How much can you spend on ads for a $29 digital product?

A budget ceiling starts with what you need to keep

For the fictional example below, a $29 digital product can support $13.10 in advertising per initial order while leaving $1,000 in monthly profit at 100 orders. Spending $23.10 per order would only break even. Neither number is a typical market cost or evidence that those sales are achievable.

The gap matters: an advertising campaign can generate more revenue than it costs and still miss the income you need. Work backward from the money left after refunds, transaction fees, delivery and fixed expenses.

Load the $29 example in the planner. The link fills in the assumptions, including custom illustrative fees; it does not connect an advertising account or spend money.

Be clear about the cost you are measuring

Here, ad cost per order means campaign spend divided by initial paid orders attributed to that campaign. It is not cost per click. We assume all 100 orders belong to the same paid-acquisition scenario and each contains one product.

Customer acquisition cost (CAC) is broader: it counts sales and marketing costs per new customer, as explained in Shopify’s CAC guide. Repeat orders, organic sales and marketing labor can make CAC different from ad cost per order. Keep those distinctions when entering your own numbers.

Include creative production, marketing software or contractor expenses once, either as an allocated fixed expense or in your per-order acquisition cost. In this example the per-order field contains ad spend only; the $150 fixed budget covers all other modeled monthly expenses.

The assumptions for a $29 download

• Price: $29, with no discount.
• Initial paid orders: 100 in one month.
• Expected refunds: 5%, all full refunds.
• Illustrative combined transaction charge: 5% plus $0.50 per order; no additional processing or monthly platform fee.
• Fee retention on refunded orders: 100%.
• Delivery and support: $1 per initial order, including refunded orders.
• Other monthly fixed expenses: $150; no separate creation-cost allocation.
• Target monthly profit: $1,000 before income tax.

The custom fee is a teaching assumption, not a quote from a provider. We keep it fixed so the example remains reproducible when official presets change. Taxes, currency conversion, chargebacks and payout deductions are excluded. Use your actual fees and known expenses when making your own plan.

Calculate the maximum ad cost per order

Before advertising, this scenario retains:

$2,900 sales − $145 refunds − $195 fees − $100 delivery/support − $150 fixed expenses = $2,310.

Each initial order costs $1.95 in transaction fees: $29 × 5% + $0.50. Full fee retention means the fee total remains $195 despite the expected refunds.

To retain $1,000 in profit, the available monthly ad budget is $2,310 − $1,000 = $1,310. Divide by 100 initial orders to get $13.10 per order.

For a chosen positive order count, the general calculation is:

Ad-cost ceiling per order = (profit before advertising − target profit) ÷ initial orders.

Profit before advertising must already deduct every other modeled cost. If this ceiling is negative, the scenario misses its target even with free acquisition. With zero orders, division is undefined; model committed campaign spend as a fixed expense instead.

See the difference between a profitable campaign and your profit goal

At $18 per order, the campaign still leaves a positive monthly result, but misses the $1,000 goal by $490. At $23.10, every dollar available after other costs goes to ads. That leaves no modeled profit for your own pay or a buffer for omitted expenses.

Try the break-even advertising scenario and compare it with the target-profit example.

Change the assumptions before committing a budget

A ceiling calculated at one price and volume should not be reused after changing the offer. Each row below changes just one assumption and keeps the $1,000 target and other inputs unchanged.

With 50 orders, each sale must support $3 of fixed expenses and $20 of target profit, leaving just $1.60 for ads. The volume assumption affects more than total revenue. A discount may increase demand, but this comparison deliberately holds orders constant; it does not predict that response.

Translate the ceiling into ROAS carefully

If your reported conversion value is revenue before refunds, the example’s revenue ROAS at the profit-goal ceiling is $2,900 ÷ $1,310 ≈ 2.21×, or about 221%. At the break-even ceiling it is $2,900 ÷ $2,310 ≈ 1.26×. These are rounded illustrations, not universal bidding targets.

Google’s Target ROAS documentation describes conversion value relative to ad cost. What you send as conversion value matters. If you instead report revenue after refunds, the numerator here is $2,755 and the ratio changes. Revenue ROAS alone does not deduct all the expenses used in this profit model.

This calculation is not a recommendation to launch a paid campaign. Ad platforms may attribute sales differently, conversions can arrive later, and reported sales do not prove every purchase was caused by an ad. Start from observed results when available and leave room for uncertainty.

Use the planner to check your own limit

1. Open the worked example or enter your own price, order forecast and platform.
2. Open More sales assumptions and add discounts and refunds. Open Add your costs and include support, overhead and any creation-cost allocation.
3. Set Acquisition per order to $0. The monthly result is profit before advertising under these assumptions.
4. Subtract your target profit and divide by the initial order count. Enter that result in Acquisition per order to check it. The planner does not currently calculate an ad-cost ceiling automatically.
5. Save a second scenario with fewer orders or more refunds. Compare the results before setting a test budget.

For actual platform presets, inspect the official fee sources. The calculation method explains rounding and refund retention. For additional context, read how refunded orders affect acquisition costs or how to work backward to a price.