How To Set Up And Maximize Your Facebook Ad Budget

You’re doing it. You see the benefit of investing in Facebook advertising, and you want to make sure your investment in paid social media isn’t a waste of your Facebook ad budget.

You’re in the right place.

A Facebook ad campaign can help you reach your business goals. But a lot of social media marketers prioritize Facebook ads as a pillar of their social media strategy, so it’s more expensive than ever to reach your audience on Facebook. 

You should still do it.

We’ll get you in a good spot with campaign budget optimization so you properly manage advertising costs on Facebook, and evaluate ad performance to spend wisely. 

Before we get into how much you should be spending, though, we’ll walk through how to set a budget in Facebook Ads Manager.

As you set up your ad campaign in Facebook Ads Manager, set a budget for your ads at the campaign or ad set level. 

Choose how you set your budget and bid strategies based on a few important factors like your specific target location and how much you'd like Facebook to manage your ad experience with optimization strategies.

The first option for setting your Facebook ad budget in Ads Manager is at the campaign level. Setting your budget at the campaign level will rely on campaign budget optimization (CBO) to efficiently use your allocated budget based on your selected ad delivery optimizations and bid strategies. 

By using CBO, you essentially create one central Facebook ad budget and rely on Facebook’s algorithm to distribute your money across ad sets to get what it determines to be the best result. The algorithm then distributes more money towards what it considers to be your best Facebook ads, rather than underperforming ad sets. 

CBO is a great option for people who are new to setting up Facebook ad campaigns because it simplifies the process and reduces the number of ads you have to manage manually. It’s also a good choice if you’re flexible with how your budget is spent across ad sets.

If you want to prioritize one particular ad set by spending more money on it, you’ll want to look closely at Facebook’s alternative ad budget option. 

The other option for setting your budget in Ads Manager is at the ad set level. Note that ad sets in Ads Manager share the same settings for how, where and when to run, allowing you to run multiple ad sets at a time. 

If you choose to create individual ad set budgets, you’ll have more control over the delivery and measurement of specific ad sets. Setting an ad set budget is a good option if you have further experience with Ads Manager campaigns, and have the capacity to manage and measure varying ad set metrics using a flexible Facebook ad budget.

It’s also a good option to consider if you have ad sets with varying specifications, like different audience sizes, optimization goals, or bid strategies.

Whether you opt to set a budget at the campaign or choose to set an ad set budget, there are two options available to you when choosing a budget type: daily budgets or lifetime budgets.

While a lifetime Facebook ad budget may be more convenient for those wishing to control spending over a set period, daily budgets allow advertisers to set a target amount for daily spending, providing flexibility with slight fluctuations. 

Both budget types distribute your ad budget in the Facebook auction, which is the process through which the Facebook algorithm shows the most relevant ads to people based on your campaign objective, target demographic, cookies from other companies, and ad placement. (That's how the algorithm is able to show you ads for things you like even if you’re not on the platform much.)

A daily budget is the average amount you plan to spend on an ad set or campaign each day. Note that as the Facebook algorithm aims to optimize your spending for the best opportunities available, Facebook may spend up to 25% over your set daily budget in order to seize the best opportunities available—so it's important to consider your marketing budget before proceeding.  

A lifetime budget is the total amount you’re willing to spend across a whole campaign or ad set. Unlike a daily budget, Facebook won’t charge you any more past your lifetime budget to seek better results. Instead, the Facebook algorithm will work within the budget range that you set for your ad set or campaign, and optimize your ads on the best days available

Choosing a daily or lifetime budget for your ads will determine in what ways you want to give the Facebook algorithm power to bid on your behalf in the Facebook auction. While both budget types will allow Facebook to optimize your ad spend to retrieve the best results for your ads, a daily budget typically results in Facebook charging you more than planned if the algorithm can pull strong results for you. Ultimately, you'll determine if this is a worthwhile option for you based on how your daily budget ad sets performed in the past.

Conversely, a lifetime budget will help you to set the lowest cost possible for your ads, and gives Facebook bounds for how much they control over your budget. It's the best way you can control spending if you're on a tighter budget.

In summary: If you want to keep your ad budget on a metaphorical "leash," maintaining control over the optional optimization charges, go with a lifetime budget type. If you have some wiggle room in your ad budget (or better yet, you can budget for a potential 25% increase in your daily ad spend) go for a daily budget type. 

Now that you know how to set up your budget in Facebook Ads Manager, you’ll want to determine the right budget for your ad campaign so you don’t overspend your ad dollars. 

While there’s no magic number for the amount you should be spending, consider thinking about your goals, as well as your ad spend relative to the scale of your business revenue.

Your advertising budget should typically account for 5-15% of your overall revenue, depending on how much growth you aim to achieve.

Here are a few other considerations you should take as you optimize you'd budget, ad preferences and ad experiences: 

When determining your ad budget, consider factors such as your industry, goals, and audience habits, and what stage of the sales funnel your ads are being seen in. There are plenty of technologies to help provide this information, whether you use Facebook's native estimation tools or chatGPT. 

From there, you can develop a strategy for how you want to distribute your ad budget over campaigns or ad sets. 

As a rule of thumb, you’ll want to distribute more of your ad spend on ads that will boost your revenue. Once you’ve established a target demographic and sizable customer base you can use for retargeting, focus the majority of your budget on both Meta ads and ads off of Meta that are likely to result in conversions. 

When first running ads on Facebook, it’s best to avoid blowing your overall social media budget on the first campaign or two. Instead, start small—either with small-scale campaigns or low-cost ad sets. This helps you to avoid wasting money as you collect preliminary data on how your ads perform. 

Once you do that, you can increase your ad budget over time. This also leads us to our last (and most important) tip...

Test, don’t guess. As you begin to run ads, the key indicator of how much you should be spending and distributing from your ad budget is your metrics. 

In an interview with the SocialMedia Examiner, Facebook ads expert Tara Zirker shared, “If you go into your ads with a testing strategy—no matter your industry—it will resolve at least 80% of your problems. The other 20% are probably just making sure you have the right strategies specific to your niche or industry in terms of what you’re advertising, such as your offer.”

Testing and iteration with Facebook ads go a long way, and Ads Manager has various metrics available for you to analyze and use toward your overall budget strategy. The tool also allows you to track the results that matter most to your campaign health, providing custom column views for easy access.

Here’s a shortlist of metrics you’ll want to keep tabs on when evaluating your ad performance. Use them and review them regularly, as they will also likely determine how you’ll get charged

• Cost-per-click (CPC): This metric breaks down the amount of money you spend for each click on your ad, which Facebook can charge you for depending on your objective.
• Cost per mille (or cost per thousand) (CPM): This refers to the average cost per thousand ad impressions. Depending on your objective, Facebook can charge you based on CPM, calculated as Ad Spend ÷ Total Impressions x 1,000.

• Cost per action (CPA): Depending on your objective, Facebook charges every time someone completes the action you intend people to take when seeing your ad. This indicates how efficient your ad spend is in prompting people to take action based on your ad.
• Cost per result (CPR): Also depending on your objective, Facebook charges you every time someone takes the intended result you choose when seeing your ad. This also indicates how efficient your ad is at yielding conversions based on your intended result.
• Click-through rate (CTR): This refers to the rate at which people click on your ad. A high CTR indicates a strong-performing ad, allowing you to replicate in the future. 
• Conversion rate: This refers to the rate at which your advertising efforts lead to a conversion. A low conversion rate typically flags misalignment between your ad’s content and the landing page your ad takes people to.

Ready to invest in your business through ads? Now that you know how to set up your budget in Facebook Ads Manager, the best practices required to use Meta, and how to determine how much you should be spending on your Facebook ads. We hope you feel ready to take the plunge and get spending.(Looking for extra support? Connect with us today and request a free marketing plan!) 

Remember: You don’t need to shell out the big bucks on online interest based ads right away. In fact, it’s better to start small and grow as you figure out what the Facebook advertising game is all about. Feel free to take the space to build experience in Accounts Center, or to experiment with background image-based ads. There's no wrong way to experiment.

Get ready to grow your audience and join the 93% of social media marketers using paid Facebook ads to help reach their revenue goals. Also, be sure to follow more of KlientBoost’s tips to make sure your Facebook ads are a success.

The general recommendation is that budgets allow for meaningful reach and testing. For businesses new to Facebook, advertising starting at $500 to $500 per month is reasonable.

While some may say $5 per day is "enough" for Facebook ads, it's not entirely true. It can be enough to launch an ad, but it's not considered best practice as it'll likely limit reach and conversion potential. Start off with a higher base amount when possible, such as $15 or $20 per day. 

The average cost associated with Facebook advertising depends on several factors, including the type of ad you are running, the industry and locations you are targeting, and seasonality. We recommend using Facebook's ad budget tool to estimate how far your budget will go before you make final decisions regarding your ad strategy.