Planning your 2027 paid media budget: a UK guide

To plan a 2027 paid media budget, start with the sales or leads you need and work back to what you can afford to pay for each one. Then check search demand to choose your lead channel, test that the budget can buy enough conversions to learn from, hold back about 20% for testing, and spread the rest across the year by demand rather than evenly.

Here’s how we’d work through that, whether you’re setting your first budget or rebuilding last year’s.

How do you set a paid media budget for 2027?

Set it in six steps. Each one checks the step before, so you find out on paper, not in the account, if a budget can’t do what you need it to.

1. Set the goal. Decide how many sales or leads you need each month, and how many should be new customers.
2. Work out what you can pay. Use your margin to set a maximum cost per sale or lead.
3. Do the maths. Target sales × target cost per sale = monthly media budget.
4. Choose your lead channel. Check search demand first.
5. Test the budget can learn. Compare it with the volume each platform needs.
6. Split it. Hold back about 20% for testing, then shape the rest by month.

How do you work out a first-year budget?

Work back from the sales you need, using a cost per sale your margin can support. If you’ve got no history, this is an estimate, so treat your first few months as a test of the numbers, not proof of them.

Here’s a made-up example. A business needs 40 sales a month and makes £80 profit per sale before advertising. It can’t pay more than £80 per sale, so it sets a target of £50 to leave some profit:

40 sales × £50 = £2,000 a month

To turn that into clicks, conversion rates and a daily budget, use our ad budget calculator. Our guides to Google Ads costs and Meta ads costs cover what affects the prices you’ll pay.

Media isn’t the whole cost. Allow for agency or management fees, creative and tracking too, and check the full picture still leaves a profit.

Should you lead with Google or Meta on a small budget?

Check search demand first. On a budget of around £1,000 to £3,000 a month, I look at whether enough people already search for what the business sells. If they do, lead with Google to capture that demand. If they don’t, because the brand or category is new, lead with Meta to create it.

Google’s Keyword Planner and Google Trends will show you whether the demand is there, and how it moves through the year. For more on the choice, read Google Ads vs Meta ads.

Can your budget buy enough conversions to learn from?

Check this before you commit, because a budget spread too thinly can spend everything and still teach you very little. Both platforms give a useful guide:

Back to our example, at a £50 target cost per sale:

• Google: £50 × 15 = £750 a month, which fits comfortably within £2,000.
• Meta: £50 × 50 = £2,500 a week per ad set, well above the whole monthly budget.

That doesn’t rule Meta out. You could use one ad set, or optimise for an earlier step that happens more often, such as adding to basket, accepting that the signal is weaker. But it tells you what to expect, and why splitting £2,000 across several campaigns would probably give you little to act on.

These are guides, not guarantees. If your budget falls short, the choice is to raise it, lower your goal or narrow your focus. Our guide to structuring campaigns for automation explains how to consolidate.

How much budget should you hold back for testing?

I keep about 20% of the budget back for testing, enough to read the results. On £2,000 a month, that’s about £400 for new creative, audiences or channels, and £1,600 for what already works.

Adjust that for how mature the account is. In a new account almost everything is a test, so the split matters less than keeping the number of tests small. In an established account, 20% gives you room to find the next winner without putting your core results at risk. A creative testing framework helps you get a clear answer from that money.

Why shouldn’t you split your budget evenly by month?

Because demand isn’t even. The planning mistake I see most in January is splitting the year’s budget evenly by month, instead of following when demand actually happens. A flat plan tends to overspend in quiet months and run short when customers are most ready to buy.

Use your own monthly sales and Google Trends to shape the plan. In this made-up example, a retailer with a £36,000 annual budget makes 40% of its sales in the last three months of the year:

Don’t copy last year’s pattern blindly. A quiet month might be quiet because you cut spend, or a busy one might be down to a one-off promotion. For peaks, see our Black Friday and Christmas and January plans, and track each month with our budget pacing calculator.

How often should you review a paid media budget?

Check pacing weekly, results monthly and the budget itself each quarter. A plan made in November is only a starting point, and real costs and conversion rates should replace your estimates as soon as you have them.

Move budget based on business results: revenue, profit after ad spend, cost per new customer and MER, rather than each platform’s own reporting alone. Before you scale a channel, check the tracking behind its numbers, because broken conversion tracking makes every budget decision less reliable. If you spend enough to run one, a lift test shows how many sales a channel really adds.

Your 2027 budget checklist

1. Set monthly targets for sales or leads, and for new customers
2. Work out a maximum cost per sale or lead from your margin
3. Calculate the monthly media budget and add fees, creative and tracking
4. Check search demand and choose your lead channel
5. Test the budget against Google’s and Meta’s volume guidance
6. Hold back about 20% for testing, adjusted for account maturity
7. Shape the budget by month using your sales and Google Trends
8. Check conversion tracking before January spend starts
9. Book weekly pacing checks and a quarterly budget review

FAQs

How much should a small business spend on paid media in 2027?

There’s no single right figure. Start with the sales you need and the cost per sale your margin can support, then check that the result can buy enough conversions for the platform to learn from. If it can’t, narrow your focus to one channel or lower your first target.

What percentage of revenue should go on advertising?

Percentage rules are too general to plan with, because margins, growth goals and sectors vary so widely. Use your margin and target cost per sale to set the budget, then look at total ad spend as a share of revenue through MER to see how it’s working overall.

When should you plan next year’s budget?

Start in November or December if your year begins in January, so there’s time to review the year, agree targets and fix tracking before spend starts. If your financial year ends in March or April, plan a couple of months before it starts.

Should you spend more in January?

Only if your customers are in the market. Demand rises in January for some categories, such as fitness and travel, and costs can ease after Christmas as some advertisers pull back. Check your own sales and search data rather than assuming the new year is a peak for you.

What if the budget is too small for Meta’s learning phase?

You can still run Meta, but use fewer ad sets, or optimise for an earlier event that happens more often. Results may take longer to read, so judge them over a longer period and don’t make big changes every few days.

In short

Start from the sales you need and the cost per sale your margin allows. Check search demand to choose your lead channel, and check the budget can buy enough conversions to learn from. Hold back about 20% for testing, shape the rest by demand rather than splitting it evenly, and review it every quarter using business results.

Sources

The platform documentation this guide is checked against. Last checked November 2026.

• Best practices for generating high-quality leads, Google Ads Help
• Refine your new keywords in Keyword Planner, Google Ads Help
• About learning limited, Meta Business Help Centre
• Google Trends, Google

Want a second opinion on your 2027 plan? Book a paid media audit, try our ad budget calculator or let’s chat.