When it comes to advertising on Facebook, one of the key considerations is how much to spend on your ads. In this comprehensive guide, we will provide you with valuable insights and tips on budgeting your Facebook ads to maximise your return on investment (ROI). By following these strategies, you can ensure that your Facebook ad budget is used efficiently, leading to improved performance and better results for your business. Let’s dive in and learn how to make the most out of your Facebook ad budget!
Level 1: Starting Small and Making a Difference
Even with a minimal budget, as low as £1 per day, you can still have a significant impact on Facebook. With the average cost per thousand impressions (CPM) being £9.77, you can reach approximately 37,359 people in a year.
This means that for just £1 per day, you can get 37k impressions from people who may not have otherwise seen your ad. Starting with a low budget is a great way to get familiar with Facebook ads and understand how they work.
Level 2: Harnessing the Power of Facebook’s Algorithm
To truly benefit from Facebook’s powerful algorithm, aim for 50 conversions per week. These conversions can be add-to-carts or link clicks, depending on your campaign objectives.
By optimizing for add-to-carts, you can decrease the minimum amount you need to spend to take advantage of Facebook’s algorithm. Calculate your weekly budget by multiplying your current average cost-per-add-to-cart by 50. For example, if your average cost-per-add-to-cart is 2.50, your weekly Facebook ad budget should be £125 or approximately £540 per month.
This approach allows Facebook to gather valuable data and find more users similar to those who have already shown interest in your products.
Level 3: Focusing on Purchases
While add-to-carts are an important step in the conversion process, the ultimate goal is to drive purchases. For level three, you should allocate a budget that enables you to achieve 50 purchases per week. Calculate your budget based on your average cost-per-purchase.
For instance, if your average cost-per-purchase is £11, you need to budget £550 per week or about £2,360 per month on Facebook ads. By spending enough on Facebook ads to drive actual purchases, you increase your chances of generating revenue and growing your business.
Level 4: Continuous Improvement and Profitability
Once you have successfully met the budgets required for levels two and three, it’s time to focus on continuous improvement and profitability. Your goal in level four is to achieve a low enough cost-per-purchase to be profitable while spending enough to have at least 50 conversions per week.
If you’re spending profitably, you should consider spending as much as you can while maintaining that profitability. It’s crucial to continually optimize your ad creatives and target audiences to improve performance and reduce costs.
Leverage Facebook’s algorithm by aiming for 50 conversions per week and optimise your campaigns based on your specific objectives, whether it’s add-to-carts or purchases. Continuously improve your ad creatives, target relevant audiences, and make use of Facebook ad automation tools like Revealbot to streamline the process and reduce wasted ad spend.
Stay vigilant, monitor performance, and adapt your strategy as needed to ensure ongoing success with your Facebook ad campaigns.