Startup’s Guide to Ecommerce Advertising in 2025

Did you know that 85% of global consumers shop online?

We think you do... probably, that’s the reason you ventured into this industry!

And we’re here to commend your farsightedness because 2025 global ecommerce retail sales are projected to hit $7.4 trillion.

Everyone in the industry would like a share of this big projection. However, if you’ve recently launched your ecommerce brand, chances are you’re juggling a hundred things at once, such as inventory, shipping, product pages, and customer support.

And somewhere in the mix, you’re wondering: How do I actually get people to discover and buy from my store?

That’s where ecommerce advertising comes in.

Ecommerce advertising is a paid strategy that helps your brand reach the right people at the right time with the right product. Whether it’s a Google Shopping ad or a TikTok video, it’s one of the fastest ways to turn browsers into buyers — with speed, scale, and measurable ROI.

And, as a startup founder, that speed and clarity matter.

Because here’s the thing: Organic growth takes time. But when you're just starting out, you need predictable revenue and traction now.

In this guide, we’ll unpack everything you need to know about ecommerce advertising:

• How it is different from traditional ads.
• Benefits of ecommerce advertising.
• Types of ecommerce advertising.
• Best platforms to advertise.
• Top strategies for ecommerce startups.
• In-house vs. ecommerce marketing agency.
• Ecommerce KPIs to consider.
• Pitfalls to avoid.

By the end, you’ll not only understand how to run ads, but you’ll also know how to use them as a growth engine for your brand.

Let’s dive in.

What is ecommerce advertising?

Let’s break it down simply:

Ecommerce advertising is a paid marketing strategy that promotes your online store’s products or services through digital platforms like Google, Facebook, Instagram, TikTok, and beyond.

It’s part of the broader umbrella of ecommerce marketing. But while marketing includes things like email campaigns, SEO, and content, advertising is where you pay to play. Instead of relying on the algorithm, you’re investing your budget to push your products in front of your ideal customers across different platforms to drive traffic, conversions, and ultimately, sales.

How does ecommerce advertising actually work?

Here’s the basic flow:

• You buy ad space on platforms where your target audience hangs out—think search engines like Google, social media like Facebook or TikTok, or display networks that show ads across websites.
• You create an ad, typically using product images or videos, copy, and a call-to-action (like “Shop Now”).
• You target specific audiences based on things like interests, location, demographics, and past behavior.
• The ad runs, users click (or don’t), and you track what happens next—views, clicks, add-to-carts, purchases, etc.

Where do these ecommerce ads show up?

This is where ecommerce advertising gets fun. Your ads can appear:

• On search engines like Google or Bing — great for high-intent shoppers searching for something specific
• On social media platforms like Facebook, Instagram, TikTok, or Pinterest — ideal for discovery, storytelling, and visual browsing
• Across display networks — think banners or product ads on news websites, blogs, or YouTube
• Inside apps or even on streaming platforms — depending on where your audience is most active

Each placement has its own strengths (we’ll get into strategy later) but the idea is to meet people where they are and not just wait for them to stumble onto your website.

What makes ecommerce advertising different from traditional ads?

Unlike print, billboards, or even TV, digital ecommerce ads are data-driven. You can:

• Launch a campaign today and see results in hours
• Track metrics like click-through rate (CTR), conversion rate (CVR), cost per acquisition (CPA), and return on ad spend (ROAS)
• Test different audiences, creatives, and offers in real time
• Retarget visitors who abandoned their cart or viewed a product but didn’t convert

That level of feedback and control is why paid ads have become the go-to growth channel for ecommerce startups.

Here are some examples of ecommerce advertising in action

• A Google Shopping Ad showing your product at the top of the search results, complete with price and reviews.
• A video ad on TikTok showing a customer unboxing your product with a “Shop Now” link.
• An Instagram carousel ad featuring multiple product angles.
• A retargeting ad on Facebook reminding someone to complete their purchase.
• A Pinterest ad that pops up while someone’s searching for “spring outfit ideas”.

Benefits of ecommerce advertising

You’re probably used to wearing ten hats as a founder — handling product, operations, and customer service — all while trying to figure out how to grow fast without burning through cash. That’s where ecommerce advertising comes in. It's one of the few growth channels that gives you both control and clarity from day one.

Let’s break down the advantages of paid advertising for ecommerce startups.

1. Instant visibility to beat competitor

When you launch your store, the biggest hurdle is obscurity. You might have a great product and a sleek site, but if no one sees it, no one buys.

That’s where paid ads give you a head start. With the right targeting and a compelling creative, your brand can appear:

• At the top of Google Search results through Shopping Ads (great for high-intent buyers)
• In Instagram or Facebook feeds with visual-first carousel ads
• In front of TikTok users with native-style video ads
• On Pinterest, where people are actively searching for inspiration or planning a purchase

Instead of waiting months for SEO or hoping for a viral post, ecommerce advertising lets you start generating traffic and orders today. This is crucial when you're racing against competitors to prove product-market fit.

2. Hyper-targeted reach that matches your niche

Unlike traditional ads that blanket a message to everyone, ecommerce ads let you focus on the exact type of customer you're trying to attract.

You can:

• Target users by interests, behaviors, and demographics
• Create lookalike audiences based on your best customers
• Retarget shoppers who viewed a product or abandoned cart
• Use geo-targeting to focus on specific regions or cities
• Sync custom audiences from tools like Klaviyo or Shopify’s Audience Sync

For a startup with a limited budget, this level of targeting can be quite helpful in terms of bagging the first batch of conversion.

3. Scalability and control

With ecommerce advertising, every dollar is trackable, and every campaign can be optimized for better performance. As a result, you don’t need to guess why a sale happened or where a cent of your ad budget went.

Here are some ecommerce KPIs aka metrics to monitor; we will cover them in detail below:

• ROAS (Return on Ad Spend) – the revenue you earn for every $1 spent
• CAC (Customer Acquisition Cost) – how much it costs to acquire a new customer
• CTR (Click-through Rate) – how compelling your ad is
• CVR (Conversion Rate) – how well your traffic is converting on-site
• AOV (Average Order Value) – how much people spend per purchase

4. Faster feedback loop for product-market fit

Ecommerce advertising isn’t just about selling. It is also a smart way to learn what your customers actually want. Your ad campaigns become live experiments, offering real-time data on:

• Which product images or videos perform best?
• What copy or offer gets the highest click-throughs?
• Whether free shipping, bundles, or discounts move the needle?
• Which audience segments engage the most?

In just a few hundred dollars, you can learn what would’ve taken months through organic testing. That makes paid ads a great source of validation for your startup, too.

5. Full-funnel impact

That’s the best thing about running ads — you can taget any funnel segment as you want and make sure that your message reaches them.

You can:

• Run TOFU (top-of-funnel) ads for awareness and storytelling
• Use MOFU (middle-of-funnel) retargeting to re-engage product viewers
• Launch BOFU (bottom-of-funnel) campaigns with limited-time offers or testimonials to close the sale
• Pair your ads with email flows (via Klaviyo or similar) to improve conversion and retention
• Use retargeting ads to win back cart abandoners or upsell existing buyers

When your funnel is built right, every dollar spent feeds the next step. That’s how paid advertising becomes a sustainable growth engine.

Types of ecommerce advertising

Ecommerce advertising isn’t a one-size-fits-all game. You’ve got plenty of options to choose from. Whether you're launching your first product, trying to build buzz, or squeezing every drop of ROI out of a retargeting campaign, there’s an ad type that can work for you.

Let’s dissect the most effective types of ecommerce advertising, when to use them, and how they actually work in practice:

1. Search engine advertising

This type of ad works great for capturing high-intent shoppers’ attention. When someone heads to Google and types in “best home workout mat,” they’re not in browsing mode. Rather, they’re ready to buy.

That’s the power of search advertising. You’re tapping into existing demand, not creating it from scratch. The most common formats here include:

• Google Shopping Ads – visual, clickable product listings that show up at the very top of the search page, complete with image, price, and reviews.
• Search Text Ads – keyword-based ads that appear above organic results. Great for branded queries or product-specific searches.

Search ads are ideal if you’re selling something people already know they want. And because shoppers are often at the bottom of the funnel, the conversion rates can be impressive.

Bonus: Since every click is trackable, you’ll know exactly how much you’re spending to get a customer and what return you’re earning.

2. Social media advertising

Social ads are less about intent and more about inspiration and impulse. Think of them as digital window shopping but smarter. They meet your ideal customer where they hang out and use sharp visuals to spark curiosity and desire.

Some of the most popular ad types include:

• Instagram carousel or Reels ads – swipe-through product showcases or lifestyle-focused videos that blend right into the feed.
• Facebook retargeting ads – personalized reminders based on past browsing or cart behavior.
• TikTok in-feed videos – short, native-looking videos with high energy and a low barrier to engagement.

These platforms let you zero in on users based on interests, behaviors, demographics, and even past interactions with your brand. The creative matters just as much as the targeting: short-form videos, UGC, aesthetic photography, and emotional storytelling all tend to perform well.

For startups especially, social is a launchpad. If your story is good and relatable, this is where it can be scaled.

3. Display advertising

Display ads are your digital billboards. They might not always drive immediate clicks, but they’re powerful for awareness, retargeting, and recall, especially when layered into a full-funnel strategy.

Here’s how they typically show up:

• Static or animated banner ads on blogs, news sites, or niche communities.
• Retargeting display ads showing products a user viewed, carted, or abandoned.
• Programmatic display placements that follow users across devices based on behavior and intent signals.

Used strategically, display ads can bring back lost visitors, keep your brand top-of-mind, and even support branded search lift aka someone sees your ad, remembers the name, and Googles you later.

Especially if you're in a crowded category, being visible beyond social or search can help you stand out without blowing your budget.

4. Video advertising

You’ve got 5 seconds to make someone stop scrolling. That’s why a good quality video is one of the most impactful formats for ecommerce brands. It brings your product to life, builds trust fast, and gives you space to educate, entertain, or emotionally connect.

Here’s where ecommerce video ads shine:

• YouTube pre-roll ads — play before the main content; great for storytelling and product demos.
• TikTok in-feed videos — styled like native content; ideal for viral potential and relatability.
• Instagram Reels and Stories — with swipe-up CTAs; quick, direct, and immersive.

The beauty is that you don’t need a studio budget. Lo-fi content like user-generated content (UGC, testimonials, or quick unboxing often outperforms sleek brand videos. What matters is clarity, energy, and showing the product in action.

5. Influencer and UGC-driven advertising

People buy from people. Especially in a world where polished ads are tuned out in seconds, real faces and real stories cut through the noise.

You can approach this in a few ways:

• Sponsored influencer content — posts or videos created by creators with niche relevance to your audience.
• Whitelisting creator accounts — where you run ads from the influencer’s handle for added authenticity.
• Repurposing UGC as ad creative — short clips of unboxing, reviews, or everyday use that blend seamlessly into the feed.
• Affiliate ads — where creators earn a cut of sales, keeping your upfront costs lower.

For early-stage ecommerce brands, this kind of social proof builds credibility fast. It also solves the creative fatigue problem, giving you a steady stream of relatable, proven ad content without needing an in-house studio.

6. Retargeting

Let’s be real: most people won’t buy the first time they land on your site. Maybe they got distracted. Maybe they weren’t ready. That doesn’t mean the opportunity is lost.

Retargeting helps you stay in their line of sight and gently nudge them back.

Some high-performing retargeting setups:

• Abandoned cart ads — available on Facebook or Instagram reminding users of what they left behind.
• Dynamic product ads — show the exact item someone viewed, paired with social proof or urgency.
• Email-to-ad sync — uses platforms like Klaviyo, so email non-openers get followed up with via paid ads.
• Cross-device retargeting — make sure users see your brand whether they’re on mobile or desktop.

Retargeting campaigns tend to have higher ROAS and lower CAC than cold campaigns. It’s the most efficient way to capitalize on interest you already paid for.

7. Amazon advertising

If you’re selling on Amazon alongside your own site, their internal ad platform can be a goldmine. This is especially applicable if you want to win market share from direct competitors.

Here’s what that looks like:

• Sponsored Products – appear within search results and product pages.
• Sponsored Brands – feature your logo and multiple products at the top of a search.
• Video ads – increasingly popular and shown on Amazon’s mobile app.
• Display ads – served both on and off Amazon properties to re-engage shoppers.

Amazon ads give you the chance to grab attention when users are deep into purchase mode. Plus, since the competition is often category-specific, you can target exact keywords or ASINs to maximize visibility.

For DTC startups testing Amazon as an additional channel, this can be a smart complement to broader ad campaigns.

What is the best type of advertising for ecommerce?

There’s no one-size-fits-all answer here — and that’s actually a good thing. The “best” type of ecommerce advertising depends on what you’re selling, who you’re selling to, and what stage your business is in. Some formats work better for quick conversions, while others help you build long-term visibility and brand recall.

Here’s how to choose the right type of advertising based on your specific goals and growth stage.

Think of advertising as data-powered storytelling. Each ad format has a job to do — whether that’s catching attention, building trust, or sealing the deal. Once you understand where your product fits in the customer journey, the best ad type becomes a lot more obvious.

Best ecommerce advertising platforms

Once you know what kind of ad you want to run, the next question is: where should you run it? There are dozens of options out there, but not every platform is a good fit for every brand. Especially when you’re just starting out and need results fast, you cannot afford to go after all at once.

Here’s a breakdown of the top ecommerce advertising platforms, how they work, and when they make sense for a growing brand like yours:

Google Ads

If you’re looking to capture shoppers who already have high intent, Google Ads is the most direct route. This platform helps you show up exactly when someone is searching for a product like yours.

Popular formats include:

• Shopping Ads – These display your product image, price, and reviews at the top of Google search results.
• Search Text Ads – Great for keyword-driven campaigns, especially for branded or long-tail product queries.
• Performance Max – Google’s AI-powered campaign type that runs ads across Search, YouTube, Gmail, Display, and Shopping based on your goals and assets.

Facebook and Instagram Ads (Meta)

Facebook and Instagram (managed through Meta Ads Manager) are still powerhouse platforms for ecommerce. Unlike Google, which captures intent, Meta excels at creating demand through visuals and targeting.

You can run:

• Carousel Ads – Highlight multiple products or features in a swipeable format.
• Reels and Stories Ads – Full-screen, mobile-first formats ideal for short videos or bold imagery.
• Dynamic Product Ads – Automatically show relevant products based on users' past behavior on your site.
• Retargeting Campaigns – Bring back visitors who browsed or abandoned their cart.

TikTok Ads

TikTok’s ad platform has exploded in the last few years, especially for DTC brands targeting younger audiences. It’s built for authentic, fast-paced, and relatable content—which is exactly what makes it work so well for ecommerce.

Key ad types include:

• In-Feed Video Ads – Appear natively within users’ For You page.
• Spark Ads – Boost organic content (either yours or creators’) to turn it into paid media.
• TopView or Brand Takeover Ads – Reserved for larger campaigns but incredibly high impact.

Pinterest Ads

Pinterest flies under the radar, but it’s one of the best platforms for lifestyle-driven, discovery-phase marketing. If your product aligns with style, decor, wellness, fashion, or gifting, Pinterest should be your primary growth channel.

Here’s how it works:

• Users browse Pinterest to plan, not just to scroll. That means you’re showing up during high-consideration moments.
• Ad formats include static pins, carousels, and video ads.
• You can target by interests, keywords, demographics, and even life events (weddings, holidays, home renovations, etc.).

Amazon Ads

If you’re selling on Amazon (or plan to), don’t overlook its native ad platform. Amazon Ads lets you reach shoppers inside the marketplace, often while they’re comparing products or already looking to buy.

Formats include:

• Sponsored Products – Your listing appears in search results or competitor pages.
• Sponsored Brands – Feature your logo, a custom headline, and multiple products.
• Amazon Video Ads – Short, autoplay videos shown directly in search results.

Klaviyo and email-ad sync integrations

This one’s not a platform per se, but it’s a powerful tool if you’re using Klaviyo for email marketing. Through integrations with Meta and Google, Klaviyo lets you sync your email lists directly with your ad platforms. So you can target:

• Cart abandoners who didn’t open your email
• VIP customers with upsell ads
• New subscribers who haven’t purchased yet

XHS or RedNote Ads

Xiaohongshu — also known as RedNote or Little Red Book — has become a powerhouse for lifestyle-driven ecommerce discovery in China. For brands targeting Gen Z, young millennials, or cross-border shoppers, XHS or RedNote Ads offer a unique window into community-first commerce.

Key ad types include:

• Search Ads – Show up when users search for keywords like “acne patch” or “travel outfits,” making them ideal for high-intent, niche shoppers.
• Feed Ads (信息流广告) – Appear natively in users’ discovery feed, often styled as influencer-style posts with product placements.
• TopView / Banner Ads – Premium placements that give massive exposure, usually for larger brand campaigns or product launches.

How to choose the right ecommerce advertising platform

Ecommerce advertising strategies for startups

Running ads is easy. Running ads that work? That requires strategy.

A lot of startups make the mistake of jumping into paid media without a real plan. They launch a few campaigns, boost a couple of posts, and hope the conversions roll in. But without the right structure — one built around testing, funnel logic, and creative direction — it’s like driving a car with no GPS. You burn fuel and get nowhere fast.

So let’s get into the details of the ecommerce advertising strategies that help you grow efficiently without blowing your budget:

Start with one funnel

When you're in the early stages, it's tempting to try everything at once. But more campaigns don't mean more results, especially if you're working with a lean budget.

Instead, build a single full-funnel flow and optimize the handoff between each stage:

• Top of funnel (TOFU) – Build awareness with cold audiences. Focus on thumb-stopping creatives, UGC videos, or founder-led storytelling. You’re not selling — you’re introducing.
• Middle of funnel (MOFU) – Retarget visitors who viewed products, engaged with content, or clicked through your emails. These users are interested but not convinced yet. Use testimonials, reviews, or product demos.
• Bottom of funnel (BOFU) – Cart abandoners, product page viewers, and past customers. Push urgency, limited-time offers, or bundle discounts to close the deal.

This structure makes sure that you’re not just filling the funnel but that you’re moving people through it.

Segment your audience

… because your growth depends on it! Quirks apart, generic ads don’t convert. That’s where audience segmentation comes in, giving you the power to tailor your messaging to specific behaviors, demographics, or buying signals.

Here’s how to approach it:

• Interest-based targeting – Meta and TikTok let you reach users based on hobbies, preferences, and lifestyle.
• Lookalike audiences – Use your best customers as a blueprint. Meta and Google will find similar people with higher conversion potential.
• Email and purchase sync – Platforms like Klaviyo can sync your email lists into Facebook and Google, so you can show ads to:
  • New subscribers
  • High-LTV customers
  • Lapsed buyers

This helps you talk to different customers differently without having to reinvent the wheel each time.

Invest in creative that does the selling for you

It’s easy to obsess over targeting, but the real lever in ecommerce ads? Creative.

A great ad does four jobs:

1. Stops the scroll
2. Communicates your product’s value instantly
3. Connects emotionally or visually
4. Gets the click

Some formats that consistently perform:

• UGC-style videos – Think customer testimonials, unboxings, “day in the life” content
• Founder story videos – A direct message from the person behind the brand builds instant trust
• Carousels and lifestyle shots – Showcase how your product fits into someone’s real life
• Product demos or before/afters – Perfect for beauty, wellness, fitness, or home

If you're testing platforms but not testing creative, you're leaving conversions on the table. Rotate new creatives every 2–4 weeks to avoid ad fatigue.

Pair paid ads with owned channels

Here’s where many startups miss out: they treat paid ads and owned channels like separate systems. But the truth is, your ads are stronger when paired with email, SMS, and organic content.

Here’s how to bridge the gap:

• Sync Klaviyo with Meta to retarget email non-openers or upsell recent buyers
• Use your best-performing UGC ads as Instagram posts or email headers
• Create email flows that mirror your funnel: awareness, product education, conversion
• Tag new customers from paid campaigns and nurture them with post-purchase sequences

This integration improves your conversion rates, LTV, and return on ad spend — all without spending more on traffic.

Test before you scale

Scaling doesn’t start with a big budget. It starts with clarity on what works. That’s why you need to treat every ad campaign like an experiment at first.

Here are some ways to test small but get faster results:

• A/B test creative formats (images vs. video, UGC vs. polished)
• Try different hooks or CTAs
• Compare audiences: interest-based vs. lookalike vs. custom
• Adjust placements: Instagram Stories vs. Reels vs. Facebook Feed

Use tools like:

• Meta Ads Manager experiments
• Google’s Responsive Ad testing
• Klaviyo’s campaign performance data

Don’t scale based on feelings or instincts; rather, scale based on data. Once you know your winning combinations, you can increase your budget with confidence while knowing your CPA won’t spiral out of control.

Build in automation without losing control

Once you’ve tested and refined your funnel, start using platform tools to save time and smooth out performance.

Useful automations include:

• Rules in Meta Ads (e.g., pause if CPA exceeds $30)
• Google Performance Max campaigns for broader reach
• Auto-budget allocation based on ROAS performance
• Klaviyo flows that respond to user behavior in real time

These automations are like multipliers of your already existing framework. They keep things running smoothly while you focus on creative and high-level optimization.

Ecommerce marketing services: when to hire an agency

There comes a point in every founder’s journey when you start asking: Should I keep running ads myself… or hand this off to someone else?

When you’re already juggling product development, fulfillment, customer support, and the occasional late-night bug fix, the idea of handing over your ecommerce advertising to a professional team might feel tempting. While it can be a smart move, it’s not always the right time.

Here’s how to decide whether to keep things in-house or bring in a marketing partner — and what you should expect if you do hire help.

What ecommerce marketing services actually offer

Not all agencies are created equal, and what you get depends on whom you hire. But most ecommerce ad agencies offer some version of the following services:

• Paid media management

  Strategy, setup, and optimization of your ad campaigns across Google, Meta, TikTok, Pinterest, and more. This includes everything from building audience segments to managing budgets and scaling winners.

• Creative production or direction

  Either they make your ad content (video, static, UGC-style) in-house, or they’ll manage a network of creators and freelancers to deliver assets that convert.

• Conversion Rate Optimization (CRO) and landing page consulting

  Ads don’t work in a vacuum. Some agencies go beyond traffic and help you optimize the user experience on-site — improving conversion rate, AOV, and even upsells.

• Analytics and reporting

  Weekly or monthly performance dashboards with insights on CAC, ROAS, AOV, CVR, CTR, and spend breakdowns — so you actually understand where your money is going.

• Full-funnel strategy

  From cold prospecting to retargeting to retention, they’ll help you build an ecosystem — not just run isolated campaigns.

If you’re working with a white-glove agency or a boutique that specializes in DTC or ecommerce, you’ll often get strategic input on your growth roadmap as well.

Ecommerce marketing agencies vs. in-house marketing teams

When it comes to ecommerce advertising, there’s no one-size-fits-all setup. Some startups prefer to keep things lean and hands-on by managing ads in-house. Others hit a point where outside support becomes necessary to scale without burning out or hitting performance plateaus.

Here’s a breakdown of the key pros and cons of each path — so you can make the right decision based on your team, budget, and growth stage.

In short:

• In-house gives you control, flexibility, and firsthand learning, but it comes with the cost of time, expertise, and creative limitations.
• Hiring an agency brings speed, experience, and scale, but only if you find the right partner and are ready to invest.

Many brands start in-house, then shift to an agency once they’ve validated product-market fit and have the budget to grow faster. Again many brands, who don’t have the budget to build a marketing team, start with an affordable marketing agency first. If you’re starting to feel stretched thin, unsure how to optimize further, or don’t have the budget to hire, that’s usually a sign it’s time to delegate and scale smarter.

Signs it’s time to bring in an ecommerce marketing agency

Hiring an agency can not only save time but also accelerate results. If any of the following feel familiar, it might be time to consider outside support:

• Your ROAS is plateauing or declining, and you’re not sure why.
• You’ve hit a ceiling with what you can do on your own — and creative fatigue is setting in.
• You don’t have the time or skillset to manage cross-platform campaigns effectively.
• You’re spending more than $3–5K/month on ads and need real strategy behind it.
• Your growth is too inconsistent to forecast or plan inventory confidently.

In these situations, an experienced team can help you break through the noise, scale what’s working, and cut what’s not while keeping your costs in check.

When not to hire an agency (yet)

Some startups jump into agency partnerships too early — before they’re truly ready to make the most of the investment.

Hold off if:

• You haven’t validated your product-market fit
• Your AOV is too low to run ads at scale profitably.
• You’re only spending $1K–$2K/month on ads, in which case you’ll likely outlearn the agency
• You haven’t tested yourself enough to know what good looks like

In these early stages, consider a consultant, fractional performance marketer, or even a project-based freelancer to build a lean foundation before you scale.

How to pick the right ecommerce marketing partner

If and when you do decide to hire, vet potential partners carefully. Some questions to ask:

• Do they specialize in ecommerce (and ideally, in your category)?
• Can they show real performance data (ROAS, CAC, scaling case studies)?
• Will you get a dedicated strategist or be handed off to a junior team?
• What’s included in their scope — just ads, or also creative, landing pages, and CRO?
• How do they report performance, and what tools do they use?
• Can they work within your platform stack (e.g., Shopify, Klaviyo, GA4)?

Don’t just go with the flashiest case studies or the lowest price. Go with the team that asks you the right questions, is keen on knowing your goals and objectives, understands your unit economics, and shows up like a partner from day one.

Ecommerce KPIs to track and measure

Paid advertising is only powerful if you’re measuring the right things. That means moving beyond surface-level stats like impressions or clicks and focusing on the KPIs that actually affect your revenue, profitability, and long-term growth.

Whether you’re running ads in-house or with a partner, these are the ecommerce KPIs you need to track:

Tracking ecommerce KPIs helps you make smarter decisions with your ad budget. The right KPIs give you clarity on what’s working, confidence to scale what converts, and early warning signs when performance dips.

Ecommerce ad budget benchmarks and ROAS expectations for 2025

Whether you’re a founder or working with an ecommerce agency, one of the first questions that always comes up when you're running ecommerce ads is:

“How much should we be spending?”

“What’s a good ROAS to aim for?”

The truth is, there’s no universal answer. But there are clear benchmarks, patterns, and ratios that successful ecommerce brands use to make confident, profitable decisions.

This section will break it all down.

What percentage of revenue should go to ecommerce advertising?

A useful benchmark is 10%–15% of top-line revenue typically goes into paid ads for a stable, growth-oriented ecommerce brand.

Here’s how that flexes by stage:

If you're VC-backed or product-led, you might run higher budgets for speed. But if you're bootstrapped, your focus should be sustainable CAC:MER (Marketing Efficiency Ratio), not just top-line spikes.

What’s a “good” ROAS for ecommerce ads in 2025?

That’s the golden question.

Here’s the honest answer: It depends on your product type, margin structure, AOV, and return window.

But here are directional benchmarks we use internally and see across Kaya clients:

How to forecast your ecommerce ad budget like a pro

If you want to move beyond guesswork, here's a simple bottom-up framework you can use to model spend:

1. Set your revenue target

   Example: $100K/month

2. Know your margin

   If your gross margin is 65%, you have $65K to work with.

3. Decide on acceptable CAC

   If your AOV is $70 and you're okay spending $25–$30 to acquire a customer, set CAC target = $27.50

4. Model from CAC + conversion rate

   If your site CVR is 2%, you need 5,000 clicks to get 100 conversions

   → At $1 CPC, that’s $5K ad spend

   → If you get $7K revenue from those 100 customers → 1.4x campaign ROAS, but 30% reorder in 30 days → LTV-adjusted ROAS = 2.1x

5. Adjust monthly based on:

   • Seasonality (holidays, promo periods)
   • New product launches
   • Retention campaigns (email/SMS supplementing ROAS)

Metrics your ecommerce agency should help you budget around

If you're working with an agency or ecommerce marketing consultant, don’t just let them send you channel-level ROAS reports. They should be helping you track:

• CAC by funnel stage (cold vs. warm vs. retargeting)
• LTV:CAC ratio by audience cohort
• Landing page CVR by traffic source
• Payback period on ad spend (how long until you recoup CAC)
• Blended MER across paid + owned channels

This kind of financial clarity lets you confidently scale ad spend without gambling. And it’s what separates a good growth partner from a media buyer pressing buttons.

Common mistakes startups make with ecommerce advertising

Even with the best tools and targeting, ecommerce ads can underperform if the foundation isn’t solid. Most mistakes aren’t because founders don’t care but because they haven’t been shown what to look for.

Here are the most common pitfalls we see (and how to avoid them before they cost you time, budget, or momentum):

Relying on one ad platform

If all your budget lives on one channel, e.g., Meta, you’re one algorithm tweak or CPM spike away from trouble. Platforms fluctuate. Diversification gives you breathing room.

What to do instead:

Start with one platform to learn, then layer in others (e.g., Google, TikTok, Pinterest) once your funnel and CAC are stable.

Ignoring creative fatigue

That video that crushed last month? It's probably already stale. Audiences get tired fast, especially on scroll-heavy platforms like Instagram and TikTok.

What to do instead:

Refresh creatives every 2–4 weeks. Rotate UGC, founder videos, lifestyle shots, and testimonials, and log what performs best for each funnel stage.

Skipping landing page optimization

You can have the best ad in the world, but if your landing page doesn’t convert, you’re just lighting money on fire.

What to do instead:

Make sure your landing page matches the ad message, loads fast, is mobile-optimized, and has a clear path to purchase.

Not setting clear KPIs

If you're only tracking impressions or click volume, you're missing the full picture. Metrics like ROAS, CAC, CVR, AOV, and LTV are what actually determine whether your ads are profitable.

What to do instead:

Set clear KPI targets before launching campaigns and review them weekly to spot trends, not just snapshots.

Scaling too early

Just because a campaign shows a few good days of ROAS doesn’t mean it’s ready to scale. Premature scaling is one of the fastest ways to ruin a working ad set.

What to do instead:

Wait until your results are stable over at least 7–10 days, then scale gradually, such as increasing budgets by 15–20% at a time.

Underinvesting in creative

Performance ads are only as strong as the creative behind them. If you’re reusing old content, using stock photos, or winging it with your phone, you’ll hit a wall fast.

What to do instead:

Build a consistent creative pipeline. Use UGC, influencer collaborations, and lightweight video edits to keep things fresh without breaking the bank.

Expecting ads to do all the work

Paid ads get the traffic. But if your product doesn’t solve a real problem, your offer isn’t clear, or your post-purchase experience is clunky, no amount of ad spend can fix that.

What to do instead:

Make sure your store is ready to convert. Product-market fit, reviews, social proof, and retention flows all matter just as much as the click itself.

If your product is good, your funnel is tight, and your messaging is clear, paid ads will amplify it. If any of those are weak, ads will only expose the cracks faster.

The good news? You now know how to build it the right way.

You’re up to speed

Ecommerce advertising is one of the fastest ways to grow, BUT only when it's done right. From choosing the right platforms to testing creatives, tracking KPIs, and optimizing your funnel, there are a lot of moving parts to get right.

For early-stage startups, doing it all in-house or with a freelancer might work for a while. But as you scale, managing paid ads effectively becomes a full-time job — one that demands specialized knowledge, creative consistency, and platform fluency.

If you're starting to feel that pull, it might be time to delegate. The right ecommerce marketing agency won’t just manage your ads but become a partner in growth. They will help you scale smarter, faster, and with far less guesswork.