Almost everyone that comes to me for Facebook advertising support has run some sort of campaign themselves.
More often than not, they’ve not seen the results they’d hoped for. They’ve boosted a few posts, or thrown a few hundred pounds towards ads… but crickets. No results and certainly no profit.
It raises the question: How much should you spend on Facebook ads?
This is a great question. It can be a little overwhelming knowing where to start. Do you need to spend pennies, pounds, thousands to make Facebook ads work?!
One of the great things about Facebook advertising is it doesn’t matter what your budget is, you can still make it work. You can spend as little as £1 per day and you can scale that spend to whatever you like.
If you’re wondering how much money you should spend on Facebook ads, here’s what you need to look at…
What is your advertising budget?
Does your business have an overall budget for advertising? Is there a maximum you can spend?
This is always the first question we ask prospective clients. A Facebook ad strategy where the monthly budget is £20,000 is vastly different to one that’s only £2,000. If you’ve got an overall marketing budget, I would suggest allocating a percentage of that to Facebook ads.
Whenever we work with brands, we look to determine their budget instantly, but we always suggest having a flexible budget. A good Facebook ad campaign should see profit and if your campaign is profitable, do you really want to limit the amount you spend?
Of course not!
Let’s say you have a Facebook ad budget of £2,000/pm and from that, you’re generating £5,000 in sales. You don’t want to limit your spend to just £2,000. If you were to increase your budget to £4,000, you’d generate £10,000 in sales.
It’s good to have a budget, but be willing flex a little if your campaigns are profitable.
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The next thing to do is…
What does your conversion rate look like?
As a marketer, you should have a rough idea on the number of leads/enquiries/website visits you need in order to convert someone into a customer.
Your advertising should be a numbers game.
- What’s the lifetime value of a customer (LTV)?
- How much can you spend to acquire a customer?
- How much can you spend to acquire a lead?
- How many leads do you need to make a sale, on average?
Once you know these numbers, you’re able to spend money on Facebook and know whether or not you’re profitable. If you’re not profitable, you can start looking at why.
Are you generating enough leads? Are you converting enough sales?
For example, if you know for every 100 people that sign up for your webinar you make 5 sales, and that 5 customers bring in £500 revenue each, you know you need to that in order to run a profitable Facebook campaign, you need to spend less than £2500 to get 100 people to sign up to your webinar.
If you have data like this to hand, you can easily take your goals and conversion rates and figure out how much you have to spend to make your return on investment.
Despite all this, there’s one thing I recommend doing…
Start small before scaling
One rule of thumb when deciding how much to spend on Facebook ads, is starting smaller than you hope to.
Every successful Facebook advertising campaign requires a lot of testing and optimisation before it really starts to work and it’s a better bet to do that with a smaller budget.
If you start a campaign off with too high a budget, Facebook will swell to that budget and you’ll end up paying more for your clicks and conversions.
Start with a small testing budget, and when you reach a conversion cost that works for you, start scaling the spend up. By that point, it should effectively be like a tap. You can increase the spend when you want more leads and you can reduce it when you can’t take anyone else on.
I hope this guide has helped you decide how much money to spend on your Facebook ads. At the end of the day, Facebook advertising can be a hugely profitable platform for any business of any shape, size or budget. You just need the right strategy and funnel.
The most important thing to do/have is your tracking in place. If you can accurately track the performance of your ads, you will know whether you’re spending too much or too little.