by Camila Porto | Oct 28, 2022 | Facebook | 19
A question that many people have when they are starting to advertise is: how much to invest in facebook ads so I can get a return on my company? The answer to this question is simple: it depends!
There are several paths in digital marketing that you can take to set the budget for your Facebook ads. Therefore, it is very complicated to stipulate a default amount to be invested.
We have students, for example, who invest R$5 and manage to generate expressive results on social networks. Others invest R$50 or hundreds of reais and don't get many positive results. The cool thing about advertising on Facebook is precisely the flexibility of prices offered.
The important thing is that you keep in mind that you MUST advertise to get results within Facebook. After the change in the organic algorithm of the social network, it became more difficult to achieve reach. That is why, ADVERTISE.
This text will help you if you know you need to invest, but you always have that question in mind: “How much to invest in Facebook Ads is the ideal for my company?”.
For this, we separate 3 tips to define how much to invest in Facebook Ads to achieve results.
Facebook Ads Price? What is the minimum amount?
Not everyone knows, but there is a minimum amount to start advertising on Facebook Ads. The good news is that this value is quite accessible and a standard rule is that the value is, at least $1 per day, according to Facebook.
As the dollar can vary, when you create your campaign, it is possible that Facebook will inform you that the value is too low. If so, it will suggest a minimum amount based on your campaign objective, audience size and competition.
How much to invest in Instagram Ads?
This question is pretty common too. Generally speaking, the budget of an ad campaign is split between Facebook and Instagram.
In short, when you create a campaign, you can choose whether to run your ads on Instagram only, Facebook only, or both.
Therefore, how much to invest in Instagram Ads will depend on the performance your campaign has on Facebook and/or Instagram.
Learn More: Facebook and Instagram Ads Guide
Many people ask if they should advertise only on Instagram. My answer is it depends, because in some businesses Instagram generates more results. Therefore, testing is always recommended. If you are going to create a new campaign, start automatically.
As you have more data, track ad performance on each social network. From there, you will have information to define whether to leave your budget only on Instagram Ads, only on Facebook, or on both.
How to invest in Facebook?
This is a broad topic and can range from how to create your ads to billing methods. When we talk about charging methods, the most common is charging for impressions.
Imagine that Facebook or Instagram is a billboard. Each time your ad appears on that billboard, you will be charged. This charge is per view, not necessarily when someone clicks on your ad.
This is the billing pattern. The metric to know how much you are paying per impression is CPM or Cost Per Thousand. This is the amount charged by Facebook each time your ad appears a thousand times.
Another way to be charged is CPC or Cost Per Click. If you think about it, it makes more sense to be charged when someone clicks on your ad right?
Yes, but no. Currently, Facebook works very hard with artificial intelligence in optimizing the delivery of ads. This is controlled when you define which conversion you want to generate with your ad.
If you want to generate leads, for example, you must optimize your ad for this objective. For this, choose the conversion campaign objective and, in the second moment, registrations. If you choose to be charged per click, Facebook will look for people who will click on your ad, not necessarily become your lead.
Learn More: Facebook Ad Budget Types: Which One to Choose?
In short, each campaign has its objective and you need to know what you want with it as an advertiser.
How much to invest in Facebook Ads? 3 tips to decide how much to invest
Now that you know a little more about how much to invest in Facebook Ads and Instagram Ads, let's go to the tips on how to set your budget. A fundamental piece of information is that you are in the habit of collecting data about your investment.
So, as a 0 tip, we always recommend setting aside time in your week to evaluate how your ads are performing. Set aside one morning a week and look at everything you can to get data and insights to improve your ads.
1. War money
The first step to be taken to know how much to invest in Facebook Ads is to find out how much money your company has available. At this first moment, you don't have to worry about large sums.
Think about how much fits in your pocket, because you have to define your war money. This amount is an amount you can invest and, if it doesn't work out, it doesn't impact your business's cash flow. It's like a value to enter the field and feel the market.
Keep in mind that this amount is called war money precisely because it does not provide a guarantee that your ad will bring your money back. Because, like any investment, there is no guarantee of return.
The fact is, there are many people who generate interesting returns with their Facebook ad campaigns. If you've never advertised, start with a value that fits in your pocket. It can be whatever you can invest.
With this value, you will already be able to know how things work, how to create your campaigns and you will know the impact that ads can bring to your business. Separate a value that will not be missed and start to understand how things work.
how much to invest in facebook ads
Ideally, if you are starting out, set aside a total amount to invest in marketing your company. After defining this value, it is interesting that you reserve 10 to 20% of the total to carry out the initial tests with Facebook Ads.
To be clearer: let's say your company is going to allocate R$200 per month to marketing. So, to start testing with Facebook ads, invest something between R$20 and R$40.
After testing, you can identify whether your ad has generated results. If you've done more than one ad format, you can measure which one performed the best. That way, you allocate the available money to the ads that were most effective.
2. Make more than one ad
After defining the amount that will be allocated to your ads, it is important that you make more than one campaign model. With two or more ad models running, you can check the impact each one has had on your audience and choose the best one for your business model.
In your testing phase, check what you can change in your ad. You can, for example, use a different phrase or image, change the targeting demographics of that ad, and even produce the same content in a different format.
Learn More: A/B Testing on Facebook: find out which ad brings more results to your business
Using the previous example, where you set aside something between R$20 and R$40, allocate R$10 to two different ads that contain the same content. Run both for different audiences and follow the result that each one achieved and decide which one is best for your business.
So you can track and analyze the results of your campaigns. Check metrics like cost per click, cost per lead and cost per sale to see if you need to change your investment amount.
The idea is for you to find out which formats are best for your business. Keep in mind that it's all a matter of practice, which you only acquire by testing. But don't forget, this test must be performed after your analysis responsibly.
3. Run ads for a minimum time
After defining the amount you will invest in the ads, setting aside a part of this amount for testing and running more than one campaign, you need to worry about how many days your ads will run, within the available budget.
We suggest that you run the ads and test for at least a week. At 7 days long, you have enough data to measure how your audience is reacting to your content. The cool thing is that you will also understand the dynamics of Facebook Ads.
In the same example, where you set aside $20 for two formats of one ad ($10 for each), allocate $1,4 daily (if the minimum budget is sufficient) for each of the ads. On the seventh day, after your campaign ends, analyze the data obtained to see which ad performed best.
Already advertise, but don't know if the value is adequate?
If your company already advertises on Facebook, the ideal thing is that you analyze the data you already have. Therefore, keeping a track record of results is essential. With them, you can check if the amount you are investing is adequate for your profile.
We recommend that you analyze some metrics such as: CPC (cost per click), CPL (cost per lead), CPV (cost per sale) and ROI (Return on Investment).
CPC, CPL e CPV
By analyzing the metrics, in addition to knowing the best format for your audience, you can set a revenue goal with your ads.
In the previous example, imagine that of the R$10 you invested in one of the ads, you got a return of R$50 in sales. While the other returned him R$30.
With this data, you already know that the first ad format impacts your audience the most. From there, you can stipulate that your ads have a goal of returning you $50 in sales.
Based on the return metrics of this ad, you can define important points. Check how many people needed to buy for you to reach R$50. Then see how many leads you needed to reach those customers and how many visits you had to reach the number of leads and how much each click cost your business.
To make it easier: imagine that you had to make 5 sales to reach R$50 in revenue. To generate those 5 sales, you generated 7 leads. These leads were generated from 10 visits to your website and that each visit cost R$1, in the ad click. So you spent $10 on Facebook clicks to earn $50 in sales.
In short, you can check your metrics from your revenue goal to the number of people you need to reach. It's like a sales funnel. Learn more about sales funnel strategy.
It is important that you check your investment history and know what your ROI (Return on Investment) is, which is the amount of return you got from your campaign.
In the example we used, you invested $10 and got a return of $50 in sales. Your ROI, in this case, was 5 times the amount invested. Therefore, for every R$1 you invest in your ad, you will possibly earn R$5.
The key point of this is that you get an average return value with ROI. Of course, ROI can vary. Therefore, it is important that you always have the history of investments and returns from your ads.
how much to invest in facebook ads
If your ads aren't driving results for your business, you may need to change your Facebook strategies. With that in mind, we’ve listed some mistakes when advertising on Facebook that you might be making.
Now that you know how you can set your Facebook Ads budget and how much to invest in Facebook Ads, advertise and watch your results. Thus, it is easier to define how much you want to invest in a next campaign.
Extra Tip: Just like your audience, ads are constantly changing. Always follow your Ads Manager and observe how your campaigns are doing to optimize them according to your needs.