how much to spend on facebook ads 2020

Facebook Advertising Costs In 2023 | How Much Should You Spend in Facebook Ads?

all right so how much do facebook ads,cost it's a question that we get every,single day,as a facebook ad agency and i'll be,honest it's a little tricky,and different for everyone primarily,because facebook lets its advertisers,choose their own budget,you can run ads for as much money as you,want and,for as long as you want but still how,much money should you really be spending,on facebook ads,today you're gonna find this out and so,much more,oh,hey everybody my name is sherman with,life marketing a digital marketing,agency that helps small businesses grow,today i'm going to fully explain,facebook advertising costs to you,and help you determine what's the best,amount to invest into your facebook,advertising campaign,i mean there's campaigns that we've ran,where we've just spent four thousand,dollars and generated over one hundred,and thirty thousand dollars in revenue,for our clients,but does that mean that you need to,spend four thousand dollars in facebook,ads not exactly so let's go ahead and,break facebook ad,costs all the way down and then,determine what works best,for your business okay first and,foremost how does facebook add costs,work like how much do facebook ads,actually cost well according to facebook,you can buy facebook ads,on any budget well that was very helpful,wasn't it,when i tell my clients this they're kind,of like no but seriously sherman how,much do i need to spend,in order to really make this work and if,that's you don't worry,i got you covered here the first thing,you need to understand is how facebook,advertising costs really work,technically facebook charges you to,reach people on facebook,so for example if you spent five dollars,you might reach 500 people,and if you spent 10 dollars you might,reach 1 000 people,and so on this costing format is,referred to,as cost per thousand impressions or cpm,every time you run an ad on facebook,there will be an associated cpm related,to it and as you can see,these cpms vary based on the,advertisement that's running which,actually brings me to my next point,which is,why do facebook cpm costs vary there are,a few things that influence your,facebook ad costs,so let's go ahead and discuss this and,then we'll talk about how to set,your monthly budget for facebook ads,alright the first thing that influence,your cost,number one is add relevance the most,significant factor is this little thing,called relevance inside of facebook,businesses that have the most relevant,advertisements are rewarded with lower,cpm costs and businesses that have,crappy ads will,have higher cpm costs you see facebook,measures,every ad shown for quality engagement,and conversions,ultimately they do this to help show,their users the best advertisement,this way they can keep people on,facebook longer and continue to serve,more advertisements to them which makes,facebook so profitable for example let's,say that business a,spends one thousand dollars in facebook,ads and earns a 20,cpm hypothetically this would mean they,would earn 50,000 impressions for just one thousand,dollars on the other hand let's say,business b,spends about one thousand dollars in,facebook ads as well and earns a ten,dollar cpm,this would mean that they would earn one,hundred thousand impressions for just,one thousand dollars that's double the,amount of impressions for the exact,same ad spend you'll increase your,chances of getting lower cost clicks to,your website,and most importantly lower cost,conversions by having relevant ads,okay let's move on to point number two,audience size your audience size will,also,influence your facebook ad cost in,general,the broader the audience the lower the,cost and the more narrow the audience,the higher the cost here's a very simple,example to illustrate this,let's say you have a niche business and,you only want to target about 1 000,people,because the audience is so small you'll,probably be,very limited in reaching them on a daily,basis and that's if they even use,facebook on a daily basis,and even if they do it might just be for,a small period of time,but there's likely hundreds if not,thousands of advertisers on facebook who,want to reach,that same exact person for that period,of time,so why would they reward your business,in reaching them,well it's probably because you're going,to reward facebook by paying higher cpm,costs,on the other hand an advertiser only,targeting 1 million people will have no,problem taking whoever becomes available,within their very broad,audience that they've selected because,of this they will likely see,lower cpm cost overall this is true,across,our agency to be honest with you we've,noticed that larger audience sizes tend,to have,lower cost across the board and more,narrow audiences like small,towns or very niche markets have higher,cost on facebook all right point number,three,add competition your facebook,advertising costs might also vary based,on competition,there are some audiences that are more,competitive than others for example,it may cost you way more to reach an,audience of c-suite executives than it,would to reach the average person,different audiences have different,levels of competition amongst,advertisers,which may require some level of,creativity on your part,to determine the best way to reach your,desired audience,alright now let's answer the magic,question how much should you really,spend,on facebook advertising like right now,before i say anything,let me give you a general rule in,general the more you spend,in facebook advertising the more people,you will reach,and ultimately the better your chances,are of increasing your business leads,or revenue so if you're stuck in between,spending just,a little bit and a little bit more then,i choose a little bit more,every time if it fits within your budget,with that said let's try to nail down,exactly,how much you should expect to spend in,facebook advertising costs here are the,big things you need to consider,number one do people know your business,exists if no one knows your,business exists you're likely going to,have to spend more money to see,sales from facebook advertising the,reason why is because people buy,from businesses they know and trust and,if they don't already know you,and trust you you're likely going to,have to make some deposits into them,first before you can expect a deposit,back from them,one of the most effective ways to,generate sales from facebook ads is,through retargeting which is,advertising to people who recently,visited your website or,engage with your business on social,media now if you're like many businesses,and you don't already have an audience,to retarget,for your facebook ads then you're going,to need to build that audience up first,you should aim for a retargeting,audience of at least 10 000 people for,optimal results,if you don't have this then you need to,spend whatever it takes to build a,retargeting audience,up that is how most people are winning,through facebook ads if you're starting,from scratch then you should expect to,spend at least two to three thousand,dollars to build,awareness for your business this amount,of course can be split up over a period,of weeks or months,okay number two what kind of media are,you using in your facebook ads it's no,secret that facebook favors video,content,and their news feed over other types of,content and in general,video content has lower cpm and,conversion cost,than other alternatives with that said a,facebook ad with video,is more likely to reach more people at,lower cost,allow you to spend less overall or just,get more bang for your money and if you,don't have video,don't worry you can still develop,effective ads with high quality images,or graphics that get your point across,we run several campaigns that perform,very well without video,but i'd be lying if i said video doesn't,help so aim the ad video whenever,possible to minimize your overall,facebook advertising costs,number three how much does your products,or service cost the more expensive a,product is,the more resistance people will have to,buying it so if you're selling a product,that costs one thousand dollars don't,expect to spend 500,and generate 25 sales that's like a 12,times return on aspen,which we've seen before but it's very,rare and i wouldn't count on it from the,beginning,i'd rather set your goal to breaking,even initially,and then working yourself up to the two,to three times return on ad spin range,and as time goes on you continue to,optimize your campaigns to see more,results,and higher returns so in short your ad,spend should be correlated to the price,of your solutions,you can simply take your average sales,price times the amount of sales you,desire,as a minimum ad budget okay number four,how much,cash do you have available to invest the,amount of cash you have available to,invest,into facebook ads is very important as,much as i'd like to sugarcoat this,and give you a fairy tale ending i can't,it's very possible that your campaign,does not perform the way that you wished,it would so,you need to be prepared to lose the,money you invest into a facebook,advertising campaign,i would not put my last dollar into a,facebook advertising campaign to,determine if my business will survive,or not so make sure that you can,comfortably step your foot into facebook,advertising to determine,if it will work for your business and be,prepared to pivot,if it doesn't alright let's go ahead and,get to the bottom line here how much do,facebook ads really cost,or in other words how much should you,really invest to see if this will work,for your business or not,as stated according to facebook you can,use any budget but setting any budget,won't change your business,you need valium in order to win at,facebook ads,you need to reach a mass amount of,people make them aware of your business,and convince them to purchase from you,to do this i recommend that you budget,at least,five thousand dollars to determine if,facebook ads will work for your business,or not,and if you can get that amount up to,seven thousand dollars or more,that'll be even better this should give,you enough fuel in the tank to build,necessary awareness for your business,and begin using more advanced features,like retargeting,and look-alike audiences and by the way,i don't recommend spending this amount,of money in one week,or one month whatever your total budget,is divide it by six,it takes at least six months to build an,effective facebook advertising campaign,this is because you will rarely build,a profitable campaign on day one the,truth is it takes,weeks and months of reviewing,performance data and making proper,changes to your campaign to,increase performance so if you have a,set budget,of five thousand dollars that equates to,a monthly budget of around,8.50 or if you set a seven thousand,dollar total budget that equates to,close to twelve hundred dollars a month,in facebook,ad spend so a question i get all the,time is are there any,extra costs associated with facebook,advertising not necessarily but there,are some things that you may decide to,buy,to improve your overall results like for,example,investing into a quality website or,video to help you convert people into,buying customers,or you may decide that you want the best,hands to take care of you so you might,decide to hire a facebook ad,agency like life marketing it all,depends on where you are in your,business,if you don't have a lot of money in the,tank your only option might be,to take a stab at this yourself but if,you're juggling managing your business,and customers it might be best to hire a,partner to devote the necessary time to,do this correctly,if that's you we'll be happy to help if,not we hope this episode helps you,create a booming facebook advertising,campaign to grow your business,with that said let's go ahead and recap,today's episode,alright so today we talked about,facebook advertising costs remember at,the end of the day,facebook charges you to reach people the,more people you want to reach the more,money,you will need to spend now with that,spend your facebook advertising costs,will vary,based on a number of factors like your,ad relevance,audience size and overall competition,now while understanding facebook costs,are really cool and everything you,ultimately need to determine,how much money you are going to spend on,it when setting a budget you need to,think about your overall,awareness in the market media you will,use in your campaign,your pricing and cash reserves available,to invest,into a facebook advertising campaign and,as a very general recommendation,we suggest that you spend at least five,thousand dollars over a period of time,to determine if facebook ads is a good,avenue for your business,but at the same time if you have very,ambitious goals like some of the people,i've talked to,the budget needs to match it the more,the merrier all right i hope this helped,guys,if it does be sure to subscribe to our,channel because there's much more,content like this on the way to,help you grow your business and if i,helped you out all today help me out by,hitting that like button below,thanks everybody i'll talk to you soon

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