Today, almost every digital marketing strategy includes social media. Why? Because that’s where the world is. Currently, Facebook has an advertising audience of 2.14 billion. The average Facebook user clicks on 12 ads per month (not including ads that don’t need to be clicked). And by the end of 2021, social media ad spending is projected to reach over $110 million.
Not to mention, Facebook owns Instagram. That means that your Facebook ads budget can also be allocated to Instagram ads with a few simple clicks. Since 81% of people use Instagram to research products and services, advertising there is a smart move.
For most business owners and people in marketing, Facebook and Instagram ads feel like a no-brainer. The only problem? They have no idea where to start. Audience targeting, budget strategy, and content creation can feel overwhelming, especially if your budget is small to begin with.
That’s why we rounded up our top 10 foolproof strategies that anyone (seriously, anyone) can use to build a solid Facebook ads budget.
1. Be realistic with your budget
There’s no secret formula for successful Facebook and Instagram ads. It all comes down to what is realistic for you and your business.
That said, there are best practices to take into account. For most brands, it’s recommended to start off with a budget of $50 to $150 per day. This range lets you make an impact while gathering data and testing out creative assets, marketing angles, audience targeting, and more.
If $50 to $150 is a stretch for you, don’t sweat it! You don’t need to rush your marketing strategy if the funds aren’t there yet. Take your time, review your balance sheet, and decide what digital marketing budget makes sense compared to the revenue you’re bringing in.
2. Consider factors specific to your business
Every company’s marketing budget is different depending on who they are, what they’re selling, and who they’re selling to. Here are the main factors to consider when building your Facebook ads budget:
- Campaign objective
- Business type (e-commerce, service-based, etc.)
- How your competitors are advertising
- Target demographic
- The value of your product
- Sales and revenues
3. Start with what you’ve got
Everyone has to start somewhere! Whether you’re a one-person show or a small team with a low budget, you can still dip your toes in the Facebook ad waters.
Start with a small daily budget and slowly increase it as you start to see results. This will also give you an opportunity to collect important data, like targeting and click-through rates. In fact, you can even run Facebook ads with just $1 a day. Which leads us to our next point.
4. Try the $1 per day experiment
If you’ve never run Facebook ads before and you want to test out the platform for the first time, this experiment is for you.
Here’s how it works. Launch a campaign with an experimental budget of $1 per day. This will allow you to experience the process of setting up and publishing a Facebook or Instagram ad for the first time.
But most of all, it will help you test out different audiences, generate awareness, send new eyes to your website, and gather data to put towards future campaigns. When you do have more budget to spend, you’ll be ready to spend it wisely.
5. Test, learn and adjust your ads
There are countless ways you can spend a digital marketing budget. But if Instagram and Facebook ads are your #1 marketing tactic, your ad spend should reflect that.
Set aside $300 to $600 to run Facebook ads over a period of 15 to 30 days. This will ensure you get the most of your primary marketing tool while testing what creative elements are working best.
Depending on your objective, you’ll also be able to send data to your Facebook pixel, analyze your costs per desired results, and adjust the Facebook ads budget for new campaigns.
6. Use a percentage of your revenue
Got cash coming in? First, keep killin’ it! Next, use that awesome revenue to set your ad budget.
The general rule of thumb for small businesses is to allocate 3% to 10% of your total revenue to social media ads. With a set formula based on your monthly income, you can streamline your Facebook ad spend without getting lost in a strategy spiral.
Plus, this means your Facebook ads budget will always be balanced with your cash flow. From there, you can increase or decrease your paid media depending on your marketing goals for the month.
7. Budget based on your objective
Every Facebook and Instagram ad requires an objective. In other words, what is your goal for this particular ad?
If you’re an e-commerce store, your objective is probably to drive conversions (duh!). Aim for that $50 to $150 per day budget range. This will allow you to learn fast, launch split testing, and optimize your ad creatives.
If you want people to consume more of your content, your objective might be to drive traffic to a blog post or website. In this case, keep your budget at $10 to $20 per day.
And if you’re boosting a Facebook or Instagram post to increase engagement, a simple budget of $5 to $10 per day is a great place to start.
8. Only spend what you’re willing to lose
No matter how seamless your strategy is, digital marketing can still be a gamble. That’s why it’s crucial to only spend money that you’re ready to potentially lose.
Even with a careful blend of past data, market research, and your best judgement, you never truly know if a Facebook ad will meet your goals. Strategize for the bullseye and prepare to miss the target completely.
9. Identify your cost per result limit
Whether your desired result is 10 conversions or 10,000 post likes, deciding how much you’re willing to pay per result is an effective way to build a Facebook ads budget.
For example, let’s say your goal is to get 500 clicks on your ad. A successful cost per click is typically less than $1 and you’re comfortable with paying $0.75 per click. That means your budget might look something like this: $0.75 per click x 500 clicks = $375 total budget
Once the campaign is running, you can track your actual cost per click and adjust future Facebook ad budgets from there.
10. Use your conversion rate to be cost-efficient
Myth: Facebook ads are supposed to be cheap. Fact: Facebook ads aren’t cheap, they’re cost efficient. Facebook offers one of the most (if not the most) cost-efficient ad platforms out there. For example, let’s say you’re deciding between two budget options:
- Spend $200 per month on Facebook ads for a 1.5x ROI
- Spend $1,000 per month on Facebook ads for a 4 – 6x ROI
Whether you choose the cheaper option or the more expensive option, you’re still getting an impressive ROI relative to what you spent. That’s why Facebook ads are a cost-efficient platform – because you’ll see results at almost any budget.
Plus, you can use your expected conversion rate to map out exactly what your Facebook ads budget should be.
Let’s build your paid social budget together
Not sure what strategy suits your business best? Our team of marketing experts can help!
At Followbrands, we offer paid social strategy and management services affordable and strategy-driven. We’ll build out a Facebook ads budget strategy to meet your goals and business needs, without sacrificing quality. Plus, we’ll take care of everything else, from content creation to analytics.
Ready to outsource your social media marketing and budget strategy? Claim your free consultation here.
Have questions about your digital advertising? Contact us anytime or post your question in our Facebook community.