Holiday Ad Budgets by Industry (2025 Benchmarks & Calculator)

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Here's the question I get every October: "How much should I spend on holiday ads?"

And here's what most people do—they look at last year's numbers, add ten or twenty percent, cross their fingers, and hope it works. Or they ask "what's normal for my industry" and use some generic percentage they found in a blog post from 2019.

Both approaches are broken. Your holiday ad budget needs to be built from your unit economics—your Average Order Value, your gross margin after discounts, your fulfillment costs—not industry averages or last year's guesses.

That said, benchmarks matter. They tell you if you're wildly off base. If you're spending three percent of revenue on ads while your competitors are spending twelve percent, you're probably losing market share. If you're spending twenty percent while everyone else is at eight percent, you might be overpaying for results.

So let's do this right. I'll give you the industry benchmarks for 2025, then show you exactly how to calculate your specific budget using the interactive tool below.

The Budget Formula (Revenue × Margin × Target ROAS)

The formula everyone should use but almost nobody does:

Step 1: Calculate your contribution margin per order = (AOV × Gross Margin %) - Fixed Costs per Order

Step 2: Determine your allowable Customer Acquisition Cost = Contribution Margin × 0.7 to 0.8 (leave room for profit)

Step 3: Set your target ROAS = AOV ÷ Allowable CAC

Step 4: Calculate total budget = Projected Revenue × Industry Benchmark % (adjusted for your margin reality)

Let me show you why this matters with a real example.

Say you're a beauty brand. Your AOV is seventy-five dollars, your gross margin before discounts is fifty-five percent, you're running a twenty-five percent Black Friday sale, and your fulfillment costs are eight dollars per order.

Here's the math: Gross margin after discount = 55% × 0.75 = 41.25%. Contribution per order = ($75 × 41.25%) - $8 = $22.94. Allowable CAC (at 75% of contribution) = $17.20. Target ROAS = $75 ÷ $17.20 = 4.36x.

Now you know: anything below 4.36x ROAS is costing you money, even though it feels like you're making sales. This is the number that matters, not some vague "good ROAS is 3x" advice you read somewhere.

For the complete methodology on setting ROAS targets by margin, see our detailed guide on Q4 ecommerce ROAS targets.

Why Industry Benchmarks Matter (But Aren't Everything)

Benchmarks tell you what's normal in your category. If typical beauty brands spend ten to twelve percent of holiday revenue on ads and you're spending five percent, you're either hyper-efficient (unlikely) or under-investing and losing to competitors who are more visible.

But benchmarks are averages. They include profitable brands and unprofitable brands, smart operators and people burning cash.

Use them as guardrails, not gospel. If you're significantly above the range for your industry, audit your campaigns—you might be overpaying or targeting poorly. If you're significantly below, you might be leaving revenue on the table.

The 2025 Market Context (What's Different This Year)

Two big shifts for Q4 2025 that affect budgeting:

First: CPCs are elevated across Google and Meta due to aggressive bidding from international players and more brands competing for the same inventory. Meta CPCs are up thirty to thirty-five percent year-over-year in Q4. Google Shopping CPCs are similarly elevated.

Second: Consumer spending patterns have shifted. People are bargain-hunting across the entire Thanksgiving week, not just Friday and Monday. Adobe forecasts $253.4 billion in online holiday sales, but growth is slower than previous years—meaning more competition for less incremental demand.

Translation for your budget: you'll need slightly higher spend to achieve the same results as last year, OR you'll need tighter targeting and better creative efficiency to maintain profitability at similar spend levels.

Most brands should plan for a ten to fifteen percent increase in total budget versus 2024, with stricter CPA controls and more aggressive creative rotation to combat rising costs.

Industry Budget Tables (2025 Benchmarks)

These tables show realistic Q4 ad spend as a percentage of projected seasonal revenue, typical AOV ranges, target ROAS ranges, and tactical notes by industry.

Data is aggregated from advertiser benchmarks, platform reporting, and industry surveys conducted through 2024-2025.

Retail & Consumer Goods

Home & Lifestyle

Electronics & Tech

Health, Fitness & Wellness

Toys, Kids & Baby

Specialty & Niche

How to use these tables: Find your category and AOV range. If your gross margin is significantly different from category norms (higher or lower), adjust the ROAS target accordingly—higher margins allow lower ROAS, lower margins require higher ROAS.

These percentages represent total digital ad spend during the holiday season (typically November through early December), not just Black Friday weekend.

Daily Caps & Peak-Day Multipliers

Having a total budget is step one. Knowing how to pace it daily is step two.

Most brands make the mistake of setting a monthly budget and letting platforms spend it evenly. That's wrong. Holiday shopping isn't linear—there are massive peaks on specific days that require concentrated spend.

The Weekly Pacing Framework

Here's how to structure your daily spend across a typical four-week holiday campaign:

Week 1 (Early November): 15-20% of total budget. Goal: Audience warming, testing creative, building remarketing pools. Daily spend: baseline.

Week 2 (Mid-November): 20-25% of total budget. Goal: Ramp up awareness, launch teaser campaigns. Daily spend: baseline × 1.1-1.2.

Week 3 (Thanksgiving Week): 35-40% of total budget. Goal: Peak conversion period. Daily spend: baseline × 1.5-2.0 on Black Friday and Cyber Monday, baseline × 0.8-1.0 on shoulder days.

Week 4 (Post-Cyber Week): 15-25% of total budget. Goal: Extended sales, last chance messaging. Daily spend: baseline × 0.7-0.9.

Peak Day Multipliers (Specific Days)

If your baseline daily budget is one thousand dollars, here's what it should look like on key days:

• Black Friday: $1,500-$2,000 (1.5-2.0x multiplier)
• Saturday/Sunday after BF: $1,000-$1,200 (1.0-1.2x)
• Cyber Monday: $1,500-$2,000 (1.5-2.0x multiplier)
• Tuesday-Thursday after CM: $700-$900 (0.7-0.9x)

Why the drop after Cyber Monday? Consumer intent shifts. People who were going to buy have mostly bought. The remaining shoppers are either late planners or deal hunters waiting for deeper discounts.

You still want presence during that period, but aggressive spending rarely pays off. Better to save budget for another push in mid-December if you have gift-appropriate products.

Setting CPA Guardrails by Day

Peak days don't just get more budget—they also need tighter CPA controls because everyone is bidding aggressively.

Use this rule: On peak days (Black Friday, Cyber Monday), your CPA ceiling should be 90-95% of your calculated allowable CAC. On non-peak days, you can allow 100-105% if performance is strong.

Why? Peak days have the highest conversion rates but also the highest CPCs. You need a buffer. If your allowable CAC is twenty dollars, cap campaigns at eighteen dollars on Black Friday. If a campaign exceeds that for more than four consecutive hours, reduce budget by twenty-five percent and alert yourself.

For the complete implementation of budget guardrails and PMax structure, see our Performance Max budget strategy guide.

Cross-Channel Budget Splits (Google/Meta/TikTok)

Not all platforms are created equal for holiday shopping. Each plays a different role in your funnel.

The Three-Platform Strategy

Google Ads = Capture Engine

People searching for "best wireless headphones under $100" or "iPhone 15 deals" are ready to buy now. Google captures existing intent.

Role: Bottom-of-funnel conversion, Shopping feeds, brand defense, competitor conquesting.

Budget allocation: 45-55% of total ad spend for most brands. Higher if your AOV is above $150 (people search more for considered purchases). Lower if you're in impulse-buy categories.

Meta (Facebook/Instagram) = Demand Creation + Retargeting

People aren't on Facebook looking to buy your product. You need to create demand with compelling creative and proof, then retarget them when they're closer to purchase.

Role: Mid-funnel consideration, social proof (UGC, reviews), retargeting hot audiences, lookalike prospecting.

Budget allocation: 30-40% of total ad spend. Higher for visual products (fashion, beauty, home decor) where lifestyle imagery converts. Lower for technical products where specs matter more than aesthetics.

TikTok = Discovery & Impulse

TikTok is your awareness engine. People discover products they didn't know existed through entertaining content. It's especially powerful for lower-AOV impulse purchases.

Role: Top-of-funnel discovery, UGC hooks, younger demographics, trend-based selling.

Budget allocation: 10-25% of total ad spend. Higher if your AOV is under $75 and your audience skews younger. Lower if you're selling considered purchases to older demographics.

Budget Split by AOV (Framework)

Here's a starting framework based on Average Order Value:

Low AOV ($20-$50):

• Google: 40%
• TikTok: 40%
• Meta: 20%

Rationale: Impulse purchases do well on TikTok. Google captures search intent. Meta is primarily retargeting.

Mid AOV ($50-$150):

• Google: 50%
• Meta: 30%
• TikTok: 20%

Rationale: Standard split. Google captures intent, Meta builds consideration, TikTok seeds discovery.

High AOV ($150+):

• Google: 55%
• Meta: 35%
• TikTok: 10%

Rationale: Considered purchases need more time and social proof. Google and Meta dominate. TikTok is awareness only.

These are starting points. Adjust weekly based on actual ROAS performance by platform. If TikTok is crushing your targets, shift more budget there. If Meta CPA is spiking and ROAS is tanking, pull back.

For tactical Meta strategy including creative volume and CBO/ABO decisions, check our complete Meta ads guide.

Implementation: Building Your Budget Plan

Theory is nice. Execution is what matters. Here's exactly how to build your holiday budget plan this week.

Step 1: Calculate Your Allowable CAC

Use the formula from earlier:

Contribution Margin = (AOV × Gross Margin %) - Fixed Costs per Order

Allowable CAC = Contribution Margin × 0.75 (or 0.8 if you're aggressive)

Target ROAS = AOV ÷ Allowable CAC

Write these numbers down. They're your North Star. Every campaign, every platform, every day gets judged against these metrics.

Step 2: Set Total Budget from Revenue Projection

Project your seasonal revenue (November through early December). Be realistic—look at last year's numbers and adjust for market conditions.

Multiply by the industry benchmark percentage for your category (from the tables above). This gives you a starting total budget.

Sanity check: Does this budget, at your target ROAS, generate enough conversions to hit your revenue projection? If not, adjust either budget or ROAS target (carefully).

Step 3: Split Budget by Platform

Use the AOV-based splits from the previous section as a starting point.

Adjust based on historical performance if you have it. If Google consistently outperforms Meta by fifty percent on ROAS, tilt more budget to Google.

Reserve ten to fifteen percent as a "flex pool" that you can shift to whichever platform is performing best during the actual sale period. Don't lock everything in advance.

Step 4: Create Weekly and Daily Pacing Plan

Break your total budget into the four-week framework from earlier.

Then break each week into daily targets, applying peak-day multipliers for Black Friday and Cyber Monday.

Build a simple spreadsheet: Column A is date, Column B is planned daily spend, Column C is actual spend (you'll fill this in daily), Column D is variance, Column E is cumulative variance.

Check this every morning during the campaign. If you're underspending by more than twenty percent, increase bids or budgets. If you're overspending, tighten CPA targets or reduce budgets.

Step 5: Set Platform-Specific Budget Caps

Within each platform, set daily budget caps at the campaign level.

Google: Cap PMax, Shopping, and Search campaigns separately. Don't let one campaign eat the entire budget. Typical split within Google: 40% PMax, 35% Shopping, 25% BOFU Search.

Meta: If using CBO (Campaign Budget Optimization), set a campaign daily budget and let Meta allocate across ad sets. If using ABO (Ad Set Budget Optimization), divide your Meta budget by number of ad sets and cap each individually.

TikTok: Start with lower daily budgets (TikTok spends fast). Set campaign budgets at fifty to seventy percent of what you think you need, then scale up if performance warrants.

Step 6: Configure CPA Ceiling Rules

In each platform, set up automated rules or manual alerts:

Google: "If campaign CPA exceeds $X for 3 consecutive hours, reduce daily budget by 25% and send email alert."

Meta: "If ad set CPA exceeds $Y for $500 in spend, pause ad set and send notification."

TikTok: "If campaign CPA exceeds $Z, reduce budget to 50% and alert."

Your X, Y, Z values are your calculated allowable CAC from Step 1, possibly adjusted down slightly for peak days.

Step 7: Build Scenario Plans

Plan for three scenarios: Best Case (campaigns crush ROAS targets), Base Case (campaigns hit targets), Worst Case (campaigns underperform).

Best Case Plan: Where will you get additional budget to scale winners? Can you pull from other marketing channels? Can you increase credit lines? Decide this now, not at ten PM on Black Friday when you're trying to scale a hot campaign.

Base Case Plan: This is your default execution. Stick to the pacing plan, make minor adjustments, don't panic.

Worst Case Plan: At what point do you reduce budgets or pause campaigns? If ROAS drops below your break-even threshold for how many hours do you give it before pulling back? Decide the trigger points in advance.

Frequently Asked Questions

What percent of revenue should I spend on holiday ads?

For most ecommerce brands, five to twelve percent of projected holiday revenue is a realistic ad budget range. Specific percentage depends on your industry, margins, and growth stage.

Higher percentages (10-15%+) make sense for high-margin categories like beauty and fashion, or if you're in growth mode prioritizing market share over short-term profitability. Lower percentages (5-8%) make sense for low-margin categories like electronics, or if you're optimizing for immediate profitability.

Use the industry tables earlier in this article as benchmarks for your specific category.

How do I know if my budget is too high or too low?

Your budget is too high if: You're consistently hitting ROAS targets but losing money after accounting for fulfillment costs and discounts. Or your campaigns are limited by performance (low Quality Score, high CPAs) rather than budget—more money won't help.

Your budget is too low if: You're hitting ROAS targets and campaigns are showing "Limited by Budget" for extended periods with high impression share loss due to budget. Or you're seeing strong performance on small spend and confident you could scale profitably.

The sweet spot: Campaigns run most of the day without budget constraints, hitting ROAS targets, with impression share loss due to budget under fifteen percent.

Should I use the same budget every day or vary by day of week?

Vary by day, especially during holiday season. Black Friday and Cyber Monday deserve 1.5-2.0x your baseline daily budget. Weekends during holiday season typically perform better than weekdays (people have time to shop), so modest increases make sense.

Early November can run at baseline or slightly below while you're testing and warming audiences. Late November (Thanksgiving week) is your peak—concentrate spending there. Early December can scale back unless you sell last-minute gifts.

How much should I spend on brand search vs. non-brand?

Brand search should generally be uncapped—these are your highest-ROAS clicks and you can't let competitors steal your branded traffic.

Typical split of your Google Search budget: 60-70% to BOFU non-brand (high-intent product and competitor terms), 30-40% to brand defense. If you have very strong brand awareness, brand might be higher percentage. If you're lesser-known, non-brand will dominate.

Monitor brand impression share during Black Friday. If it drops below ninety-five percent due to budget, increase immediately.

Can I reallocate budget between platforms mid-campaign?

Absolutely, and you should. Don't lock your budget allocation in stone.

Check performance by platform every two to three days during the campaign. If one platform is crushing targets while another is underperforming, shift budget toward the winner.

Make shifts in ten to twenty percent increments, not wholesale changes. Algorithms need stability to optimize. Constantly yanking budget around prevents learning.

Reserve that ten to fifteen percent flex pool mentioned earlier specifically for mid-campaign reallocation based on performance.

What's the difference between CBO and ABO on Meta, and which should I use?

CBO (Campaign Budget Optimization) means you set one budget at the campaign level and Meta allocates across ad sets dynamically based on performance. ABO (Ad Set Budget Optimization) means you set individual budgets per ad set and Meta spends them independently.

For Black Friday, CBO is generally better because Meta's algorithm shifts spend to best-performing ad sets in real-time as conditions change. You don't have to manually rebalance constantly.

Use ABO only if you're running deliberate tests where you need equal spend to each audience for fair comparison, or if you have strict requirements to spend specific amounts on specific segments.

How do I budget for creative production?

Budget five to ten percent of your total ad spend for creative production (photos, videos, UGC creator fees).

For a ten thousand dollar holiday ad budget, that's five hundred to one thousand dollars for creative. For one hundred thousand dollars in ad spend, that's five to ten thousand for creative.

UGC (User Generated Content) is more cost-effective than professional studio shoots and often performs better. Expect to pay $100-$300 per creator for one to three videos, or use platforms like CreatorIQ to source at scale.

Don't skimp on creative. Bad creative at low budgets still loses money. Good creative at higher budgets prints cash.

Should I increase budgets on Cyber Monday or keep them the same as Black Friday?

Cyber Monday deserves similar budget to Black Friday—use the same 1.5-2.0x multiplier on your baseline daily spend.

Consumer behavior data shows Cyber Monday rivals Black Friday for online sales, especially for electronics and tech products. Some categories (B2B, office equipment, software) actually perform better on Cyber Monday because people are back at work and shopping on company time.

The key: Have fresh creative and messaging ready for Cyber Monday. Don't just run the same ads as Friday—people have seen them already. Refresh hooks, update urgency language, highlight different products.

What if my budget runs out before the end of the campaign?

This means you under-budgeted, over-spent due to poor pacing, or campaigns performed better than expected and you scaled aggressively.

Prevention: Use the daily pacing tracker from Step 4 above. Check actual vs. planned spend every morning. If you're burning through budget too fast, tighten CPA targets or reduce budgets before you hit zero.

If it happens: Decide if adding more budget makes sense based on ROAS. If campaigns are profitable and performing well, find additional budget (shift from other channels, use credit lines, reduce spending in other areas). If campaigns are underperforming, running out of budget might actually save you from further losses—don't add more bad money to bad campaigns.

How far in advance should I finalize my holiday budget?

Finalize your total budget and platform splits at least four weeks before Black Friday (late October for 2025). This gives you time to set up campaigns, create creative, and start audience warming.

Daily pacing and specific campaign budgets can be adjusted closer to the sale period—finalize those two weeks out.

Keep your flex pool (10-15% of total) unallocated until you see which platforms and campaigns are performing during the actual sale. Allocate that budget dynamically based on results.

Conclusion: Budget With Confidence

Here's what you now know that most of your competitors don't: your exact allowable CAC based on real unit economics, not guesses. Industry benchmarks that tell you if you're in the right ballpark. A platform allocation framework based on AOV and funnel stage. And a daily pacing system that prevents both underspending and wasteful overspending.

Most brands fail at holiday advertising not because their creative is bad or their products don't resonate—they fail because they don't know their numbers. They spend based on gut feeling, they don't pace properly, and they either run out of budget on peak days or blow their entire budget before the sale even starts.

You won't make those mistakes.

Your action plan:

• Run your numbers through the calculator below to get your exact allowable CAC and target ROAS
• Compare your planned spend percentage to the industry benchmarks for your category
• Split your budget across Google, Meta, and TikTok using the AOV-based framework
• Build your daily pacing plan with peak-day multipliers for Black Friday and Cyber Monday
• Set CPA ceiling rules and budget caps before the sale starts
• Check performance daily and reallocate budget to winners

Use the interactive calculator below to run your specific numbers right now.

Continue Learning:

• Black Friday Google Ads Strategy 2025 (Complete Guide)
• Q4 Ecommerce ROAS Targets (Set by AOV & Margin)
• Performance Max Budget Strategy for Black Friday
• Black Friday Ad Schedule Template (Week-by-Week)