What Should My Daily Budget for Facebook Ads Be?
What's a Good Daily Budget?
One of the most common questions I hear as a Facebook ads strategist, is “how much does it cost to run a Facebook ad campaign?”
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If you've found yourself overwhelmed or just plain confused by Facebook advertising's ins and outs, especially when it comes to how to set budgets, make sure you're comfy and keep reading.
Coming up with the right budget isn't an exact science because Facebook ad costs can be all over the place, but I will go over the basics so you'll at least know if paid ads are in your marketing budget.
If you've never run ads before you won't know most of the variables to plug into a Facebook ad budget calculator (insert opt in for calculator) so your first campaign will be all about testing out a few ads to gather data.
To be successful in your paid marketing efforts, it's important to know what your average cost for outbound clicks if you're looking for traffic to a website or blog, or the average amount for a lead if you're looking for opt-ins.
My advice for first time ads
The first time running ads is going to give you a data filled story. You can walk away with the knowledge to edit, rewrite, or publish “as is” next month.
I suggest you spend as much as your budget allows. You can spend as little as $5 a day depending on the type of ad, but the more you spend the faster you'll have your data.
I know this could feel like a waste of money, but the reality is once you have the metrics, setting up your total budget will be easier to estimate. So approach your budget the first time with a mindset of “I'm spending money on research” rather than “woo hoo take my money Facebook and make me rich!” (which is often the perception people have)
You can always set your Facebook ads budget the first time with a smaller amount, and increase once you find a campaign that works for your goals. However, you'll want to make sure you have enough money in the budget for the ads to be seen by enough potential customers to gather enough of that golden data.
Best Practices for Setting Your Budget
Know Your Goals
All Facebook ads campaigns need to start with a goal. Are you aiming for brand awareness or trying to drive sales? This is a key factor in working out your advertising budget because getting someone to make a purchase from your ad is more expensive than paying for them to just see it.
Know your ideal client
Recognize and understand your target audience. One of the biggest benefits of Meta advertising is the ability to send your ads to the right people without spending your money on people who aren't interested.
Know how much you're willing to spend to get a lead
This is important because if you're trying to bring in leads for a $5 product, you might not want to spend $30 to make that happen, but it all depends on your goals and business model. For example, $30 might be fine if after purchasing the $5 product they stay in your world, and you have an entire suite of products or services to offer. But, if you only have the one product for $5 that wouldn't make sense.
Why The Cost of Facebook Ads Fluctuates
Wouldn't it be incredible if you could call Facebook and ask “how much does it cost to place an ad?” The reality is even if you could call Facebook (if you know how please tell me!) they would say “We have an auction based format so it depends”
I'll break down some of the main reasons ad prices are all over the place, which makes it a scary venture if you're just jumping in and don't know what to expect.
Campaign Objective
There's sort of a hierarchy of costs for different objectives. (insert objective menu) starting with brand awareness and moving all the way to the top to Sales.
When you first go into Facebook ads manager to create a new campaign, you will need to choose an objective.
Your Niche or Industry
Different niches will cost more than others. For example, financial professionals will pay more than a yoga studio. Tech industries have high ad costs compared to someone selling T-shirts. As I mentioned before, businesses that pay more to advertise on Facebook, are usually happy to do so, because in the long run their client lifetime value is so high.
Different Audiences
Ads that are sent out at the top of your funnel or cold audiences, will typically be more expensive than ads that are targeted to a custom audience- meaning, they're already familiar with your brand or business and are more likely to take action. Because people are more likely to take action, Facebook recognizes your campaign relevancy to your audience, and rewards you with lower costs.
Your overall budget will also depend on if you need to test out different audiences. If you're trying out a lot of new audiences to see who is interested, you'll want to allocate more of your budget to get people aware of your business or brand. The more audiences you need to test, the higher your budget needs to be. For example, let's say you're not sure if your new product will resonate more with people in the US or other countries, you'll want to have ads running to to both, each with their own budget.
Seasonal
Time of year is a factore when planning out your Facebook ads budget. It only makes sense that if you're advertising on Black Friday, your ads will cost more than other times of the year. And, this could be industry specific as well. Summers are typically more budget friendly because a lot of big advertisers quiet down during that time.
Election
This one is interesting because a lot of people wouldn't think this would matter, but the competition is fierce for the ad space, so the more competition there is, the more it will the cost.
Your Offer
If you're trying to sell a product or course that is $2000, you'll need to have a much higher budget than a course that is $100, because it's going to take a lot more “warming up” for someone to spend 4 figures, than 3.
I mentioned relevancy earlier and Facebook measures the quality of your ads by if they think it's relevant to your audience. So, if no one is clicking on your ad, it could mean people aren't interested, which is why I always ask clients before we start working together if they have a proven offer. I'm not asking to be judgey, but to know if there's a market for it, before spending money on advertising.
If you have a limited budget, test your product or service organically first.
Landing Page
When I first started out as an ads manager I didn't realize how landing pages can effect a successful campaign. I quickly learned that it doesn't matter what the total amount you spend on your ads is, if your landing page doesn't convert- you will blow through your budget without much success.
It's also necessary for your landing page be aligned with the product you're offering. No bait and switching, and this one's big: don't forget to make sure it's optimized for mobile devices!
More Factors
There are more variables that go into budget, but understanding these few factors can hopefully at least clear up the “how much do ads cost?” confusion.
Some people think advertising on Facebook is all they need to have a successful business, and the reality is ads will enhance whatever is already happening, but won't fix a non-converting landing page, or an offer people aren't interested in.
“Well Stacy that's all fine and dandy, but how do I know how much to spend?”
My answer is still “it depends, but as much as you can in the beginning for testing”
You can read what Facebook has to say about budgeting
How to Craft the Perfect Monthly Budget
When someone with a small budget wants to work with me for the first time, I always suggest a minimum of $500 to start per month.
Depending on their goals, niche, product, and audiences, the strategy will vary.
For the sake of making it simple; let's say you have $500 a month to spend on ads. Divide that up by 30 days and you'll get about $16.60 a day to spend. If after 10 days or $160 nothing seems to work, it's time to have a look into the data and see what's happening.
The beginning stages of your ads are all about testing and finding out what is resonating with your audience, so you can end up doing more of what's working and less of everything else.
Make sure to use the daily ad set budget option and not the advantage + so you have control of your overall budget.
You don't want to leave it up to Facebook.
Analyze and Learn
Spending money to test is not a bad thing. Remember when I talked about getting okay with spending money to gather data. It's important that you understand what to look for, in order to learn how to tweak your next campaigns.
Your reports are a goldmine of information. Look at which ones gave you the best results for the least amount of money. By understanding what worked and what didn't, you can refine your approach, and start scaling once you have a winning combination.
Frequently Asked Questions
How often should I revisit and adjust my budget?
As you get started it's tempting to be in ads manager all the time, but try to resist making any changes at all for the 1st 7 days. It takes your ads on Facebook 7 days to optimize fully. After that have a look and see if you need to change anything. This frequency allows you to adjust swiftly to what's working.
Is there a minimum budget recommended for Facebook Ads?
Facebook does set a minimum daily budget, usually around $1, depending on your chosen ad format and audience. However, to make a real impact, consider your objectives and audience size to set a more realistic budget, and try and have at least $500 per month to ensure you get good results, although you could achieve brand awareness for less.
How do seasonal trends impact budgeting?
Seasonal trends can lead to more advertisers vying for space, driving up costs. Conversely, off-peak times might offer better rates. By understanding these fluctuations, you can get the most from your budget.
What's the difference between daily and lifetime budgets?
A daily budget sets a cap on what you'll spend per day, giving you predictability. A lifetime budget, on the other hand, is spread across the duration of the ad campaign, offering flexibility on high and low spend days. If you're new to advertising and don't fully understand the difference, DO NOT use lifetime budget.
How can small businesses optimize their budget for better results?
Focusing on a specific target, using retargeting techniques, and leaning into Facebook's own optimization tools can help small businesses make every penny count. Learning the ins and outs of ads manager can be extremely helpful. If you're not confident to run ads yourself, consider hiring a professional ads manager or strategist
Easy Peasy, Right?
There we have it – a glance into the world of Facebook advertising budgets. With the right knowledge and a sprinkle of patience, you can make your budget work for your brand.
Remember, advertising is a lot of testing and patience, but can be game changing for your business if done well.
If you're wondering what went well, or ways to improve your last campaign, I offer audits which include strategies you can use for next time.
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