The question arrives in almost every first meeting, usually phrased as a percentage. Should we spend five percent of revenue? Ten? The percentage rules floating around the internet were written for stable currencies and mature markets, and applying them here produces budgets that are either pointlessly small or recklessly large. Start somewhere else.
How much to spend on ads: work backwards from one customer
Take your average order value, subtract cost of goods, subtract delivery, and subtract the share of cash on delivery orders that are refused at the door. What remains is the contribution one order actually makes. Say an online retailer sells at 1,800 pounds with a forty percent gross margin, which is 720 pounds. If one order in five comes back undelivered, the realistic contribution per completed order falls closer to 575 pounds.
Now decide what share of that you are willing to hand to media. Half is a common and survivable answer for a business that wants to grow while staying cash positive, which sets an allowable acquisition cost around 285 pounds. Multiply by the number of new customers you want each month and you have a budget that is defensible in a board meeting, rather than a number someone felt comfortable with.
For lead generation businesses the same arithmetic runs one step further back. If sales close one in six qualified leads and a closed deal contributes 12,000 pounds, an allowable cost per qualified lead of 900 to 1,000 pounds is entirely rational, even though it will feel enormous to anyone used to judging cost per click.
There is a floor below which you are buying noise
Budget can be too small to work at all, and this is the part founders resist. Paid platforms learn from conversions. Below roughly thirty conversions a month a search campaign cannot bid intelligently, and a Meta ad set that never leaves the learning phase spends the whole month paying tuition and never graduating.
The practical floors we see in Egypt right now, after the currency moves of the last three years pushed auction prices up in pound terms, look roughly like this. A single city service business needs something in the range of 25,000 to 60,000 pounds a month across search and social before the data starts behaving. A growing online store usually needs 100,000 to 400,000 to run prospecting and remarketing properly at the same time. Property developers and multi branch retailers operate an order of magnitude above that, and their problem is allocation rather than sufficiency.
If your available budget sits under the floor, do not spread it across four channels. Pick the one channel where your buyer already has intent, usually search for considered purchases and social for discovery products, and win there first.
Re-baseline when the pound moves
Anyone planning a twelve month media budget in this market and never revisiting it is planning in a currency that will not hold still. Platform auctions here are priced against demand from advertisers who often earn in dollars, so a devaluation raises your effective cost per thousand impressions in pounds even when nothing about your campaign changed. Imported stock gets more expensive at the same moment, which squeezes the margin the budget was built on from the other side.
We rebuild the allowable acquisition cost every quarter with current margins and current auction prices. It takes an hour and it has saved several clients from scaling into a negative contribution without noticing.
If you want that arithmetic run against your own numbers before you commit a budget, the free audit covers it, and our paid media advertising and planning team will tell you honestly if the number you have in mind is too small to work.
