How to Set a Facebook Ad Budget


It’s no secret that the more you spend on Facebook, the more reach you can accomplish. But spending for the sake of spending isn’t effective. Understanding how much is enough to spend in order to accomplish your goals can be hindering.

As more and more companies use Facebook’s advertising tools, it is becoming increasingly competitive. With that being said, the cost of running a Facebook ad is much more cost effective than traditional advertising avenues, such as, print ads or TV commercials. The best part about Facebook is that it's all trackable! And with 2 billion monthly users, chances are, your customers can be reached on Facebook.

To establish a Facebook ad budget:

  1. Establish your end Goals: Decide what it is you want people to do as a result of seeing your ad. Do you want them to sign-up for a newsletter, engage, or click-through to purchase? Then ask, "What is this conversion worth?" Maybe a click-through is worth $1.50 while an email sign-up is worth $3. Establishing these numbers will help guide your target cost-per-engagement or click-through rate, ergo providing perimeters for success.

  2. Develop your Audience: Be very clear who you trying to reach. Identify specific interests which align with your brand and audience's lifestlye. Another great tool within Facebook is to create lookalike audiences from those already on your email list to attract like-minded purchasers.

  3. Test your Creative: Run A/B testing of images and copy to see which ad most resonates with your audience. As specific ads gain traction, continue to invest in the creative that has a lower cost per conversion.

The best way to establish your Facebook ad budget, is starting with your end result in mind. Overall budgets may fluctuate from season to season, especially in hospitality and retail. For example, as the holiday shopping season approaches, be prepared to increase your budget as competition for placement will be higher.

When it comes to Facebook ads, to have the biggest impact, testing and trying new creative and audiences is an ongoing process. We’ve worked with clients who have spent $100 a month and seen great results, while other companies have spent $20,000+ a month with great results too. The same challenges are present for both size companies, it really comes down to knowing your audience and establishing clear objectives.

Seeking assistance in creating your Facebook ad campaigns? Learn more about 1-hour Social Session.