Measure what each customer costs to win
Return on ad spend (ROAS) tells you how much revenue each unit of ad spend brings in, but revenue is not profit. Once product costs and fees come out, a ROAS that looks healthy can still lose money. Work out your break-even ROAS from your margin before judging a campaign.
Customer acquisition cost (CAC) adds up everything you spend to win customers, including ads, tools and time, and divides it by the customers you gained. Compare it with what a customer is worth over time to decide how much you can afford to spend.
Plan a budget backwards
Start from the sales you want, then use your conversion rate and cost per click or per thousand impressions to work out the traffic and budget needed. The ad cost calculator does this in either direction, so you can test whether a goal is realistic before you spend.