How to Determine Your Facebook Ads Budget

I’m often asked what a minimum Facebook ads budget should be in order to get results. This is a complex question, and the answer is based on several contributing factors.

But, let’s break this down and focus on running a single campaign with a single ad set.

There’s some math involved (don’t be scared!).

Determine Your Optimization Goal

Before you set a budget you have to figure out what it is you’re trying to accomplish. Why? Because it takes far less budget to make an impact with top-of-the-funnel actions than with the bottom-of-the-funnel.

Do you want to drive purchases? Leads? Website traffic?

Figure this out first.

How Much Will One Action Cost?

If you’ve never advertised before, this could be more difficult. But, instead of thinking about what something will cost, think about what it needs to cost for your advertising to remain profitable.

Actually, not even profitable. Just break even. We want to leave room so that you can cut budget if necessary.

Just as a rule of thumb, let’s consider purchases. A $100 product may cost you $50 per purchase in ads. This is purely hypothetical, but it’s possible. So many factors contribute to that cost.

Leads are often somewhere between $3 and $10, but it really depends on what the offer is and how much information you’re asking for.

Traffic is all over the map, depending on how engaging your link is and how expensive it is to reach people. A single link click might be under 10 cents or it may be over $2.

Do Some Math

In order to properly optimize, you need to get your ad set through the learning phase. This is the period of time once your ad set is published (or you make a significant change) when Facebook is learning from the actions that happen.

This period generally lasts three to seven days and ends once you can get between 25 and 50 optimized actions (not a strict number these days). If you are unable to get enough optimized actions to exit the learning phase, your ad set will move to “learning limited.”

Let’s assume you need 50 actions within a week. So, multiply your projected cost per action by 50 to get your weekly budget. Divide that by seven to get your daily budget.

There’s Wiggle Room

Look, if you’re looking to sell a product, this math could get intimidating fast. If you project a $50 per purchase cost, you’re looking at $2,500 per week ($10,000+ per month). That’s not realistic for many small businesses.

But also remember that we don’t know what that purchase will cost you. It could be less. We also don’t know if you’ll exit the learning phase at 50 actions or fewer.

The budget could end up being half as much. But you should prepare for the high end, just in case.

Do You Need to Exit the Learning Phase?

Of course, even after the wiggle room, you may not even be close. In that case, spend what you can without breaking the bank and see how it goes.

Just know that the learning phase is a real thing. My best results come after I give Facebook enough data to properly learn. Your costs may be higher if you aren’t able to exit the learning phase.

You Have Options

Keep in mind that optimizing for a purchase isn’t required if you want sales. There are other ways to get your client some revenue.

Start with the low-hanging fruit. Run Reach campaigns to target abandoned cart — or people who hit the product landing page, initiate checkout, or add to cart without completing the purchase.

Target just those who did this during the past 14 days. Use a frequency cap of 3 impressions per day. Give these people a special offer to complete the purchase.

This is a great way to generate sales without spending a bunch of money.

Your Turn

This is a starting point. Your minimum budget is a math equation. Just know that your ultimate costs are reliant on several things that are going to be different from advertiser to advertiser and brand to brand.

What exercises do you use to determine your Facebook ads budget?

Let me know in the comments below!