What Is an Advertising Budget?

An advertising budget is the portion of a company’s overall marketing spend that’s allocated specifically for promoting its products or services across paid media channels. For modern marketers, it’s more than just a number—it’s a strategic tool that guides decisions about where, when, and how to invest in awareness, engagement, and conversion.

At Agility, where programmatic advertising spans display, video, CTV, and audio, your advertising budget helps define the scope and scale of your campaign. It ensures that media buys, creative development, and audience targeting all align with performance goals. Whether you’re managing a $1K/month test or a $25K+/month portfolio, a clearly defined advertising budget keeps your campaigns measurable, purposeful, and optimized for ROI.

Common Methods of Advertising Budget Allocation

There are several methods of advertising budget planning, each suited to different business models and objectives:

• Percentage of Revenue: Allocate a fixed percentage of projected or past revenue (commonly 5–10%) toward advertising. This is simple and scalable, often used by growing businesses.

• Objective-Based Budgeting: Start with a campaign goal—such as acquiring 1,000 new leads at $50 each—and work backward to define the required spend. This method is ideal for performance-driven teams.

• Competitive Benchmarking: Set your budget based on how much similar businesses in your vertical are spending. This helps you stay competitive in high-demand channels.

• Incremental Budgeting: Adjust based on previous spend, either increasing or decreasing based on results from past campaigns.

• Available Resources: Sometimes the budget is set by what’s available—not ideal, but common in startups or early-stage testing.

Regardless of your method, the key is to tie budget to impact. With the right visibility into performance metrics like ROAS, CPL, and viewability, marketers can fine-tune spend across channels for more predictable, scalable growth.