Make Money Running Facebook Ads For Local Businesses – Underspend your Facebook advertising budget and risk losing business. Spend a lot and your monthly marketing budget will disappear. What should a social media marketer do?
Never guess your Facebook ad budget again! This guide tells you what you need to know about Facebook ad budgets – from explaining budget types to showing you how to get the most out of every ad dollar.
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We’ve also included a free Facebook ads budget calculator, which can tell you exactly how much you’re spending on Facebook ads to reach your marketing goals.
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Whether you want to increase impressions or generate more sales, you can decide exactly how much to budget for your next ad campaign in order to be successful.
Depending on the type of ad campaign you’re running, these budget options can help you maximize your hard-earned advertising dollars.
It is likely that you will be running more than one Facebook ad at a time. But how do you decide how much money to give to each ad group out of your total Facebook ad budget? You answer this question when you choose between a campaign budget or a specific ad budget.
With a campaign budget, you can set one overall budget for all your ad groups and let a Facebook algorithm called Campaign Budget Optimization (CBO) decide how best to spend it. Instead of each ad group getting the same amount of money, Facebook will determine which ad groups will give you the most return for every dollar you spend.
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However, campaign budgets have some drawbacks. The algorithm may not understand that one of your ad groups has value beyond surface metrics. For example, if one of your ads targets a small but important new market that you want to break into, the CBO may take advertising dollars away from it because it may not see the future value those ads can bring.
Ad set budgeting gives marketers the ability to control how much money is spent on each ad set.
Overall, the most important feature of budget ad sets is that they give you control. The downside is that you have to be the one to monitor and improve your bidding strategies. When you only have two ad groups, this can be fine, but errors can happen as the campaign grows.
Now that you know how to divide your money between ad groups, you need to decide how each ad group uses its budget over a period of time. Facebook refers to this as budget duration.
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Perpetual budgets are ideal for predefined campaigns. You start by entering the end date and total spending amount. Then you let Facebook pick and choose the best times to run your ads.
The Facebook algorithm will serve ads based on when it thinks you’re getting the best return for your ad dollars. With this type of budget period, there will sometimes be a significant variance in the amount spent per day.
Depending on your situation, a permanent budget may be the best way to deliver your ads, especially if day-to-day consistency isn’t your primary concern.
In contrast, a daily budget set an average dollar amount per day, and Facebook would do its best to reach that goal per week. Every day, Facebook is free to deviate from your average by up to 25% if they think they can get more value for you by moving the numbers around a bit.
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Each of these types of budgeting has positive and negative aspects, and the one that works best for you is what you want to achieve.
Now that you know the different types of budgets, you can start looking at how to determine the ideal budget for your campaign.
To help you find the best budget for your Facebook ad, we’ve built a calculator that crunches your numbers and spits out how much you need to spend to reach your Facebook marketing goals. But it needs some raw data to work. The following steps will help you get these numbers so you can use the calculator to grow your Facebook business.
If you are already running your Facebook ads and just need the calculator to optimize your budget, click here to download the Facebook Ad Budget Calculator now.
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Start your budget by defining the concrete goal you want to achieve with your Facebook marketing efforts. Once you have set a goal, you can begin to decide what you need to spend to achieve it.
Within each of the broad campaign goal categories are more specific marketing goals for your ads. When you set up your ad campaign, you choose one of these goals so that Facebook can optimize your ads with that goal in mind.
For example, if you want to focus on creating a list of leads, Facebook will help you create a lead ad where you can collect information about leads that you can follow later.
There are a total of 11 different marketing objectives that you can optimize for. To learn more about these goals, check out our in-depth guide to marketing goals.
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Each type of campaign objective can have different costs. Fortunately, we have hard data to help you understand how much you might need to spend to reach your goals before you start testing your new ads.
Facebook ads work on the auction system. Every time there is an opportunity to show a Facebook user an ad, Facebook will hold an auction of relevant ads and then display the ad with the highest “value” (combination of bid amount, estimated action rate, and ad quality). Depending on several factors (including your goal, target market, time of day, etc.), your Facebook ad cost may change.
This is all great, you say, but what will it cost me? Well, let’s look at the statistics.
As you can see, some goals are much more expensive than others. If you want to create an ad group designed to increase impressions, it will cost you more than just link clicks.
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This means that you need to make sure that you are following the best campaign objective for you. Choosing the wrong target will not only waste your time but also potentially waste a fair amount of money. Start by getting a picture of what your budget might need to reach your goal.
You won’t know what works in the wilds of Facebook until you try it. The test allows you to see which ads should be returned to the horses and which should be put out to pasture.
In general, you should start with a small ad spend of 3-5 days (even $2-5 per format will do) to see how well different ad groups perform.
The longer an ad is displayed, the more data it contains and the better Facebook is at displaying it. By leaving the ad for approx. five days you should have enough performance data to evaluate the campaign. You don’t want a good ad to be thrown around on one bad day.
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After you’ve finished collecting your data, you’ll start to see which ads are performing the best and you can start rolling out your ad campaign.
However, you should never forget to continue to optimize your ads as your campaign progresses. Get a complete overview of how to A/B test like a pro by checking out The Beginner’s Guide to A/B Testing for Facebook Ads.
After five days or so, you should start to figure out what is (and isn’t) working in your ad strategy. It’s time to spend your budget and achieve your goals.
You can change your Facebook ad budget by going to Facebook Ads Manager. Once there, you’ll want to:
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Track and optimize your campaign based on how well your ad is performing. You can learn more about how to see if your campaign’s performance is breaking it or not by reading about Facebook’s optimization strategies.
Wait wait wait Did we miss a step? How do you know how much to spend on Facebook ads to reach your marketing goals? Learn from mistakes? Tarot card reading?
You can try this, but it’s probably much easier to use the Facebook budget account.
If you’re working with smaller advertising dollars, you can still market on Facebook. To find out how, see our guide on how to succeed with Facebook marketing on a budget.
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The Facebook ad budget calculator will help you determine how much ad spend you need to achieve your ad campaign’s marketing goals.
All we need is to enter your data in the left column and you will get your results in the right column.
With this information, the Facebook Ads Budget Calculator estimates your campaign budget, which is basically the cost of getting enough sales to reach your goal.
It may seem daunting at first, but Facebook ad budgets get a little easier with practice. The best part is that once you learn how they work, you can get the most out of every Facebook ad campaign you run.
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We know budgeting isn’t the most exciting thing. But
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