Do you need help to figure out the right amount of money to spend on Facebook Ads? It doesn’t have to be a daunting task as long as you know where to start. For instance, new businesses that are just starting out with social media advertising should set a budget of less than $20 daily for their ads.
In this article, we provide insights into how much you should invest in your Facebook Ads and tips on optimizing your ad campaigns. So if you want invaluable advice on allocating funds for your marketing initiatives, then read on!
Factors to Consider When Setting a Facebook Ads Budget
There are four levels to consider when establishing a budget for your Facebook Ads – from spending the minimum amount, leveraging Facebook’s algorithm and optimizing cost-per-purchase to achieve higher purchase results.
Level 1: Spend the absolute minimum on Facebook ads
Many businesses, especially small ones with limited budgets, may opt to spend the absolute minimum on Facebook ads. To do this, you should have a budget of $20 per day, which is the suggested minimum amount that can generate tangible results.
With such low spending limits, you get the chance to test out different ad campaigns and strategies to figure out what works best for your business. Additionally, it gives your brand more exposure as there are no financial risks if the ads do not perform well, and it allows for a manageable flow of funds without breaking the bank.
Even better when done correctly is that exposing people multiple times within this cost range can create lasting recognition and familiarity with audiences who would potentially be interested in what is being advertised while also giving businesses an idea about how much they need to scale up their budget in order to achieve desired goals down the line.
Level 2: Spend more to leverage Facebook’s algorithm
Spending more on Facebook ads can help leverage the algorithm to improve campaign performance. This means that when you bid more for your campaign, it’s more likely that your ad will be seen by a larger audience and get better results.
The price of an ad is determined through an auction system based on factors like quality scores and estimated performance, so bidding higher gives you added chance to win the auction over other advertisers who are competing with lower bids.
Also, investing in higher-cost campaigns allows you to extend your reach by leveraging target audiences outside your current customers, which may bring new leads and potential customers.
Level 3: Spend enough on Facebook ads to achieve 50 purchases per week
Spending enough money on Facebook ads to hit the 50 purchases per week mark is incredibly important. This allows advertisers to reach a minimum number of purchases required by Facebook to exit the “learning phase,” which means that data from those first 50 or so purchases can be used for ad optimization – creating campaigns that will more accurately target your desired audience while ultimately spending less money in the long run.
By achieving this, marketers are able to ensure they get the most bang for their buck and can better utilize any budgeting available. Reaching this milestone is key when it comes to optimizing your efforts and ensuring you don’t waste time or resources running FB ads with no real direction!
Level 4: Optimize to achieve a lower cost-per-purchase
To maximize the return from your Facebook ad campaigns, you need to optimize them. Optimizing involves testing different ad variations and targeting specific audiences so that you can get more value for your money.
It’s important to monitor how well each ad is performing so that you know if changes are needed in order to reach higher returns on investment.
One way of optimizing is by using a cost-per-message or cost-per-thousand-reach model with smaller budget ranges, as this will help make sure that only a little money is spent unnecessarily during trials and tests.
Strategies to Optimize Facebook Ad Spend
Stay ahead of the competition with effective ways to reduce ad spend while improving performance.
How to optimize Facebook ad spending with Revealbot
Revealbot is an amazing tool for optimizing your Facebook ad spend. It provides you with tips and strategies that can free up time as well as help you get the most out of your ads.
Using Revealbot, you can easily set up automation so that your campaigns will run on autopilot, ensuring that they are always performing optimally. Additionally, Revealbot’s data analysis capabilities allow you to refine and adjust your budget in order to maximize results.
You’ll be able to identify high-performing audiences and target them specifically or reduce budgets on those resulting in poorer performance. The average cost per click across all campaigns is $1.01, according to their data—so using Revealbot could mean more bang for less buck! Another great feature of Revealbot is its integration with Facebook Pixel, which allows tracking conversion rates in order to hone your targeting even further, enabling you to create unique custom audiences based on visitors’ behaviour online who have already expressed interest in purchasing from you before – a powerful optimization opportunity!
Reduce wasted ad spend.
Facebook Ads are a great way for small businesses to reach their target audience, but ad spend can add up quickly. Fortunately, there are several ways to reduce avoidable wasted ad spend on Facebook and ensure that your budget gets the maximum ROI.
Targeting a more specific audience can help lower costs; you’re better off narrowing down your criteria when targeting social media users so that only those interested in what you offer will see it.
Using bid caps is another effective strategy – this caps how much money you’ll be willing to pay per action (e.g., website click) or impression (someone seeing an ad). Looking for audience overlap is also beneficial; if some of the same people show up in multiple categories, chances are that they’ve already seen your ad and thus reducing the wastefulness of having them repeatedly exposed to it.
Finally, productivity-wise, tracking and monitoring all campaigns is key – use tools like Google Analytics, adjustable notifications, as well as A/B testing, where you test different versions of an ad post against one another by using split audiences to help measure effectiveness so wasteful spending can be minimized or eliminated altogether.
Increase budgets on high-performing ad sets.
Increasing your budget on ads that are performing well can help optimize your ad spend on Facebook. By allocating more of the campaign budget to those higher-performing ad sets, you’ll improve the overall performance of your campaigns and potentially increase sales as a result.
This strategy helps capitalize on ads that already have an engaged audience and could prove beneficial for small businesses who wish to maximize their marketing efforts without spending too much money.
It is important to monitor these high-performers closely so you always know how they are doing in terms of engagement rate, traffic numbers, cost per click (CPCs), and return on investment (ROI).
Recommended Budgets for Small Businesses
Small businesses should begin their ad campaigns by allocating a budget of less than $20 daily and then adjusting according to the results of their ads.
Start with a less than $20 daily budget.
It is a recommended strategy for small businesses when running Facebook ads, as it gives them the opportunity to experiment and optimize their advertising without breaking the bank. This budget range makes it possible to test out different ad sets, target niches of potential customers, get familiar with analytics tools etc. For instance, spending $20 on 15 different ad sets per day can total up to 1000$ in 7 days, which comes with great value compared to larger budgets.
Additionally, smaller campaigns allow advertisers more control over what they spend while also getting enough exposure from the audience due to frequency capping settings available through advanced features like Ads Manager or Reactelbot.
Finally, by opting for a starting daily budget of less than $20, businesses won’t be charged for impressions unless they reach the maximum CPC and CPM bids meaning that those will go unnoticed until significant performance is achieved, offering more flexibility during the optimization stage or brand awareness campaigns.
Allocate between $20 and $200 daily.
For small businesses, allocating between $20 and $200 per day on Facebook Ads is a suitable starting point. With this daily budget range, different levels of results can be expected depending on the objectives you’re trying to achieve and the size of your target audience.
For instance, if you’re trying to reach more people with brand awareness campaigns or boost engagement for posts from your fans, then $20-30 may suffice – any extra ad spend will enable further testing though not necessarily guarantee better performance.
On the other hand, if you are looking to generate sales conversions like purchasing products or clicking on ads, they may require higher spends ($50-60 per day) so that they can effectively compete in bid auctions for more impressions than other advertisers targeting similar audiences or using similar ad creative strategies.
Allocate 6% of revenue or a $5,000 minimum monthly ad spend.
Small businesses should allocate 6% of revenue or a minimum monthly ad spend of $5,000 for their Facebook Ads campaigns. This budget allocation helps small businesses reach their target audience effectively due to the incredible targeting capabilities available on Facebook Ads.
Having a larger budget for ads allows small businesses to test different forms and types of copy and campaigns in order to determine which resonates best with their audience, allowing them to optimize towards higher returns on investments more quickly over time.
Additionally, having an adequate budget can help enable greater growth as it will allow access to features such as Lookalike Audiences, which are better able to find potential customers who look like existing customers where more targeted audiences may have already been tapped out.
B2B businesses may budget at least $1,000 monthly
For B2B companies, it can be necessary to spend a minimum of $1,000 monthly on Facebook Ads. By doing this, you give yourself the opportunity to reach the right target audience – senior decision-makers in your industry.
With a targeted campaign like this, you’ll get more bang for your buck and produce better results compared to just running generic ads before an undefined audience; plus benefit from higher customer engagement as well as more qualified leads that will result in closed sales deals.
Allocate $400-$1,000 a month or 5-10% of profit.
Having a budget for Facebook ads is an important step for any business that wants to succeed in their online advertising campaigns. Small businesses are recommended to allocate between $400-$1,000 a month or 5-10% of their profits towards Facebook ad spending, and this will help them start experimenting within the budget limits as well.
This allows small businesses to evaluate and adjust their ads campaign based on performance while also giving it time to see results in reaching more customers and increasing sales.
Considering that there are various factors impacting the cost of your overall marketing budget, such as targeting options and ad delivery optimization techniques or campaign goals (brand awareness, conversions etc.), setting up a reasonable budget can help make sure those costs don’t get too out of hand.
Start at $1-$3 per day or $50 per day.
Starting small with a budget of $1-$3 per day is one of the most recommended strategies for businesses or individuals new to running Facebook Ads. Not only do these minimal budgets give you time to experiment without much risk, but they also give ad campaigns a chance to build and gain momentum as customer interest increases slowly.
Starting small can also ensure that your ads cherrypick their target audience – meaning a higher reach potential when done correctly. A daily budget of $50 can offer more opportunities for high-reach and greater visibility, though it does come with slightly more costs.
It’s essential to understand, however, that whatever budget set forth should be achievable and affordable for any given business; achieving results without going too far over in costs is possible if the strategy is sound and optimization occurs regularly.
No more than $3-$4 per day to start
When it comes to spending on Facebook ads, starting small is best. Setting a low daily budget of no more than $3-$4 allows for testing the waters while also working within your available resources and safeguarding against overspending.
This allows you to test different approaches on a smaller scale before committing larger chunks of money to an ad that might fail to be successful. It also gives you time to fine-tune the audience targeting options and optimize the copy until you see positive results from each individual ad in order to increase the chance of success for future campaigns.
With this approach, businesses can safely experiment with social media marketing without spending too much upfront or worrying about wasting money on costly ads that won’t drive conversions.
Calculating and Setting Your Facebook Ads Budget
Learn more about different types of Facebook Ads budgets and how to change your budget, along with best practices to determine the ideal budget that fits into your overall marketing plan.
Types of Facebook ads budgets (campaign/ad set, lifetime/daily)
Facebook advertising gives you different types of budgets. These include Campaign Budgets, Ad Set Budgets, Lifetime Budgets and Daily Budgets. Each type of budget allows you to control how much money is spent on your ads in various ways.
Campaign budgets provide the maximum amount for an entire campaign or ad set that can be spent over a designated period of time. For example, if you have a $100 budget for all your awareness campaigns, once the total cost hits $100 dollars, the campaigns will stop running until they are reset or re-budgeted by the advertiser.
Ad-set budgets provide more control over individual sets within a single campaign. This allows advertisers to alter their spending mix amongst those smaller groups while staying within limits provided by the larger overall budget (like overall brand awareness campaigns).
Using the Facebook ads budget calculator
The Facebook Ads budget calculator is a free tool that businesses can use to determine their necessary ad spending to reach their marketing goals. It provides comprehensive benchmarks and is focused specifically on e-commerce. With the calculator, businesses can determine the exact amount of money needed for desired results.
- Start with a less than $20 daily budget if you’re comfortable dipping your toe into Facebook Ads without major commitments
- Allocate between $20 and $200 daily if you want to tap into what many marketers describe as “a riskier but more rewarding strategy.”
- Allocate 6% of revenue or a $5,000 minimum monthly ad spend for well-established B2C companies who’s already seen success
- B2B businesses may budget at least $1,000 monthly – Allocate between $400-$1,000 a month should be enough for most smaller businesses
- Start at $1 – $3 per day or an absolute minimum of $50 per day before scaling up
- No more than $3 – $4 per day to start – which should get you enough data to adjust intelligently from there
How to change your Facebook ads budget
Every Facebook ad campaign is different, so there are no one-size-fits-all solutions for setting a budget on the platform. However, by optimizing your campaigns and leveraging the available tools, such as a budget calculator, you can find the most efficient way to set your ad budget and maximize your return on investment. Here’s what to consider when changing your Facebook ads budget:
- Determine Your Current Campaign Performance: You should always start with an assessment of what you have achieved in terms of ROI so far and make sure that the campaign objectives align with the tasks at hand.
- Set Reasonable Goals: Decide how much money you are willing to invest and why, and evaluate what will be necessary to achieve those goals. Try not to “overpromise” too much, or it may be difficult to reach your target in its current form.
- Analyze Your Targeting Audience: Understand who your current target audience is and make sure that key segments from this group are being included in your plans, as they can influence them significantly for better or worse results depending on where each segment falls within the conversion cycle steps (awareness, consideration or purchase).
- Assign Ad Sets Ads Budgets: Speak out loud which type of publishing strategies will be needed for reaching new audiences, and when each one of its important steps has been taken, break down the day-to-day budgets into relevant ad sets in order they will be able to perform independently from each other along their desired goals
- Evaluate Changes In Terms Of Results: After changes have been implemented, monitor carefully campaigns results vs initial ones which will guide further optimization ideas if discrepancies occur so new strategies can be introduced next time round without breaking any previously established structures
Best Practices for Setting a Facebook Ads Budget
Start experimenting within the budget limits, give adequate time for results to show, and adjust as per performance.
Start experimenting within your budget limits.
If you want to get the best results from your Facebook ads, it’s important to start experimenting with different strategies. You should always set a budget based on what you can afford while still getting results.
For example, if running three ads will help generate 50 sales per week, try to keep your ad spend within that amount. This way, you can optimize different campaigns and monitor their performance without going over budget each month.
You may also want to consider testing out different tactics, such as reducing wasted ad spend or increasing budgets on high-performing sets when attempting new strategies – performing experiments in small increments is key for success! Doing this will enable businesses of all sizes to see how far they can push their marketing initiatives without risking too much-lost money.
Give it time to see the results.
It’s important to give Facebook ads time to show results before making any changes, as it can take up to 48 hours for the algorithm to learn and optimize them – otherwise, you could be wasting your money or missing out on potential sales opportunities.
Increasing your budget should be done every five days or so; this gives ads enough time to start gaining traction with potential audiences. However, if the first few campaigns don’t produce the expected results, then it is worth going back in and readjusting settings such as location targeting, age groups and interests until they do work better for you.
Evaluate and adjust based on performance.
It is important to monitor the performance of your Facebook ads and make ongoing adjustments based on what you are seeing. Understanding how your budget impacts performance can help you get the most from your campaigns and optimize for desired results like more sales or audience engagement.
To ensure success with a Facebook ad campaign, analyze metrics such as click-through rates, conversion rates, and return on ad spend regularly. This will help you figure out which elements are doing well so that they can be reinforced while weaker areas can also be identified and improved upon.
For example – if an ad set using one image has had better conversions compared to another ad set using a different image, you may want to increase the budget allocated to this first successful ad set in order to maximize its potential even further.
Start with what you can afford and heed minimum budget recommendations.
When it comes to setting a Facebook Ads budget, it’s important to start with what you can afford and heed the platform’s minimum budget recommendations. Why? When setting an ad budget that falls within your financial capabilities, you are better able to test, experiment, and optimize without risking too much money.
Meanwhile, following the minimum recommended budgets set by the platform allows you to allocate enough funds in order to reach your desired target audience and achieve meaningful results effectively.
For instance, most advertisers who are charged for impressions should allocate at least $1 per day for their daily budgets, while the suggested starting budget for Facebook ads is $20 per day – running about 15 ad sets over a week or totalling around $1000.
Experiment with scaling your budget
Businesses can increase their sales by experimenting with scaling their Facebook ads budget. To get the most out of a Facebook ad campaign, businesses must first understand that incremental budget increases are key and thus, experimentation is necessary to reach larger audiences and optimize for conversions and purchases.
A great way to do this is audience expansion – creating different targeting parameters to reach more people who will take action on your message or product in meaningful ways. Another approach businesses should consider trying is broad targeting which allows you to run ads as one large campaign instead of several small campaigns with different objectives – allowing for an easier understanding of results from the campaign while potentially reaching more customers than in individual campaigns due to overlapping target audiences across campaigns.
Increasing your Facebook ad budget incrementally also gives your existing customer base time to respond while helping you tap into new potential users looking for what it is your business has to offer, meaning increased opportunities on both sides, ultimately leading towards higher ROI (Return On Investment).
Conclusion
Setting the right budget for your Facebook ads is key to achieving success. Starting with a relatively small budget and experimenting is usually recommended because it allows businesses to test options without making large investments upfront.
Budgeting should be an ongoing process, as businesses need to check in and adjust based on performance and desired outcomes. It’s important to continuously evaluate campaign results so you can properly identify opportunities for improvement and determine whether or not increasing or decreasing budgets makes sense depending on the industry, goals, target audience and campaign objectives.
Ultimately, limiting spending from one’s overall marketing budget may help direct resources towards other forms of digital advertising that have been proven successful within an organization’s brand identity framework.