with your real numbers? At STRAT we manage your ecommerce paid media campaigns, working out your budget from POAS, to scale only what leaves a profit.
