How to Calculate your Facebook Ad Budget

mary-donne-facebook-ads-yorkshire
Pic Credit: Fabian Blank @ Unsplash

First, decide what your goal is!

This is so obvious (“I want to sell my stuff!”) that people often simply ignore it!

  • Lead generation
  • Engagement
  • Conversions
  • Video Views
  • Event RSVPs

Next, we work backwards.

So, if you want to sell 10 products, you need to think about how many leads this will take. When we talk about Facebook leads, we’re talking about people who engage with your ad and click the ‘find out more’ button because they’re interested in your product. If you’ve never done online advertising before this can be difficult to gauge. You could think about how many people you might have spoken to at a networking event before one said, ‘yes, I’m interested’. Maybe one in every 20 people wanted to hear more from you, so in that case your average was 5%.

Now you need to calculate your audience size.

So, if we want to generate 10 products sales, based on a (let’s say) 10% conversion rate, we need to have 1,000 leads.

How big of a Facebook audience do I need to gather leads?

For Facebook, there are several variables such as:

  • How many of your target audience will be on Facebook each day?
  • What if Facebook serves my ads to my audience but they either don’t see it?
  • Ad frequency (how often will my ad be served up?)
  • How likely is it that Facebook will serve the ad to your target audience?

So, to recap:

  1. Decide your tangible goal in numbers (how many conversions do you wish to achieve?)
  2. Work out how many leads you need to generate to get to this figure.
  3. How much do you usually/are you prepared to pay per lead?
  4. Multiply (3) x (2)
  5. Think about how likely it is that your target audience will see the ad (basically, how often are they on Facebook?)
  6. On this basis decide how many days you will leave your ads running.
  7. Multiply (4) x (6)
  8. You should now have your approximate goal-based Facebook Ad budget.

I hope this is helpful and please don’t hesitate to ask any questions!

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Mary Donné

Mary Donné

20 Followers

Ad Girl | PPC | Facebook and Google Ads | Funnel Builder. I like contemporary art, tea, and big animals.