What is Ad Spend?
The total budget allocated to running advertisements.
Definition
Ad spend is the total amount of money invested in paid advertising campaigns. It encompasses platform costs (the amount paid to Meta, Google, TikTok, etc. for impressions or clicks), creative production costs, and agency/tool fees. Tracking ad spend against revenue generated gives you ROAS (Return on Ad Spend). Most e-commerce brands allocate 10-30% of revenue to ad spend, scaling up when ROAS targets are consistently met.
Example
A brand spends $10,000/month on Meta ads, generating $45,000 in attributable revenue — a 4.5x ROAS. They decide to increase ad spend to $15,000 while maintaining creative quality.
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