Paid Media Budget Allocator

Model how a fixed paid-media budget should split across Google, Meta, LinkedIn, TikTok, and YouTube by channel efficiency, funnel stage, and pipeline coverage. Get a defensible allocation you can walk into a board meeting with.

All free tools — Digital advertising playbook

Run this in your agent

The free AAJ agent skill Paid Media Budget Allocation does this job inside a coding agent, on your own data. Install it with npx skills add sarojkjha/aaj-marketing-skills --skill paid-media-budget-allocation.

Using Claude or ChatGPT instead? Add the AAJ engines as a custom connector, with no install: https://aaj-engines-mcp.sarojkjha10.workers.dev/mcp

How the allocator works

Choose a business model, then enter a monthly budget, a CAC target or a customer goal, plus each channel's cost per click, click-to-lead rate and lead-to-customer rate, or a cost per lead for channels that sell leads. The allocator funds each channel until the cost of its next customer reaches the same level everywhere, so no channel is over-funded past the point where it gets expensive. The starting numbers are AAJ's illustrative placeholders, not benchmarks; replace them with your own account data before you budget from the result.

Frequently asked questions

How should I split my ad budget across paid channels?

Set a CAC target from your LTV (David Skok's SaaS guidance puts LTV:CAC above 3:1), then split spend so the marginal cost per customer is roughly equal across channels. The allocator does this automatically using a diminishing-returns model so cheap channels don't get over-funded past their saturation point.

What CAC target should I use?

Work back from LTV. If LTV is $15,000 and you want a 3:1 LTV:CAC, your CAC ceiling is $5,000. For payback discipline, divide blended CAC by monthly gross-margin contribution — Skok puts the line at 12 months for SaaS, and Bessemer's guideline runs from under 12 months for SMB to under 24 for enterprise. There is no comparable published line for ecommerce, so set one from your cash position.

Why does YouTube get $0 at low budgets?

At a $30k SaaS budget, YouTube's first customer costs ~$938 — more than scaling cheaper channels like Meta or LinkedIn. That's correct: the engine is telling you not to spread your budget into a channel whose base CAC exceeds your achievable marginal CAC elsewhere. Add budget and YouTube will start funding.

What does "diminishing returns" mean here?

Every paid channel gets more expensive the more you spend on it (auction inflation, audience saturation, fatigue). The DR slider controls how steeply that curve bends. Moderate (0.8) is the realistic default for most B2B and ecommerce accounts; Aggressive (1.5) reflects narrower audiences or saturated markets.

What's the "learning budget" warning?

The floor is AAJ's rule of thumb, not a platform minimum: below roughly $1,500/month per channel, it is hard to read tests, get through a platform's learning phase or run enough creative variants. If the allocator funds two or more channels below this floor, it suggests consolidating to fewer, better-funded channels.

Why are LinkedIn and Capterra cost-per-lead instead of cost-per-click?

Review sites like Capterra/G2 sell qualified leads, not clicks — the right input is the price per lead, not CPC × CVR. Use CPL for any channel where you pay per lead delivered.

More in Paid Media

Part of the Paid Media hub - see all 17 resources on this topic.

Also useful in Analytics, Experiments & Budget.