What Should Your Facebook Ad Budget Be?

What Should Your Facebook Ad Budget Be?

This is one of the most common questions I get asked.


Here is the formula to work out your optimal budget 


First off. There is no ideal budget. If you are just getting started, ask yourself how much would you be willing to spend without any return. Pick that and run with it. Look at your initial ad spend as an investment in the development of your skills.


If you have experience, we can get more specific. We are going to base our calculations on the cost to exit learning. This is a hotly disputed topic. Facebook says it is essential, but I have lots of campaigns running profitably in learning. It gives us a target, however.


Why is exiting learning important? Facebook states, when you exit learning, your cost per action will decrease. This is a good thing. The Facebook logic is once they know who you are looking for, they can find more people just like them. 


How do you exit learning? Facebook states that once you receive 50 of your chosen events in 7 days, you will exit learning. If you are running a lead gen campaign, it’s 50 leads if you are running a sales campaign, it’s 50 sales. I’ve campaigns exit learning before 50 events. 


So what’s the budget formula? So if you know your CPL or your CPA, the formula for your minimum daily budget is (target CPL/CPA X 50)/7), for example, if your target CPL is $2.50 then ($2.50 * 50)/7 = $17.85.


If you are unsure of your target CPL or CPA, make a best estimate or use an industry standard. The only thing you can be guaranteed is that you won’t be bang on, so if in doubt, stick to a daily budget you are happy with even if you don’t see the result you want immediately.