Marketing Budget Allocation Calculator
Divide your budget in proportion to channel efficiency (ROAS), for two to eight channels — a fast orientation for the next allocation decision, not a forecast.
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Channel Mix Calculator
See how your revenue is actually distributed across those channels.
Splitting an advertising budget by what each channel returns
Budget allocation means dividing the total advertising budget across channels according to their relative efficiency. The simplest approach is proportional to ROAS: a channel returning three times its spend gets three times the budget of one returning its spend once. It is a fast way to reach a defensible starting point — and a heuristic rather than an optimisation model, for reasons set out below.
Share A (%) = ROAS A ÷ (ROAS A + ROAS B) × 100
Budget A = total budget × share A ÷ 100
Generalised: sharei = ROASi ÷ the sum of all ROAS values — the principle works identically for two channels or for eight.
How to allocate a marketing budget across two channels
$10,000 of total budget, channel A at 3.0× ROAS and channel B at 1.0×:
The method ignores diminishing returns — and that is the catch
Proportional allocation is a simplified heuristic, not an optimisation model, and the gap between the two has a name: diminishing returns. A channel's ROAS usually falls as its budget rises, because the cheapest and most obvious demand gets captured first. The formula here assumes the ROAS you entered stays constant at any budget, which is exactly the assumption that breaks when you act on the result at full scale. Treat the output as a starting point and a direction of travel, not as a target figure.
Move in steps, and re-measure before the next one
- Shift gradually: Move budget in steps of 10–20 % per period rather than all at once. That leaves time to observe the new ROAS values before committing further — which is the only defence against diminishing returns you actually control.
- Re-measure ROAS after every shift: It changes with volume. A projection based on today's ROAS holds only as long as the budget stays in the same order of magnitude.
- Use MER as the overall check: After a reallocation the marketing efficiency ratio shows quickly whether total efficiency actually rose — regardless of how the platforms attribute the conversions among themselves.
Frequently asked questions
- What is budget allocation in marketing?
- Budget allocation is the decision about which share of the total budget goes to which channel. The aim is to send scarce money where it returns most, instead of funding every channel equally or by instinct.
- How do you allocate a budget by ROAS?
- Share of channel i (%) = ROAS i ÷ the sum of all ROAS values × 100. Budget of channel i = total budget × share i ÷ 100. For example: $10,000 of budget, channel A at 3.0× and channel B at 1.0× gives A $7,500 (75 %) and B $2,500 (25 %).
- Is ROAS-proportional allocation the optimal model?
- No — it is a simplified heuristic, not an optimisation model. Real allocation has to account for diminishing returns: a channel's ROAS usually falls once its budget rises substantially. Use this calculator's output as a starting point rather than an exact target.
- How should you check a reallocation afterwards?
- Move budget in steps of 10–20 % per period and re-measure ROAS after each shift, since it moves with volume. For the overall check, use the marketing efficiency ratio — it shows cross-channel efficiency without depending on tracking or attribution.