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How to Set Your Facebook Ad Budget In 7 Easy Steps

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You need to set a Facebook marketing budget and set a timeline to achieve your goals. Whether you have experience in the digital marketing or you are entirely new to the industry, setting budgets for Facebook ads can look like a guessing game. You don't want to spend a lot of money without getting the desired results. 

Here is a list of seven easy steps you need to follow to set a budget for your next Facebook ad campaign. 




1. Goals 

First, you must define the goals you want to achieve with your Facebook ads. 



- Brand Awareness

Facebook Ads can prove to be very useful for brand awareness. You can reach your target audience, find potential customers and spread the word about your brand. Facebook announced 'Brand Awareness Ads' in 2015. These ads are designed to create long-lasting impressions in the minds of your target audience. 




- Product Launch

Do you want to make announcements about your latest product or service you are about to launch? You can spread the word before launching your product and keep the excitement going with Facebook Ads. You can use them to place your product in front of the right audience using the advanced targeting options. 




- Engagement

You can also use Facebook ads for driving the targeted traffic to your page. You don't just want your audience to look at your ads, but also like, comment and share information related to your brand. Engagement is critical throughout the customer lifecycle, but it is of particular importance during the branding and reputation management phase. 


- Actions

Facebook ads give your audience an option to fill forms right in the news feed without going to a landing page. Facebook's Lead Form Submissions is a great tool for lead generation. 


- Target Revenue

The ultimate goal is to generate revenue and earn profits. You must allocate a budget while keeping the revenue in mind. You must ensure that you don't overspend on the ads. Facebook ads should not cost so high that instead of earning profits, you incur losses due to your advertising efforts. 


Once you have your goals set, you need to decide how long will your campaigns last. 



2. Preparations

You must plan well in advance and decide what type of launch material you will use in your ad campaigns. They can greatly vary according to your products or services. You should design several versions of the images you want to use. If you want to educate your target audience about your products, technology, etc., you should prepare White Papers, eBooks, and other educational content. Webinars or live events are some other great options for spreading awareness and educating the audience. 

You should decide early if you will run any Facebook contests, offer discounts to the first customers or have an affiliate program in place. If you make these preparations a few months before you run your ad campaigns, you will find your campaigns to be much more effective. 




3. Length Of The Campaign

Facebook gives two options for campaign budget length, lifetime budget, and daily budget. The daily budget needs on-going management, and you cannot choose the time or the day you want to show your ads. With a lifetime budget, you can set a starting and an ending date besides the amount you want to spend on the campaign. 

You can decide the length of your campaigns according to the goals you want to achieve. For remarketing purposes, long campaigns that last for months work well. For special events or announcements, campaigns that last less than a month are good enough. 


- Audience Size

The cost and length of your ad campaigns are heavily influenced by the size of your targeted audience. After you allocate a budget, audience selection determines the cost per action for you. A smaller and well-targeted audience leads to a higher cost per action but results in relevant people taking the desired action. You must set budgets for your campaigns while keeping in mind the amount you are ready to spend for the desired action. 


- Refined Targeting

You can start by choosing the target audience's location, age, language, and gender. After that, you can set the demographics, behavior, and interests to refine your targeting. If you still want to refine your targeting further, you can do that by targeting the people who like your page or their friends. 





4. Competition

On Facebook, you do not pay for the ads, but you bid for the ad space. To keep the user experience good, Facebook puts a limit on the number of ads a user sees. There are limited opportunities to show your ads to a person. You don't necessarily compete with the people in your industry, but anybody from any industry who is competing for the attention of your targeted audience. 

Bidding higher can increase the effectiveness of your ads, but make sure that you keep the total costs and profits in mind so that you don't overspend. 




5. Setting A Budget

It is better to start small as you can always increase your budget later if you need. With Facebook ads, 'Frequency' is the key indicator that helps you in setting your ad budget. Frequency is nothing, but the average number of times your ad is served to the user. If your 'Frequency' is less than three, probably you should consider increasing your budget to make your ads more useful. If it is above five, consider widening your audience or ending the campaign soon. If the frequency is four or five, and you are getting the desired results without costing more than it should than you are on the right track. 




6. Custom Conversion To Track ROI

Configure the Facebook Ads Manager to show you the required data. 

- Install and set up your Facebook Pixel to track conversions and provide ROI. 
- After that, you will need to customize the 'Custom Conversion' in 'Facebook Ads Manager.' 
- Click 'Create Custom Conversion' and add the URL of the 'Thank-You Page.' 
- Select 'Lead' as the 'Category' and click 'Next.' 
- Enter the name of your 'Conversion' and click 'Create.' 

Now, whenever people view the 'Thank-You Page,' Facebook will record the lead. 



7. Monitoring Throughout The Campaign

After you run your ad for some time, Facebook will gather the conversion data. Go to the 'Ads Manager' and look at the costs. Configure the columns to see custom conversions. You will be able to track the generation of leads and the average cost for generating a lead. 


You can make adjustments to the campaign budget and refine targeting, widen or narrow down the target and make changes to the campaign. Ultimately, you must aim to keep the cost of generating the leads not to kill your profit margins. However, you want your ad campaigns to be effective and want your brand to grow. That's why need to monitor campaigns continuously and experiment to get the best results. 




To Sum Up

Base your Facebook Ad Budget on the bottom line, your profits. You need a logical and mathematical approach because you want to measure the results quantitatively. Every dollar counts and you have to ensure that you don't overspend to make your ad campaigns effective. However, you don't want to limit your budget in such a way that you never get the results you desire as well.