How Much Should I Spend On Facebook Ads?

In today's edition of Digital Marketing Mastery, we talk about Facebook Ads and how much of your marketing budget you should spend on them.

Marketing your business on Facebook is one of the best ways to scale it to phenomenal heights. An effective way to promote your brand is through Facebook ads.

They target a broad audience and drive extensive traffic directly to your site. However, marketers wonder how much to spend on Facebook ads so that they can set aside a budget.

To help you out, this blog will enlighten you on how much you should spend on Facebook ads.

How Much Should I Spend On Facebook Ads?

A survey estimated that around ten million active users on Facebook promote their brand's products and services.

Numerous marketers execute top-tier marketing strategies and plans that spike their sales and profits. Following that, some marketers often spend too much on Facebook ads to stave off competition. This wrecks their whole budget, thereby leaving their brand in ruins.

On the other hand, some marketers spend too little, rendering their Facebook ads ineffective in driving traffic to their brand's website.

As a result, the primary concern of every Facebook Marketer is 'how much should I spend on ads.' They all want productive and beneficial spending wisdom to assess what amount would be helpful for them.

Usually, any organization's standard marketing budget, whether on or off social media, is 5%–12% of revenue. However, some new companies may like to spend around 12% of their earnings to spike abrupt growth and brand recognition.

Always remember to spend an adequate amount on your brand's marketing. Avoid spending stacks of cash initially as you are unsure how effective your Facebook marketing strategy will be.

Furthermore, Facebook's marketing strategy for small businesses may be less than this. They comprise a tight budget and fewer resources and typically spend no more than 5-7% of their total earnings on Facebook ads and other social media platforms.

However, we suggest spending $20 per day on Facebook ads for an average-sized business. You should execute this exercise in 15 ad sets for a week. This means that you will be spending $1,000 as an initial investment.

Wait to see the results, and based on them, you can decide whether to increase or decrease your Facebook marketing budget for ads.

Essential Aspects That Will Influence Your Spending On Facebook Ads

You need to smartly assess how much you should and can spend on every aspect to stay within your budget. Some of these aspects include:

Cost Per Lead

Before making a sale, it is paramount to gather leads and attract them to your offer. Therefore, you need to assess how much you would need to spend on Facebook ads to land a single potential lead.

Cost Per Core Event

Some businesses need to have a conversation with their targeted audience to make a successful sale. For that, they must plan an event to convince their potential customers. Following that, it is essential to decide and set a fixed amount for your event.

Cost per Customer Acquisition

While setting your Facebook budget, don't forget to include the cost per customer acquisition. Your price may differ if you have different products and services to promote through your Facebook ads.

Conversion Rate

Assessing your conversion rates is also a vital aspect that influences how much you should spend on Facebook ads. You need to determine how many leads you need to get an appointment with your customer or strike a successful sale.

To know how much should I spend on Facebook ads, it is essential to pay heed to several factors

  • You should know how many leads you will need?
  • What will be your cost per event?
  • How much should you spend to acquire an old or new customer?

Spend According To Your Industry's Click-Through Rate (CTR)

Facebook ads have different Click-Through Rates. This is the number of times users clicked on your ad after it was showcased. Let's look at the different CTRs of varying industries':

  • Apparel: 1.24%
  • Auto: 0.80%
  • B2B: 0.78%
  • Beauty: 1.16%
  • Consumer Services: 0.62%
  • Education: 0.73%
  • Employment & Job Training: 0.47%
  • Finance & Insurance: 0.56%
  • Fitness: 1.01%
  • Home Improvement: 0.70%
  • Healthcare: 0.83%
  • Industrial Services: 0.71%
  • Legal: 1.61%
  • Real Estate: 0.99%
  • Retail: 1.59%
  • Technology: 1.04%
  • Travel & Hospitality: 0.90%

If the click-through rate is higher, do not hesitate to spend wholeheartedly. However, if it is not so much on Facebook ads, you should restrict your spending. Keeping that in view, you should budget your Facebook ads spending.

Wrapping Up

Spending on Facebook ads is a constructive way to market your niche as the platform's reach potential is massive, with over 2,910 million active users per month.

However, one can get confused about how much money should be set aside to market on Facebook. This is why hiring experts to call the shots would be in your best interest.

Designs By Mikey, LLC is an excellent digital marketing agency that caters to all your Facebook ad posting and budgeting needs.

Our world-class social media marketing services increase conversion rates, improve brand recognition, and bring extensive traffic to your brand.

Got doubts, concerns, or want to hire us? Get in touch today!

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