Facebook Ads: How Much Should You Spend?
- Advertising
- 4 minute read
Just because you have a business does not entitle you to sales.
If your goal is to get sales, leads, sign-ups, etc from Facebook advertising—real results—then you also need to have the patience to test numerous variations of creatives, audiences, ad copies, and landing pages. More testing means more spending. Which means a bigger ad budget helps.
Therefore, larger clients can afford to “lose” thousands of dollars to test. You can’t.
So the real answer? It depends. We know it’s not the answer you want to hear, but this is the reality.
Every business is different
An everyday consumer products brand might have a smaller ad spend compared to a real estate development company. Why? Because it’s much easier to sell a $20 razor than a $20 million construction project. Said another way, there is a direct correlation between ad spend and difficulty in selling your product or service.
The higher priced your product or service, the more you can expect to spend.
Keep in mind, all businesses are different. You have to understand that Facebook is an amplifier of what’s already working for your business. That means if you’re already driving conversions via SEO, Google Ads, email marketing, or other digital channels, Facebook will increase your efficiency.
A machine-learning, remarketing amplifier
Facebook is an incredible remarketing machine. Yes, like those product ads that follow you around, but smarter if you do it right — we go over retargeting abandoned cart customers here, a strategy that increased our conversions by 8X.
Whatever is already working, you’ll get more—more visibility, leads, subscriptions, phone calls, and more sales.
Most people fail at Facebook ads because they start with an arbitrary monthly budget and just start boosting or running conversion ads to cold audiences. That either gets you a bunch of useless likes (which don’t translate to sales) or yields no conversions.
You're marketing to people who didn't even get a chance to learn about your brand. It's no wonder they won't buy instantly.
Imagine if I told you that I worked out like a madman for 4 hours straight at the gym, then complained I don’t have a six-pack by the end of the day. That’s what you sound like when you run Facebook ads to cold audiences for a month and get mad that you got zero sales. Just because you have a business does not entitle you to sales. Facebook ads demand patience.
So how do you determine a good ad budget to start with?
We recommend $1 for every 100 visitors to your website each month. This is assuming that the traffic to your website is high quality to begin with. The idea is to retarget those people on Facebook to convert.
So if you have 5,000 visitors each month, and 10,000 clicks from your social channels, that’s 15,000 sessions. At $1 per 100 visitors, that’s $150 per month for conversion retargeting.
Now, this budget may sound low depending on the products or services that you’re selling. If you’re selling traction power or industrial products that are typically used by municipalities or transit authorities, you can afford to spend more since one of these power distribution products garners thousands of dollars per unit. On the flip side, if you sell healthy chocolate bars for $10 a pop, $150 per month might be all that you can afford after factoring in production costs, packaging, and shipping costs to ensure you still keep a good margin.
To sum up, there is no single budget that works for all businesses. Sorry if you got this far expecting a simple answer like $20/day for the first three months—but it just doesn’t work that way.
In the same way that doctors don’t prescribe the same medication for all their patients, every ad account should be “prescribed” a different budget, and should be analyzed as such. There are just too many variables across businesses.
If you’d like a consultation to optimize your Facebook ad account, go ahead and send us a message here.