Budgeting is an essential part of an online advertising campaign on Facebook. One effective budget management method provided by Facebook is setting a lifetime budget. In today’s article, Optimal FB Agency will guide you on how to set lifetime budget on Facebook ad.
What is lifetime budget?
A lifetime budget is the total amount of money you are willing to spend over the entire duration of a campaign or ad set. When using a lifetime budget, you must set a start and end date for the campaign and specify the maximum amount to spend on the campaign.
A lifetime budget is a fixed limit, not an average amount. It is useful when you do not want to exceed a specific spending amount and works best if you are flexible about the daily spending amount.
Instead of setting a daily budget, you specify the total amount you are willing to pay for the campaign over the entire decided period. This allows Facebook to automatically distribute the daily budget flexibly to ensure your campaign maintains good performance throughout the set period. In addition, please see more information about: How to use Shopee ads effectively
Advantages and disadvantages of lifetime budget
Advantages
By setting a lifetime budget for Facebook ads, you won’t have to worry about your ads being paused midway. Whether busy or unable to monitor ads frequently, a lifetime budget helps you maintain continuous ad display during the set period.
Moreover, when setting a lifetime budget, you can run ads during pre-determined peak hours when users are most active. This optimizes ad display, attracting more attention and interaction from potential customers.
Facebook will flexibly adjust ad distribution according to performance. On high-performing days, Facebook will boost ads to reach more customers. On low-performing days, it will adjust the budget accordingly. This ensures your Facebook ad budget is effectively utilized.
Disadvantages
Unlike a daily budget, a lifetime budget makes it harder to control daily spending since Facebook automatically adjusts the distribution. If you select a broad or incorrect target audience, you might spend money without achieving any results.
Because the budget is automatically distributed by Facebook, it is challenging to track and predict spending. This makes it difficult to measure the cost-effectiveness of your Facebook Ads campaign.
A lifetime budget requires you to choose an end date for the campaign, making it unsuitable for long-term brand image advertising campaigns.
Further, you cannot adjust the limit, meaning you cannot increase or decrease the budget as needed. The lifetime budget does not support day-to-day changes.
Moreover, if there are many advertisers in the same field, the interaction cost may suddenly increase due to competition. This can make it harder to reach customers and drive interaction costs up unexpectedly.
Both daily and lifetime budgets have their advantages and disadvantages. Depending on your goals, campaign duration, target audience, seasonal trends, and promotions, you can choose the appropriate budget type.
You should only use a lifetime budget for campaigns when you have identified your potential customer base and selected the appropriate time slots to run ads. This helps your ads campaign reach the right target customers.
How to set lifetime budget on Facebook ad?
When setting up an ad campaign in Facebook Ads Manager, you can set the budget at the campaign or ad group level. You can also choose to set a daily budget or a lifetime budget for the entire campaign or ad set duration. The choice of how to set your budget depends on the level of control you want over Facebook’s algorithm to optimize your ads.
Setting the budget at the campaign level
Setting the budget at the campaign level relies on the Campaign Budget Optimization (CBO) feature. This optimizes the allocation of the budget based on selected bid strategies and ad delivery optimizations.
When using CBO, you create a centralized budget and rely on Facebook’s algorithm to distribute the budget across ad sets to achieve the best results. The algorithm determines which ad sets have the best opportunities and allocates more funds to them.
CBO is an excellent setup option for those new to creating ads campaigns on Facebook. It simplifies the process and reduces the number of ads you have to manage manually.
Setting the budget at the ad group level
If you choose to create individual ad group budgets, you have more control over the distribution and measurement of specific ad sets. Setting the budget at the ad group level is a good choice if you have more experience and the ability to manage and measure different ad set metrics.
Choosing the optimal ad budget
There are two options when selecting the type of budget: daily budget or lifetime budget. These budget types allocate your advertising budget in Facebook’s auction process. This process involves Facebook’s algorithm showing the most relevant ads to people based on various factors: goals, demographics, location, etc.
When choosing between a daily budget or a lifetime budget for your ads, this decision will determine how you allow Facebook’s algorithm to bid on your behalf in the Facebook auction.
A lifetime budget helps you set the lowest possible cost for your ads while giving Facebook a limit on how much control they have over your budget.
To set a lifetime budget for Facebook ads, access Ads Manager and set up your campaign as usual. However, in the budget setup step, select the lifetime budget option. You then need to choose the start and end times for the campaign or ad set.
When setting a lifetime budget for a Facebook Ads campaign, you need to consider several factors: goals, campaign duration, ad format, and target audience.
Different advertising goals require different budget amounts to match the campaign’s progress. The longer the campaign runs, the larger the budget will be.
The type of ad you want to display can also affect the budget. Ads targeting harder-to-reach audiences may require a larger lifetime budget.
The more challenging the target audience is to reach, the larger the lifetime budget needed for the advertising campaign.
The above article has guided you on how to set a lifetime budget for Facebook ads. We hope you can apply these methods to optimize ad performance and effectively save costs.
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FAQ
When should you use a lifetime budget for a Facebook Ads campaign?
What is the minimum budget for Facebook ads?
If you have not yet identified the audience interested in your product or service on Facebook, use a daily budget to test interactions. Then, compile statistics to determine the most suitable audience and save costs. Once you have identified your potential customer base and peak interaction times, you can set up ads with a lifetime budget to boost revenue.
The minimum cost to start running, distributing, and displaying ad content to Facebook users is $1 USD. However, this is only the minimum budget, and Facebook sets different minimum ad budgets based on campaign goals. If you set a Facebook ad budget below the minimum required, your ads will not be distributed to Facebook users.
