To determine an advertising budget, beginners can start with a small amount and gradually increase it after gaining experience and a better understanding of the effectiveness of the campaign. How to increase or decrease the budget also needs to be carefully considered, by performing tests and monitoring campaign performance. In this article, Optimal FB will share knowledge and experience related to setting up and managing Facebook ads budget strategy. Hopefully, the information we share will help you organize your advertising campaign most effectively.
What is a Facebook advertising spending budget?
The Facebook advertising budget is the amount of money a business or individual decides to spend on advertising on the Facebook platform. This is an important part of managing an advertising campaign on this social network and plays a decisive role in determining the scope, effectiveness, and goals of the campaign. Facebook advertising budgets can be set in a variety of ways, depending on your specific business goals, available budget, and advertising strategy.
Facebook offers users two types of spending budgets
To choose a budget for your advertising campaign, you can refer to the following specific budget types:
- Facebook’s daily budget is the amount of money you spend on advertising each day with no end time limit. For example, if you set a daily budget of 50k, Facebook will distribute and spend all of this 50k that day. Then, starting at 0:00 the next day, the budget will be refreshed, and continue to spend a new 50k.
- A lifetime budget is the amount of money you set aside for Facebook advertising over a certain period. For example, if you set a lifetime budget of 1 million VND in 10 days, Facebook will distribute and spend all 1 million VND in 10 days. However, Facebook will distribute and spend money based on ad engagement, not necessarily equally divided each day. For example, on days with good interaction, you can spend up to 200k, but on days with poor interaction, you can only spend 70-80k.
Advertising budget-setting levels
On Facebook, advertisers can set budgets for both campaigns and ad groups. Here’s the difference between setting budgets at the campaign and ad group levels:
- Campaign level: When setting a budget at the campaign level, the advertiser sets the budget for the entire advertising campaign, including all ad groups within that campaign. This means the advertiser will split his budget across all the ad groups in the campaign, and Facebook will automatically optimize your budget across the ad groups for best performance.
- Ad groups: When setting a budget at the ad group level, the advertiser sets the budget for each ad group within the campaign. This means advertisers will have tighter control over the budget for each ad group, being able to adjust each ad group’s budget separately to optimize the campaign.
Setting budgets at the campaign and ad group levels has its advantages and disadvantages. If you want tighter control over your budget and want to optimize performance for each ad group, you should set your budget at the ad group level. However, if you want to simplify budget management and want Facebook to automatically optimize the budget for the entire campaign, you should set the budget at the campaign level.
How to set up a Facebook ads budget strategy
It’s important to understand the numbers that matter in marketing and sales to create a Facebook ads budget strategy. This helps you consider the goals of your advertising campaign appropriately. Most businesses want to increase revenue, which means finding more potential customers and boosting sales.
Typically, businesses’ marketing budgets will range from 5% to 12% of revenue. For new businesses, it is important to gain insight from customers before making decisions about advertising budgets. The most effective way is to use word-of-mouth or referral marketing. Businesses can get started by seeking information from trusted industry sources and sharing ideas from existing relationships. For companies that are just starting to advertise on Facebook, the budget usually ranges from 5% to 12% of revenue for rapid growth. However, if your business already has stable profits, spending about 5% of expenses from revenue is a reasonable number to maintain and grow slowly. To easily track campaign effectiveness, there are several important metrics that businesses need to pay attention to, including:
- Cost-Per-Lead: This is the amount you pay for each lead. Deciding on this cost level is very important because even if potential customers have not become real customers, they are still the audience you need to reach to increase sales opportunities.
- Customer Acquisition Cost (CAC): This is the amount of money you have to spend to attract a customer. This helps you consider the appropriate cost to achieve the desired number of customers. Each business has different sizes and products, so no fixed number applies to all companies. When there are many products and services, CAC will correspond to each product and the desired level of customer purchases.
- Conversion Rate: Conversion rate is the ratio between the number of potential customers and the number of actual customers. Determining your conversion rate helps you identify potential customers and convert them into customers, which is extremely important for offline and online businesses.
In the above article, Optimal FB has shared with you the detailed content in the most accurate way. We hope that the information we have listed can help everyone learn about the details spend on Facebook ads and implement methods to set up a successful budget strategy on the platform.
Contact Info
We provide services facebook dropship ads nationwide, and with a team of experienced and qualified staff who both support advertising and can directly perform Facebook advertising if you need. Contact us via phone number: +84 564 104 104 for detailed advice.
Frequently asked questions
Comparing group budgets and campaign budgets in Facebook ads is an important part of determining your advertising strategy. A group budget is the amount allocated to each ad group within a campaign, while a campaign budget is the total amount allocated to the entire campaign, including all ad groups within the campaign. Group budgets allow flexibility and more granular control over spending for each ad group, while campaign budgets help simplify budget management and overall optimization of the entire campaign. The choice between the two types of budget depends on each business’s specific advertising goals and strategies.
Experience running ads on Facebook is an important part of building an effective marketing strategy on this platform. To be successful, understanding your target audience, optimizing your advertising content, and using analytics tools are indispensable. In addition, budget control and campaign effectiveness tracking also play an important role. From constant testing and adjustments, marketers can gain valuable experience to create increasingly effective and successful Facebook advertising campaigns.
