What should a small business spend on Facebook ads?
From using relevant KPIs to define a realistic budget to starting small with $3-$4 per day, here are the 12 answers to the question, “How much should a small business spend on Facebook ads?”
- Use Relevant KPIs to Define a Realistic Budget
- Start With a Less Than $20 Daily Budget.
- Between $20 and $200 Daily
- 6% of the Revenue
- $5k Minimum Monthy Ad Spend
- It Depends On the Business Acquisition Channel
- B2b Businesses May Budget (at Least) $1k Monthly
- $400-$1,000 a Month
- 5-10% of the Profit Or $10-20 Per Day
- Start at $1-$3 Per Day
- $50 Per Day
- No more Than $3-$4 Dollars a Day to Start
Use Relevant KPIs to Define a Realistic Budget
Use your business’s most relevant KPIs to help define a realistic budget for your business’s specific circumstances. It’s important to consider how much you can afford to spend and the expected return on investment from your Facebook ads.
Generally speaking, we would recommend starting with a budget of around 5-10% of your total marketing budget for an initial campaign. This will give you enough data to start making informed decisions about which ad types are most effective in delivering customers.
As you become more familiar with the platform and your campaigns, you can then adjust your budget accordingly.
Start With a Less Than $20 Daily Budget
I always just suggest a number that will serve as a fantastic starting point for any business that is just starting out with Facebook ads and marketing. Starting with this number, you can make adjustments based on the outcomes of your test campaigns.
I advise starting with a $20 daily budget and running 15 ad sets for a week. You should expect to spend about $1000 on this setup. It’s critical to keep in mind that this $1,000 is more of an investment than anything else because it will provide you with the knowledge you need to launch an effective, economical Facebook campaign.
To start each of your ad sets, budget roughly $20 per day. A fair playing field in terms of metrics and success will be provided by allocating the same budget to all of your ad sets. It’s time to determine which ad sets generated the most clicks and interactions once your advertising budget for each one has run out.
By examining how your ad sets performed, you can learn a lot of valuable information from them.
Between $20 and $200 Daily
A small business should generally spend between $20 and $200 daily on Facebook ads. Within this range, companies can expect to see different levels of results. Typically, those who spend more will see better returns, while those who spend less may see worse results.That said, it’s important to note that these numbers are just averages – some businesses may succeed by spending more or less than this amount. The most important thing is to test and track different ad campaigns to determine what works best for your business.
6% of the Revenue
For a lot of small business owners, figuring out how much to spend on Facebook ads is a struggle. In reality, it’s not challenging since they can cost up to a dollar a day for an ad.
Facebook ads are convenient since they offer options for deciding how much you want to spend. Facebook then takes the amount you’ve settled on and curates an ad worth spending for the best results possible. Investing about 6% of your revenue in ads is sustainable and advisable.
Investing this amount in ads is sure to have a high ROI since the time and knowledge barriers to entry are shallow, and it does not require one to have expertise in Facebook advertising to begin.
Starting on a low-investment daily budget allows you to gauge which ads are most effective, and these results can be used to adjust your budget later based on necessity.
$5k Minimum Monthy Ad Spend
We have found that $5k is the monthly minimum we recommend for ad spend for Meta ads (Facebook & Instagram).
Less than $5k in monthly ad spend for less than 2 months and you risk not giving the Facebook pixel enough data to get traction.
For Meta ads to be effective you need to begin with a broad audience and it takes some time to find the right audience that will convert.
It Depends On the Business Acquisition Channel
It depends on the acquisition channel. If you do performance marketing, then you should probably spend a high percentage of your budget in Facebook Ads.
If you do not acquire leads with performance marketing, then you can spend a lower budget to promote your brand. That budget should not have an ROI expectation.
If you’d like to test whether you can acquire customers with Facebook Ads profitably, $5k to $10k might be enough to start. Once you have the ability to track leads and revenue, then you can increase the budget. You don’t want to burn money on Facebook Ads.
It’s important to keep the budget at a sustainable level, track the data, and then optimize the budget for the best ROI.
B2B Businesses May Budget (at Least) $1k Monthly
It largely depends on your targeted audience. If you are a small B2B business targeting senior decision-makers, you should expect way longer Facebook ad funnels and more intensive retargeting before you generate sales.Whereas a small B2C can see results with a $200 Facebook ad targeted at a cold audience, it is improbable to get direct results (in terms of sales) for a B2B business.
This is not unnatural. As a B2B business running ads on Facebook, you are targeting way fewer spontaneous buyers. These are objective prospects with a mountain of skepticism to overcome before buying.So first, you will run awareness ads to inform them about you, consideration ads to get them to visit your websites, and then create a custom audience to target with conversion ads that would get you leads. If you add all these together, you could spend $1000 or more monthly. This may not include the cost of your marketing creatives.
$400-$1,000 a Month
A small business should typically spend between $400-$1,000 a month on Facebook ads. This will help target the right demographic and figure out your customer acquisition cost.
Once you have figured that out, increasing the budget spend can be determined by the results. If more customers are coming in due to the ads, double down on the ad that works to increase sales.
5-10% of the Profit Or $10-20 Per Day
The amount a small business should invest in Facebook ads varies depending on your goals, financial condition, and the market your company operates in. A large amount for some may seem ridiculously small to others.
For small businesses with limited budgets, starting with a small budget is generally recommended and gradually increasing it over time as you learn more about what works and what doesn’t. But in general, 5-10% of the profit is an entry threshold to implementing an effective Facebook marketing campaign. It will certainly not be too much, yet it may be too little.
Focusing on money, not percentages, a good rule of thumb is to start with a budget of at least $10-20 per day and adjust as needed based on the performance of your ads. After the first few weeks, summarize your activities’ effects and adjust the budget based on the results. Allow your Facebook ads budget to be flexible.
Start at $1-$3 Per Day
Most businesses consider Facebook the best platform for their product marketing because of various reasons. But how much should you spend on it?
It depends on three factors.
1. Average cost-per-purchase of your products
2. Total advertising budget
3. Risk tolerance power of your company
Since we are talking about small business, so don’t consider the risk tolerance. You need to put your best foot forward so that you don’t have to face loss. You can start facebook ads from $1 per day. It would be a safe play. Later move to $3 per day for some of your marketing campaigns.Well, the industry aspects also matter when you are starting off the marketing campaigns. You can allocate 4-10% of your revenue to your marketing campaigns. If you gain confidence in tolerating risk, increase the amount.
$50 Per Day
The biggest mistake I see small businesses making with their initial ad investment is stretching their budget over too many campaigns or too many days to prove out success. There are two tests you can run that will help you quickly identify if your offer and audience will convert. I suggest spending at least $50/day and optimizing for a lower-level conversion event you are confident will exceed the 50 events/7-day performance rule. Example: – Monthly budget of $3000 (~$100/day) – Cost per Purchase is expected to be $125
Test 1: Shortened Run Time Run a two-week campaign to start and optimized for your highest conversion event. This allows you to have a larger daily budget ($200/day compared to $100 for a month) and to more quickly understand how this campaign can perform
Test 2: Lower Level Optimization Event Shift your optimization event from Purchase to Add to Cart or another lower level conversion event that is cheaper and more likely to get 50 conversion events in 7 days
No more Than $3-$4 Dollars a Day to Start
Start your Facebook Ad spending on the small side. Your expenditures should be no more than 3 to 4 dollars a day at maximum, though you can go as low as a dollar if you’re inclined. Consider this period as an effective trial period, especially if this is one of your first Facebook ad campaigns.
During this period you’ll want to study your data and find out which of your ads are getting the most traction. You can add more funding to bolster the ads that are doing best. This should help to optimize the efficiency of your campaign and make it less likely that you’ll be losing money on your efforts.
Remember, you can always add more money to your efforts, there’s no need to start off with huge expenditures. Gather your data and adjust as needed.
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