One of the great things about Facebook Ads is that it is entirely flexible in terms of your budget. You can set not only how much you are willing to spend per day but also how much you are willing to spend on any single click on your ads.
Every business can afford Facebook’s affordable ads, for as little as $1 a day. Honestly, if you cannot afford to spend at least $30 a day on promote on Facebook, you should not be in business at all.
There are so many ways to get Facebook Ads to work for you. Determining your goal with running an ad is your first step.
- Do you want to increase brand awareness,
- Would you want to focus on page likes,
- Do you want to increase sales?
Each goal objective will have a different advertising cost. However, when you apply your marketing strategy to what you want, you will get more out of Facebook advertising.
But while this flexibility is good news when it comes to finding the right audience, it also adds to the challenge somewhat as now you’re going to have to decide how much you should be spending on your ads – with such freedom, there’s a whole lot more to think about!
How do you calculate this and ensure you get it right?
It is time to work out your conversion rate and profits!
The first thing to do is to calculate what your precise profit is each time you turn a visitor into a customer. What are your overheads on each product (your ‘cost of goods sold’) and what is your asking price?
Next, ask yourself what your conversion rate is. For every 1,000 people who visit your website, how many people buy a product? It might be one, it might be .01 or it might be 50. Whatever the case, this will now allow you to work out how much each visitor is worth to you.
Therefore, if you have 1,000 visitors and two of them earn you $30, you are making $60 per 1,000 visits. That means that your visitors are worth 6cents each to you. That in turn means that you can afford to pay 6 cents per click and guarantee you will breakeven. If you pay 5 cents per click, you should be on your way to making a profit.
Things to Consider With How Much Should You Spend On Your Facebook Ads
- First, you need to consider what your ‘customer lifetime value’ is (CLV). In other words, some customers might order or book your services more than once and that means you can afford to pay a little more.
- Another important thing to consider is your cash flow – You need to set aside a marketing budget in order to experiment with things like audience targeting until you get the perfect conversion rate.
- Lastly, are you generating perfect looking ads that convert – Are they visually appealing to your target audience?
Onwards to growing your business
If, you have determined the goal objective for your Facebook ads, set aside a marketing budget, and created eye-catching ad sets. Then you are ready for the most important step of all: A/B testing ad analysis!
Running ad tests is incredibly important, but many businesses do not do it because they think it is a waste of money. The truth is, ad testing actually saves businesses money. By testing, you will be able to determine the best message, audience, and creative for your ads to drive profits.
Looking for help with your Facebook strategy? We can help. The Web Silo Online Marketing is a leading Facebook Ads Expert and social media-marketing agency? Contact us today.
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