How much should I spend on Facebook ads?
Somewhere along the way, the idea evolved among business owners that Facebook ads would offer really cheap results. This might be a hangover from back when you could reach customers organically (oh those were the days!) It could be because Facebook will try to lure businesses into advertising by trying out a little Boosted Post here and there. “Just put £30 behind it, see how it goes!” (It rarely goes anywhere.)
When it comes to creating and running a proper advertising campaign through Facebook’s Ads Manager platform, the old saying rings true: you get what you pay for. Let’s look at Facebook advertising in context: this machine is HUGE! During the second quarter of 2020, Facebook reported almost 1.79 billion daily active users, and it has built up a detailed data profile of each and every one. Furthermore, in 2020 Facebook reported that 9 million advertisers were using the platform to reach their consumers. In short: this is a busy, busy space.
How does the auction process work?
When you submit your ad for review, Facebook will consider it alongside the countless other ads that have been submitted by other advertisers who also want their content served to the same users that you do. Facebook’s advertising model is unique in that, while it is financed entirely by ads, it considers the user experience to be equally (if not more) important than ad revenue. There are 3 factors that determine whether and how much Facebook will serve your ad. These are:
- Bid Price: the price that you are willing to pay for the desired action (ie a purchase)
- Estimate Action Rate: the likelihood of your target audience actually taking that desired action
- Relevance and Quality – how compelling your ads are to your target audience, and the quality of those ads (which is determined by the amount of positive or negative feedback)
So, if we assume that your ad creative is just as good as the next one, and your offer is just as compelling as the other advertiser’s offer – if the other advertisers are spending more than you are, which ads will Facebook choose to serve? Not yours!
If your previous experience of advertising on Facebook involves putting £200 behind a Boosted Post, running a full campaign through Ads Manager is going to feel very different! It is a far more sophisticated tool and requires a significant investment of time and money before you can really reap the rewards.
Your prospects are among those 1.79 billion daily active users. But do you know yet:
- How to find them?
- What offers they are most likely to respond to?
- What sort of imagery they prefer to see?
- How much you need to spend to reach them if other advertisers are trying to do the same?
The only way to learn enough about your audiences to really see a return on your ad spend is to test. Test different messages, different offers, different audiences. Interrogate the data, learn from it and test again. Over time you will optimise your returns through applying what you’ve learned through the data. This cannot happen instantaneously and it certainly cannot happen on a £300 ad budget!
Ok, give it to me straight. How much are we talking?
I would never endorse running ads for anything less than £20 per ad set per day. Furthermore, I would not advise running ads for anything less than 4 weeks. So, if you were to run ads to, eg two audiences, for 4 weeks, you should be prepared to invest £1,000 in ad spend from the outset. This is billed directly to Facebook.
In addition, you may find you prefer to put this work into the hands of a skilled and experienced professional. Believe me it’s worth it! There are many skilled and dedicated Facebook Ads Managers out there who, like me, thoroughly enjoy reading the data and turning the investment in a brand new campaign into a source of revenue for clients. As with any professional service, prices are likely to differ.
If you’d like to know more about how we work at Red Gem, we’re always happy to jump on a call and talk through ideas and possibilities.