How to Set Your Facebook Ads Budget

Dollar A lot of people ask how much they should spend on Facebook Ads.  Of course, it always depends on a whole host of factors.  But I’m going to walk you through some example scenarios along with some of my recommendations.

The first thing you need to know is what percentage of your budget you are spending on marketing and advertising.  The Small Business Administration suggests that for small businesses (under $5 Million in revenue) you allocate 7-8 % of their revenues to marketing.  You may want to adjust this figure depending on if you are launching a product or just starting your business.

So let’s look at the example of a small business making $100,000 in revenue.  I work with a lot of solo-preneurs and the budget question is often coming from them.

Marketing Budget Example

Revenue:  $100,000
Total Marketing Budget:  8% = $8000
Advertising Budget:  50% of total Marketing = $4000
Facebook Advertising:  25% of total Advertising = $1000

This is just an example and your business may be totally different as far as where you need to spend your money.  But it’s a place to start.  Personally, my business focuses more online (and of course more on Facebook) so I typically allocate 75% or more of my advertising budget to Facebook ads.

So now, in this example, you have $83/month to spend on Facebook ads.

What Types of Facebook Ads to Run

Now you need to determine what types of ads you should be running regularly on Facebook.  Again, this may depend on if you are promoting a product or if you have a marketing initiative in a particular month.  But I suggest that most of your budget should go to driving people to opt in to your e-mail list.

We have all heard that Facebook is showing Pages less in the News Feed.  So how should we react to this as marketers?  Use Facebook ads to find your perfect client and drive them to something you own – your e-mail list.  I also have some other suggestions about what to do about the decrease in organic reach.

The reason you should spend most of your budget on optins is that selling straight from Facebook can be more challenging.  People aren’t on Facebook looking for something to buy necessarily.  Free things convert better.  Once you have them on your e-mail list, you will then use your e-mail list to connect with them and deliver value before asking for the sale.

Here is my suggested budget for the type of Facebook ad you can run.

Facebook Advertising Budget

You always want to make sure you are running the right Facebook Ads to match your goal.

What do you think?  Does this match how you run Facebook ads?  Let me know in the comments below!

And if you’d like to know more about Facebook Ads, I have a brand new course available called Facebook Advertising Secrets.  It’s extremely affordable and when you are done, you will know exactly how to make the most of Facebook ads for yourself or for your clients.  Hope to see you there!

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About Andrea Vahl

Andrea Vahl is a Social Media Coach, Speaker and Strategist. She is a co-author of Facebook Marketing All-in-One for Dummies. She also sometimes likes to wear wigs.

  • Evan

    We place ads to get conversion on our webpage. In this case it is application leads. We have installed the FB tracking pixel on to the conversion page of our application. We can then track how many leads we get coming from FB. It also is connected through out FB page and drives site to our website. This could also be done using a newsletter signup.

  • LoriGama1

    Thank you, Andrea. The timing of your post is really good for me. You are such an expert and I love how your wisdom is practical. I like that. This was really helpful. Thanks!

  • http://www.SelfEmployedKing.com/ Mike Kawula

    Great Post Andrea and love the % breakdowns as a guide! Love the SBA stat also, hadn’t seen that one!

  • http://www.AndreaVahl.com/ Andrea Vahl

    Yes – nice to have a benchmark. The SBA has some great articles.

  • http://www.AndreaVahl.com/ Andrea Vahl

    You are so welcome Lori!

  • http://www.AndreaVahl.com/ Andrea Vahl

    Great way to use ads for sure Evan! That’s my favorite way to run them.