Facebook is the most popular social media channel on the internet. Currently, it consists of more than 2.93 billion monthly active users. This population is the result of a 0.8% rise within the previous three months. Thus, marketers consider it one of the best digital marketing services.
The downside of its increasing popularity is the rising budget of Facebook ads. With plenty of professionals investing in this social media network, allocating the right budget is necessary. This article serves as a guide to help beginners determine the right amount for Facebook marketing.
Before we proceed, let us learn how to set your ad budget on this network.
How to Set Your Facebook Ad Budget?
The Facebook ads manager is the right tool to set an ad budget. It helps you set up an ad campaign and determine the budget at the ad set level or the campaign level.
Setting Your Budget at the Campaign Level
Firstly, the Facebook ads manager provides the option of the budget set up at the campaign level. Here, you give attention to the campaign budget optimization (CBO). It helps to centrally create a budget based on the Facebook algorithm.
This algorithm is efficient enough to find out the best ads for you. Also, it invests your money in the ads that are examined to provide positive results. CBO serves as an opportunity for marketers new to Facebook ad campaigns. It eliminates unnecessary ads and simplifies the process
Setting Your Budget at the Ad Set Level
Secondly, the ad set level is an option to determine your ad set budget. It involves the optimization of multiple ads at a time. You can apply the same settings to each ad or customize them individually.
Keeping ads different from each other provides better control. Also, it is a beneficial method that allows you to customize your location, audience, and bid strategies for every ad.
The Types of Ad Budget
No matter if you set the budget for ad sets or campaigns, two options are available for selecting the ad type. These include a lifetime budget and a daily budget.
Daily Budget
A daily budget refers to the amount you specify for an ad campaign and ad set regularly. Make sure to determine an average of the total amount you are willing to spend every day. It is because the Facebook algorithm works by investing in the best ads only. Henceforth, it has the permission to cross 25% above the specified amount to grab the right ads.
Lifetime Budget
A lifetime budget refers to the total amount you are willing to spend on an ad set or ad campaign. It differs from the daily budget in terms of expenditure. At this point, the Facebook algorithm will not cross the specified budget. Instead, It will utilize the budget by strategically investing in the best ads only.
Which One to Choose?
The debate between a daily budget and a lifetime budget is simple. Both types have their potential for promoting your business. By specifying a lifetime budget, you get more control over the amount of money you’re willing to spend. Also, it serves as a one-time investment With results that will follow.
Whereas, by working through a daily budget, you must be ready to spend 25% above the specified amount. Another option to let hold of your spending limits is at the account level. It helps to control the expenses for Facebook ads at the campaign level as well as the ad set level.
How to Determine the Right Amount to Spend on Facebook Ads?
Regardless of the type and level, strategy is an important element to determine the Facebook ad budget. There are several ways through which you can prevent overspending on this type of social media marketing. According to experts, 5% to 15% of your overall revenue must focus on the ad budget. Moreover, you must follow some tips and work as per your plans.
Use Your Budget for a Minimal Start
The most common mistake among marketers is the wrong distribution of the budget. Rather than investing a little at the beginning, advertisers play blind on their investments. This step takes a wrong turn and brings adverse results.
The right way to do this is, to begin with, a little amount for a small period. For instance, $2 to $5 for a week or two may serve as the right strategy. Start one or two low-cost campaigns on a minimal scale and track the results.
To Maintain a Helpful Record, Track the Following Metrics
Conversion Rate
The rate at which your ad transforms to a potential customer of conversion is known as the conversion rate. If you have a low value for this metric, check the landing page URL of your placed ads.
Cost Per Action (CPA)
When you set an ad or campaign, the ad manager asks for an action that customers may take in response to your ads. If your ad leads to high efficiency, more viewers take the desired action. As a result, Facebook charges for this action and informs you about the performance.
Cost Per Click (CPC)
In this metric, the budget breakdown refers to every individual click on your ads. The Facebook algorithm charges every time a visitor clicks as per your specified objective.
Cost Per Mile (CPM)
This metric breaks down as the cost for every thousand impressions. It means, that whenever your ad appears in a Facebook browsing session for the first time, it is considered one impression.
Cost Per Result (CPR)
This metric is similar to CPA. It means, that if your ad leads to high efficiency, more viewers take the result intended by you. In response, Facebook charges for this result and informs you about each charge.
Click-Through Rate (CTR)
In this metric, Facebook focuses on the rate at which visitors click on your ads. Remember, a high CTR value means a highly efficient and performing ad. Whenever you get positive results for this metric, try copying it in the future for better results.
Give Attention to Your Goals
Defining your goal is the most necessary part of a Facebook marketing strategy. You can only set your budget if you are sure about the results you wish to achieve through your ads.
According to experts, there are three popular campaign goals. These include,
- Conversion of your target audience into customers.
- Providing a trust factor to your audience through which they consider you as a source of help.
- Attracting your target audience to your ads and products.
Refer to the Facebook Auction System
Do you know that Facebook ads work using an auction system? Whenever This social media network gets the chance to advertise to a user, It conducts an auction. Later on, it only displays the ad with the highest value to the user.
For this reason, estimating an ideal amount for Facebook ads is tedious. These charges vary According to a few factors like the time zone, the target market, and one’s basic requirements.
Final Thoughts
Budgeting for Facebook may seem difficult at the start. However, this procedure gets easier with practice. Using your budget rightly is necessary to let your venture grow quickly.
Once you understand how to invest in Facebook ads, future planning will become a piece of cake. Always think twice before investing a huge amount in business promotion. Also, be prepared for any unplanned adverse results and learn to handle challenges.
If you are already familiar with Facebook budgeting, please share some of your tips with us. Also, let us know about any important points that we have missed. Do not forget to leave your reviews about the importance of Facebook marketing.
