Facebook’s pay-per-click advertising system can be overwhelming when you’re first starting. If you’re not sure how much to invest, navigating the maze of terms and metrics can feel like taking a statistics exam without taking lessons.

Understanding the factors that influence ad costs and discovering strategies to maximize the efficiency of your spend will ensure you reach your ideal audience without breaking the bank.

How Much Should I Spend on Facebook Ads?

There are two questions we hear often: “How much should I spend on Facebook ads?” and “How much to spend on Facebook ads per day?” As with many marketing challenges, the answer isn’t straightforward. Your Facebook ad spend hinges on a wide variety of factors, from your campaign goals to the audience you’re trying to reach. 

The good news is that it’s quite easy to learn the fundamentals—enough that you’ll be able to determine a suitable budget on your own. Once you’ve mastered the entry level, you’ll be ready to optimize your ads for better results and lower costs.

Facebook Ad Costs: The Basics

Like many online advertising platforms, Facebook ads work on a pay-per-click (PPC) system. Advertisers bid on ad placement, with top spenders typically getting priority. However, the amount they spend isn’t the only factor that determines whose ad gets displayed. Each time an ad appears, Facebook looks for the best audience-to-advertisement match among top bidders. 

The CPC (cost per click) can end up lower if your ads are perfectly crafted for a particular type of user. By creating more relevant and high-quality ads for a specific audience, you can spend less and reach more ideal customers for your business. Even so, try not to tweak your ads until Facebook’s learning algorithm has broken through its learning phase. 

The Meta ads delivery system can automatically optimize how your ads are delivered, but only if you allow it to gather enough information. That means 50 optimization events in a week. Because you set the goals, these could be one of several user actions, like link clicks within an ad set.

Whether you’re working with a shoestring budget or a multi-million dollar allowance, strategic allocation is the bedrock of smart advertising. As you’ll learn in the following sections, even a modest budget can yield meaningful results if you target effectively. However, for wider reach and stronger impact, you’ll need to spend more.

Factors Driving Facebook Ad Costs

All ad campaigns are unique, and many elements can influence their costs. These factors include:

• Ad Budget & Bid: Your maximum spend determines how competitive your bid is. You can budget for each campaign or ad set, each day, and the ad’s lifetime.
• Audience: The specificity and size of your audience can shape placement. If you target a sought-after audience, your costs will go up. Custom audiences, which can drill down into smaller segments, will cost less.
• Objective: Your goals could be one of six simplified objectives in Meta’s new Ad Manager. Different goals will try to achieve several outcomes, from increasing awareness to generating leads.
• Ad Quality & Relevance: How well your ad resonates with your audience matters. Facebook scores every ad that receives more than 500 impressions. The higher the score, the less your ads will cost.
• Placement: Where your ad actually shows up (News Feed, Right Column, Marketplace, etc.). Placing your ad in one location can be more or less costly than another, so Facebook recommends using Advantage+ placements for maximum efficiency.
• Industry & Season: Some markets are especially competitive during certain times of the year; ad costs will vary depending on demand.
• Location & Time: Costs can fluctuate depending on the time of day and the geographic location of your audience.

Impact of Facebook Ads Based on Your Budget

If you’ve absorbed everything above, you’ll know that there’s no one-size-fits-all answer to the question, “How much should I spend?” On Facebook ads, determining the right budget is a case-by-case, strategic decision. However, there are a few standards for how much to spend on Facebook ads per day that can apply to any business.

Let’s imagine you’re trying to spend as little as possible. Surprisingly, even spending a tiny amount on Facebook can yield significant results. Today, the average cost per thousand impressions (CPM) is $10.81. Now let’s suppose you only want to spend $1 per day. To determine how many impressions we’ll get on average, we need to use this formula:

(Daily budget X 1000) / CPM = Impressions per day

With our numbers plugged in, it looks like this:

($1 X 1000) / $10.81 = Impressions per day

1000 / 10.81 = 92.51

So, with only one dollar, you’re netting more than 90 impressions daily. That’s 33,765 impressions every year! To maximize the usefulness of minimal spend, aim as far down in the funnel as possible and leverage retargeting. For tiny budgets, go for former customers. As your budget increases, target those who added items to their cart but didn’t purchase, then page visitors who didn’t add to their carts.

Of course, this is rock-bottom spend, and it doesn’t give you the benefit of Facebook’s powerful ad delivery algorithm or the performance metrics to judge your ad campaign’s effectiveness. To get the algorithm on your side, you’ll have to spend a bit more to crest the 50 optimization events threshold. 

Similarly, if you’re dialing in how much to spend on Facebook ads per day, starting with the bare minimum won’t provide valuable data. To get the most information quickly, you’ll want to spend more at the beginning of the month and taper your budget after you have better data. The reason for this is simple: spending a little money on ineffective ads over a long period of time isn’t efficient; instead, it’s much better to weed out issues at the start—even if it means spending a bit more off the bat. 

In a typical scenario, each ad set should begin with a minimum of $20/day for at least a few days, resulting in a total ad spend of $100-200/day (i.e. for a $2000/mo budget) to get the ball rolling. This approach ensures a good number of impressions per person while gathering initial performance metrics for the ad set. Then, you remove any underperforming ads and lower the budget to satisfy your spending parameters for the rest of the month.

The length of the testing period is also a critical element in early spending, and it depends heavily on the average order value. If your business sells a product like furniture, you might be able to spend more during testing because the returns will be better per sale. Another factor is that customers purchase higher-priced items with more thought, meaning they buy them less often. A brand that sells a lower-priced item that customers don’t put as much thought into, like phone cases, won’t see as much of a return on each sale.

Finally, if you feel like your ad spend is starting to plateau in effectiveness, it might be time to jump into manual optimization. At this point, you’ll want to begin tweaking your creatives and refining audience segmentation to achieve a lower cost.

Reducing Facebook Ad Costs

There are a vast number of ways to lower your Facebook ad costs: refining your objectives, honing in on your audience, and using A/B testing to create that pixel-perfect visual. However, the tactics that will give you the most efficient results will be unique to your business. 

Reducing the amount you spend on Facebook ads is a comprehensive process, but it’s not a challenge you have to face alone! The next time you ask yourself, “How much should I spend on Facebook ads?” consider partnering with seasoned experts who can guide you toward lower costs and better outcomes. 

At Social Ktchn, we blend Facebook and Instagram expertise, creative insight, and technical knowledge to help businesses like yours achieve unparalleled results. Let’s create campaigns that turn your ad spend into tangible results.