Methodology: Marketing Budget Allocator

1. Scope

Allocates a total marketing budget across channels with per-channel ROAS estimates and a blended return projection. It does not perform media-mix modelling or account for incrementality.

2. Inputs and outputs

Inputs

totalBudget number (currency)
channels array

Each: name, allocationPercent, estimatedRoas.

Outputs

perChannelSpend

totalBudget × allocationPercent.
perChannelRevenue

spend × roas.
blendedRoas

totalRevenue / totalBudget.

Engine source: src/lib/marketing-budget-allocator/engine.ts

3. Formula / scoring logic

spend_i  = total_budget * alloc_i
revenue_i= spend_i * roas_i
blended  = sum(revenue) / total_budget

4. Assumptions

Channel ROAS is independent (no saturation, no cross-channel halo).
Allocation percentages must sum to 100%.

5. Data sources

This tool relies on user inputs and standard arithmetic; no external benchmark data is bundled. When a question depends on an industry reference (for example, typical churn rates or hourly-wage medians), the linked adjacent tools cite their primary sources on their own methodology pages.

6. Known limitations

Real channels saturate at higher spend levels. Doubling Facebook spend does not double revenue past a point.
Multi-touch attribution is a separate problem the tool cannot solve.

7. Reproducibility

Input
budget = $10,000; channels = [{SEO, 40%, 5×}, {Paid, 40%, 2.5×}, {Email, 20%, 8×}].

Expected output
spend = 4k/4k/2k, revenue = 20k/10k/16k, blended = 4.6×.

8. Change log

2026-04-24 methodology page first published.