How much should you spend on Facebook Ads?

So how much should you spend on a Facebook campaign? 

In this post I’ll talk you through the process that we follow in order to answer that question. 

OK, let’s get started….

Step 1 – Define your audience
If you know who you’re targeting, then you can define the size of your audience. At that point Facebook will give you an estimate of what it’s going to cost to reach that audience. 

Typically, I break the target audience into 2 areas:

1. Warm Audiences
2. Cold Audiences

Your warm audiences are people who have shown some kind of interest in your product/business. When we work with clients we will normally target the following warm audiences:

• Your page fans
• Your website visitors
• People who have engaged with your FB page

There are other warm audiences but these are the ones that we like to work with. 

Warm audiences are where we put our first advertising dollars. 

Then we turn our attention to cold audiences. These are the audiences where we use interest, demographic & behavior targeting to identify a group of people who are likely to fit into one of our customer personas. 
 
How much will it cost to target these audiences?
So, you’ve defined your audiences, you now need to figure out how much you need to spend to reach them. 

To understand that, you need to head into Facebook’s Ads Manager and follow these steps. 

• In Ads Manager, click create ad. 
• Define your audience. 
• Facebook will give you an estimate of how many people fit in to this audience.
• Select a budget. 
• Facebook will then give you an estimate of how many people you will reach within that budget. 
• Please note that the budget to reach ratio is not linear. So, if you spend $100 and get a reach of 3000, you won’t necessarily get a reach of 6000 if you spend $200. 

In the example below, I have selected an audience of 92,000 and I can see that a budget of $50 per day will give me a reach of between 2800-9500. 

Whilst this is a big range it does give me a rough estimate. I can then monitor the campaign once it’s live to see my actuals. 

Structuring Campaigns
When I set up a campaign, I’ll have several Ad Sets all of which will target a different audience. The benefit of this is I can see how each audience group is performing in comparison to one another. 

A campaign structure might look something like this:

• Ad set 1: Page Fans
• Ad set 2: Website visitors
• Ad set 3: People who have engaged with my page
• Ad set 4: Cold audience 

In each ad set by defining my audience I can see the number of people within it and thus how much I’ll need to spend. My campaign spend will be the sum of all 4 ad sets. 

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I hope that provides you with a process to understand ad spend better. Of course, this is campaign specific and it doesn’t help you strategize how many campaigns you should run and how often. 

If you need help on that front, drop us a line and let’s have a chat.