{"id":30773,"date":"2026-09-11T07:38:00","date_gmt":"2026-09-11T06:38:00","guid":{"rendered":"https:\/\/www.nexoya.com\/?post_type=blog_posts&#038;p=30773"},"modified":"2026-09-09T07:57:41","modified_gmt":"2026-09-09T06:57:41","slug":"marketing-budget-allocation-ecommerce","status":"publish","type":"blog_posts","link":"https:\/\/www.nexoya.com\/de\/blog\/marketing-budget-allocation-ecommerce\/","title":{"rendered":"Marketing Budget Allocation in Ecommerce: The Highest ROAS Is Not Always the Best Investment"},"content":{"rendered":"<div class=\"wp-block-post-time-to-read\">7\u201310 minutes<\/div>\n\n\n<p class=\"wp-block-paragraph\">ROAS is great, everybody understands it, it updates fast, and it gives you a nice number to put into a dashboard. Great \ud83d\ude09<br>But it can also make budget allocation look much easier than it really is. Lets take an example: Imagine Campaign A has a ROAS of 800% and Campaign B has a ROAS of 500%. Where do you put the next 10&#8217;000 Euro?<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Obviously A, right?<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Well: Not necessarily.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What if Campaign A is already close to saturation, the main products are low margin, and half the bestsellers are almost out of stock? And what if Campaign B has a slightly lower ROAS today but much more headroom, higher-margin products and a promotion starting next week? Or if campaign A has double the shipping returns than Campaign B?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Suddenly the historical ROAS is useful, but it is not the budget decision. I wrote about the general problem in <a href=\"https:\/\/www.nexoya.com\/blog\/attribution-without-allocation-is-just-reporting\/\">Attribution Without Allocation Is Just Reporting<\/a>: measurement only becomes useful when it changes where the money goes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For ecommerce, there is one extra challenge: the business can change incredibly fast. For example, demand, margin, inventory, promotions, and competition can move before the monthly media plan is even finished. So the question is not only &#8222;which campaign performed best?&#8220;. The more important question is:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Where is the next euro expected to create the most business value now?<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 id=\"h-revenue-is-not-always-the-kpi-you-really-want\" class=\"wp-block-heading\">Revenue is not always the KPI you really want<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s take a simple example: Two product categories each generate 100&#8217;000 Euro revenue from paid media.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Category A has a gross margin of 50%.<\/li>\n\n\n\n<li>Category B has a gross margin of 15%.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Same revenue, potentially similar ROAS but very different business value. This is why ecommerce teams often start with revenue or ROAS and then, as the setup becomes more mature, move closer to profit (or POAS\/MOAS).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Depending on the business, the outcome could be:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Revenue<\/li>\n\n\n\n<li>Gross profit<\/li>\n\n\n\n<li>Contribution margin<\/li>\n\n\n\n<li>CRR \/ cost-revenue ratio<\/li>\n\n\n\n<li>POAS \/ profit on ad spend<\/li>\n\n\n\n<li>New-customer value<\/li>\n\n\n\n<li>Customer lifetime value \/ ACV \/ LTV<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">I would always start with the business question first and work backward from there. So if your CFO cares about margin, but your media team is still optimizing every campaign against platform ROAS, you have a gap. The ads might be &#8222;performing&#8220; and the business can still be unhappy. This happens more often than people admit \ud83d\ude09<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This does not mean ROAS is bad, it is a very useful operational KPI and indicator. It only becomes dangerous when we treat it as the only truth instead of one signal.<\/p>\n\n\n\n<h2 id=\"h-the-best-campaign-today-can-be-saturated-tomorrow\" class=\"wp-block-heading\">The best campaign today can be saturated tomorrow<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">This is probably the biggest problem with historical ROAS: it tells you what happened at the current spend level but budget allocation asks something else.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s say Campaign A spent 50&#8217;000 Euro last month and generated a strong return, now we want to add another 20&#8217;000 Euro. Will the additional 20&#8217;000 perform exactly like the first 50&#8217;000?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Normally not.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As spend increases, you usually reach less attractive audiences, bid into more expensive inventory, increase frequency, or simply run out of demand. The response curve starts flattening. That is diminishing returns, and in ecommerce it can happen very fast, especially around peak periods or small audiences.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So I like to separate two questions:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>What was the average return of the money we already spent?<\/li>\n\n\n\n<li><strong>What is the expected marginal return of the next 10&#8217;000 Euro?<\/strong><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The second one is much closer to the real budget decision.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"683\" src=\"https:\/\/www.nexoya.com\/wp-content\/uploads\/2026\/09\/roasStory-1024x683.png\" alt=\"\" class=\"wp-image-30774\" srcset=\"https:\/\/www.nexoya.com\/wp-content\/uploads\/2026\/09\/roasStory-1024x683.png 1024w, https:\/\/www.nexoya.com\/wp-content\/uploads\/2026\/09\/roasStory-300x200.png 300w, https:\/\/www.nexoya.com\/wp-content\/uploads\/2026\/09\/roasStory-768x512.png 768w, https:\/\/www.nexoya.com\/wp-content\/uploads\/2026\/09\/roasStory-254x169.png 254w, https:\/\/www.nexoya.com\/wp-content\/uploads\/2026\/09\/roasStory-350x233.png 350w, https:\/\/www.nexoya.com\/wp-content\/uploads\/2026\/09\/roasStory.png 1536w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">This is also why &#8222;put more budget into the highest ROAS campaign&#8220; does usually produce suboptimal result. The campaign may be the best because you have already funded it very efficiently, but that does not automatically mean it is the best place for the next euro.<\/p>\n\n\n\n<h2 id=\"h-inventory-is-a-media-constraint-even-if-the-ad-platform-does-not-know-it-yet\" class=\"wp-block-heading\">Inventory is a media constraint, even if the ad platform does not know it (yet)<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">This sounds obvious, but media optimization and ecommerce reality are often not connected well enough. A campaign can look fantastic while the products behind it are almost sold out.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Or maybe even more tricky situation:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Best sizes are unavailable<\/li>\n\n\n\n<li>Category has low margin this week<\/li>\n\n\n\n<li>Stock sits in a specific country<\/li>\n\n\n\n<li>You want to clear another category<\/li>\n\n\n\n<li>Promo is about to start<\/li>\n\n\n\n<li>Returns are unusually high<\/li>\n\n\n\n<li>Delivery costs changed<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The media system does not automatically know all of this, that means the best mathematical allocation on your spreadsheet or even with a complex AI agent without the needed business context can be useless.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore we suggest to include the business reality as constraints or even better targets:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Maximum spend for products with low availability<\/li>\n\n\n\n<li>Minimum spend for strategic categories<\/li>\n\n\n\n<li>Regional limits<\/li>\n\n\n\n<li>Margin thresholds<\/li>\n\n\n\n<li>New-customer goals<\/li>\n\n\n\n<li>Promotion periods as events<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Again, the question is not:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>What allocation gives the highest return?<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">It is:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>What is the best expected result inside the business reality we actually have?<\/strong><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">For me, that is the useful definition of optimal.<\/p>\n\n\n\n<h2 id=\"h-another-example-seasonality-is-not-just-black-friday\" class=\"wp-block-heading\">Another example: Seasonality is not just Black Friday<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Every ecommerce marketer knows seasonality exists, but I think its sometimes threated too statically: Black Friday is in November, Christmas is in December, summer is summer, done. But the reality is way more messy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Demand can move because of:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Weather<\/li>\n\n\n\n<li>Competitor discounts<\/li>\n\n\n\n<li>Product launches<\/li>\n\n\n\n<li>Influencer activity<\/li>\n\n\n\n<li>Price changes<\/li>\n\n\n\n<li>Stock-outs<\/li>\n\n\n\n<li>Marketplace behavior<\/li>\n\n\n\n<li>Proomotions that suddenly work much better or worse than expected<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">So the response curve itself moves, this is why I am not a big fan of fixed monthly channel splits like 40% Google, 35% Meta, 15% Microsoft, 10% retargeting and then we keep this because it looked good in the planning meeting. The market changes do not  care about your spreadsheet \ud83d\ude42<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If demand shifts, the budget should be able to shift as well, otherwise, we are optimizing the media plan instead of the business.<\/p>\n\n\n\n<h2 id=\"h-cross-channel-means-one-shared-business-budget\" class=\"wp-block-heading\">Cross-channel means one shared &#8222;business&#8220; budget<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Google optimizes Google. Meta optimizes Meta. Microsoft optimizes Microsoft. Criteo optimizes Criteo. And they are all very good in that, but none of them is responsible for your total ecommerce budget. This is where performance is often lost between platforms.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You can have an amazing winning campaign in Meta and still have a better marginal opportunity in Google Shopping or OpenAI Ads or the opposite. Each platform sees its own auction, its own attribution logic and its own conversion signal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The ecommerce team needs one portfolio view and one comparable business outcome otherwise you just have several local AI optimizers fighting for their own money again \ud83d\ude09. This is exactly why I&#8217;m a strong supporter of the portfolio optimization perspective:  the budget should compete across campaigns and channels against the same business goal, not against separate platform truths.<\/p>\n\n\n\n<h2 id=\"h-short-term-revenue-and-long-term-profit-can-point-in-different-directions\" class=\"wp-block-heading\">Short-term revenue and long-term profit can point in different directions<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">We know the situation, sometimes you just need to hit this quarter target XYZ or next quarter for whatever business reason. Although we all want to go for &#8222;long&#8220; in marketing, for the best balanced budget allocation, we sometimes need to go short&#8230; This is where scenario planning gets practical: Maybe you need to hit revenue this month because the board target is fixed, great! Maybe next quarter the focus is margin, also fine.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Both are valid, but they are different optimization problems. The questions i like to ask:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>What allocation maximizes revenue now?<\/li>\n\n\n\n<li>What allocation maximizes gross profit?<\/li>\n\n\n\n<li>If the budget increases by 20%, where is there still opportunities?<\/li>\n\n\n\n<li>If the budget drops by 10%, where can we reduce with the least expected damage?<\/li>\n\n\n\n<li>Which categories are already saturated?<\/li>\n\n\n\n<li>What happens if we prioritize new customers instead of total revenue?<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">This is where <a href=\"https:\/\/www.nexoya.com\/scenario-simulation\/\">Scenario Simulation<\/a> becomes useful. You can compare different targets before you move real budget. (Yes, we built this, so obviously I like it ;), but the thinking is useful even if you do it manually.)<\/p>\n\n\n\n<h2 id=\"h-what-does-this-look-like-in-practice\" class=\"wp-block-heading\">What does this look like in practice?<\/h2>\n\n\n\n<h3 id=\"h-flaschenpost-optimize-for-efficiency-not-just-more-spend\" class=\"wp-block-heading\">Flaschenpost: optimize for efficiency, not just more spend<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Flaschenpost is a very ecommerce example because the setup is complex: more than 35 campaigns across Google Shopping, Microsoft Ads, Meta and Criteo, in four languages, with a strict cost-revenue-ratio target. The business goal was not &#8222;spend more&#8220;. It was to grow efficiently while keeping CRR under control.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The published results were:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>+22% ROAS<\/strong><\/li>\n\n\n\n<li><strong>-18.5% CRR<\/strong><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">What I like about this case is that the target is already much closer to the business economics than a simple conversion metric. And they are now moving further toward profit optimization, which makes sense because once revenue optimization works, the next question is what profit the revenue creates.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.nexoya.com\/case-studies\/achieving-more-with-less-flaschenpost-hits-22-roas-and-decreases-crr-successfully-by-18-5\/\">Read the Flaschenpost case study<\/a><\/p>\n\n\n\n<h2 id=\"h-the-questions-i-would-ask-before-moving-ecommerce-budget\" class=\"wp-block-heading\">The questions I would ask before moving ecommerce budget<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">I would keep it simple:<\/p>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li>What is the business outcome we care about now\/today and tomorrow: revenue, margin, profit, new customers, or something else?<\/li>\n\n\n\n<li>Which products or categories have different economics that should not be hidden inside one ROAS?<\/li>\n\n\n\n<li>Where are we already close to saturation?<\/li>\n\n\n\n<li>Where do we still have opportunities if we add another 10k Euro?<\/li>\n\n\n\n<li>Which inventory, market or promotion constraints matter right now \/ happen next quarter?<\/li>\n\n\n\n<li>What changes in the next 2-4 weeks that the historical data does not know yet?<\/li>\n\n\n\n<li>How will we validate whether the new allocation actually improved the full portfolio?<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">If these questions are clear, the budget conversation becomes much more useful. You stop asking which platform had the prettiest ROAS last week and start deciding where the next euro should go. For ecommerce, the biggest budget mistake is often treating historical ROAS as if it were a forecast, but it is not. The goal is not to find the perfect metric. The goal is to connect media decisions to the business economics and move fast enough when those economics change.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>ROAS is great, everybody understands it, it updates fast, and it gives you a nice number to put into a dashboard. Great \ud83d\ude09But it can also make budget allocation look much easier than it really is. Lets take an example: Imagine Campaign A has a ROAS of 800% and Campaign B has a ROAS of [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":30777,"menu_order":0,"template":"","meta":{"_acf_changed":false},"tags":[188],"blog_category":[25],"resource_gallery_category":[],"class_list":["post-30773","blog_posts","type-blog_posts","status-publish","has-post-thumbnail","hentry","tag-cross-channel-optimization","blog_category-performance-marketing-archives"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.4 (Yoast SEO v28.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Marketing Budget Allocation in Ecommerce: The Highest ROAS Is Not Always the Best Investment - Nexoya<\/title>\n<meta name=\"description\" content=\"Understand the complexities of marketing budget allocation ecommerce. 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