How Much to Spend on Facebook Ads – A Guide for Small Businesses

How Much to Spend on Facebook Ads - A Guide for Small Businesses

The times are changing, and so should our marketing strategies. But despite popular belief, advertising on Facebook shouldn’t be ruled out. And with that in the works, knowing how much to spend on Facebook ads remains essential, especially for a small business. 

What is a good budget for Facebook ads? Well, for those new to this marketing strategy, starting with a daily budget of $10 to $20 can be effective. This should be done over a period of at least one week, ideally several weeks, which will help you better understand what works best. With these insights, you will be able to make necessary tweaks and optimize the performance of your adverts. 

What Are Facebook Ads?

While digital marketing trends are always changing, there’s one common thread – getting traffic from social media. But compared to the power of TikTok algorithms, should Facebook still be in the picture

Well, with around 2.9 billion active users, Facebook is still at the top of social media platforms worldwide. This number, which translates to roughly 35% of the world’s population, clearly outlines that the mother of all social networks is still at the top. Therefore, it remains a fruitful platform to market your business, especially when used in combination with other social and pay-per-click (PPC) strategies

How Does Pay-Per-Click Advertising Work?

Facebook offers a pay-per-click (PPC) advertising platform. It’s fairly simple and just what it sounds like – you pay when a user clicks on your ad. This is very different from traditional advertising, where you need to pay regardless of engagement or performance. Here, every click counts, quite literally.

A keyboard button with Pay Per Click written on it
With Facebook PPC advertising, you will be paying for genuine engagement

Facebook Ad Sets vs. Campaigns – What’s the Difference?

The journey of Facebook Ads starts with creating a Meta Ads Manager Account. Here, you’ll be able to structure and manage your campaigns, no matter if your objective is to get people to your website or buy a particular product. 

But to use the Ads Manager Account effectively, you need to understand the key differences between ad sets and campaigns. An ad set is a group of advertisements that have the same settings – meaning they are running the same way. A campaign consists of multiple sets that aim to accomplish a single goal. 

To put it simply – campaigns contain one or more ad sets, while ad sets contain one or more advertisements. Let’s outline a few important distinctions between the two:

StrategyAd SetsAd Campaigns
PurposeTo group individual ads targeted at different audiences within a single campaignTo achieve specific brand objectives with a series of advertisements
Targeting Allows for targeting based on interests, demographics, and other aspectsAllows for different sets to have different targeting criteria
BudgetingThe budget can be managed separately for each setThe overall budget entails all sets and advertisements
UsageGreat for running multiple advertisements with varying targeting criteriaUseful when a specific, overarching goal needs to be met, such as increasing brand awareness

The Secrets Behind the Numbers – How Does Facebook Ad Pricing Work?

At the core of Facebook advertising lies an auction-style format. You need to set a marketing budget, settling on the maximum amount you’re willing to pay, either on a daily basis or for the entire campaign. Your ads will then enter a bidding war for visibility, competing for their 15 minutes of fame, per se. This will last until the set budget is spent.

This competition will be based on the budget you’ve set and the ads’ performance, with the system itself determining where they appear and under what price tag. You will pay only for the actual interactions – that’s the beauty of pay-per-click advertising. You have the option between prepaid funds, which will load money into the account beforehand, or automatic billing, which will charge you once the set amount is reached. 

A person logging into Facebook on their mobile phone
This platform uses an auction-like system to determine how much you’ll be paying

How Much to Spend on Facebook Ads as a Small Business?

For many small businesses, figuring out the marketing budget involves plenty of head-scratching. After all, this should be done by taking numerous factors into account, from your overarching goal to the market your business belongs to. 

For those working with limited budgets, it’s best to start with a modest budget and gradually increase it as you figure out what works and what doesn’t. A general rule of thumb is to invest 5% to 10% of the profit into your marketing campaign, but let’s get a bit more into the details and uncover the numbers behind this equation. 

What Is the Minimum Budget for Facebook Ads?

The cost of Facebook advertising is measured in costs per mille (CPM). This is the cost you pay for a thousand impressions on your ad. According to Revealbot data, the average CPM is around $9.88, while the average CPC is around 68¢. 

For campaigns that use the CPM as the baseline metric, the minimum amount for Facebook advertising is $1 per day. On the other hand, campaigns that have other goals, including clicks, views, and likes, are looking at a minimum of $5 each day. So, there’s no single answer to this question – it’s all about creating a strategy that works best with your particular goals and budget. If the head-scratching has already started, know that working with a professional SEO marketing agency can remove a lot of confusion from the whole equation. 

A person holding a tablet with analytics
 It’s best to start small and adjust your strategy as you go

What Is a Good Daily Budget for Facebook Ads?

As we’ve already mentioned, there’s no one-size-fits-all scenario. You can pay as much as you want, and this flexibility can be both convenient and confusing at the same time. For most small businesses, it’s best to start on the small side and adjust as you go. 

We recommend setting aside $10 to $20 each day and running the ad set or campaign for at least one week, ideally, a whole month if you have the funds for it. It’s about long-term growth, not overnight success – this should act as a trial period, especially if it’s your first time running Facebook ads. 

How to Use This Trial Period for Building Your Campaign

This trial period should be built on a level playing field by assigning the same budget to each and every ad set. After a few weeks, you’ll have enough data to figure out which ads are performing the best and adjust your budget accordingly. A professional SEO agency can help you build this strategy in the most efficient way, all while combining PPC and SEO together to create some marketing magic. 

A map of a marketing strategy
Unsure about the best approach for your business? There are agencies that can help

What Are the Main Factors That Affect the Facebook Ad Cost?

The exact costs associated with your Facebook campaign depend on so many different factors. Besides the obvious ones like the industry you’re working in and the competition you’ll be working against, there are plenty of other aspects that can influence what you end up paying. Here are some of them:

Time of the Year

More often than not, the early part of the year is easier on the wallet, as fewer people tend to advertise on Facebook at this time. The costs usually spike during the shopping season, including Black Friday, Cyber Monday, and Christmas. On top of that, the costs can vary throughout the day, being generally lower during the early hours of the day, up until 6 am.

Target Audience

The backbone of every good marketing campaign is the definition of its target audience. This includes demographics, buyer personas, disposable incomes, and much more. How clearly you need to define your target audience will depend on your ultimate goals. If you’re not sure about how to approach this, hiring a digital advertising agency is a great way to build the best strategy for your business. 

It’s simple – with a relevant advert, your target audience will be more likely to engage or click on it. However, this results in increased competition, so having a specified target audience can often increase the expenses of your marketing efforts. 

Advertising Objective

Besides the target audience, setting a clear advertising objective is crucial, and it will also significantly influence your budget. These objectives span several categories such as Lead Generation, Reach, Conversions, and Impressions. Each of these categories has its own CPC costs, which will, obviously, influence your overall advertising expenses.

Quality Score

The quality, engagement levels, and conversion rankings of your adverts will determine the quality score. The higher this score is, the cheaper the CPM will be. So, it literally pays to have a good creative team, quality imagery or video, as well as an optimized, fast-loading website. Here, an experienced content marketing agency can be a literal saving grace. 

Overall Engagement

If your adverts receive constant positive engagement from users, they can start costing less over time. This is because Facebook wants to create a positive experience overall, and one of the ways to do that is to increase the CPM for ads that are low quality. All in all, you should always focus on creating a positive journey for your customers, and you’ll get not only better traffic but also reduced costs for your marketing campaign. 

Focus on Improving Your Strategy and You’ll Be Seeing Great Results

There’s an overarching theme when it comes to the factors that influence the cost of Facebook advertising – quality. Positive engagement is celebrated, so the better your offer is, the cheaper your expenses will be over time, even if your competitors are paying more. This is why you should work on improving the overall customer experience by:

  • Enhance your website with the help of a website design agency, 
  • Work on improving the speed of your website
  • Optimize the format of your creative, 
  • Create diverse content that works in both portrait and landscape, 
  • Implement videos in your adverts for better performance, 
  • Always look back on data to adjust your strategy, 
  • Remove adverts that don’t generate good results. 

You Should Always Diversify Your Marketing Efforts

Even with the potential to reach millions of people, Facebook advertising can only do so much. The key to digital marketing is to transform your online presence in more ways than one. Google Ads, Instagram, and Facebook – pay-per-click advertising is a great start. However, bringing in a website development agency with the added benefit of SEO marketing services can bring your business to a whole new level. Only by growing your strategy will you be able to grow your business as well. 

 A person getting likes from Facebook on their mobile phone
The most effective approach is to diversify your strategy

Let the Best SEO Agency Run Campaigns for You and Bring Your Small Business to New Heights

If there’s one thing you should take away from our Facebook pricing overview, it’s the fact that it doesn’t matter what you start with. The golden ticket lies in how you optimize the journey, making tweaks as you go. One of these adjustments should definitely be implementing SEO into your strategies, creating organic growth that will help you reach all of your goals. Contact us at Made Online – our experienced SEO services agency can help your business reach new heights in the digital landscape. 

Share this post with your friends

Slide in our DMs

Slide in our DMs

Slide in our DMs