Facebook Ad Budgeting

Introduction: Facebook Ad Budgeting

If you’re a beginner, you might be wondering this important question – how much should I spend on Facebook Ads? After all, spending too little might run the risk of missing out on conversions while spending too much might cause overspending. You want to find the perfect number and make the most out of every dollar! Luckily, this article might be able to nudge you in the right direction as we’ll go more in-depth into budgeting. 

We’ll go over how to determine your ad spend based on your revenue goals and how to allocate your money accordingly to meet your goals. In addition, we’ll provide some tips for running ads on a small budget and avoiding common mistakes. 

Without further ado, let’s get started!


Budget Overview

Though we briefly went over the budget in our Facebook Ads blog post, it’s a good idea to revisit the basics. Firstly, there are two ways to allocate your budget- by campaign or by individual ad set.


Campaign Budget and Ad Set Budget

Campaign Budget:

This allows you to set one overarching campaign budget that distributes in real-time to ad sets with the best opportunities with the help of campaign budget optimization (CBO). Utilizing this method will allow you to decrease your workload by reducing the number of budgets you need to manage manually. Click here to learn more about CBO. 

Ad Set Budget:

As the name implies, this method allows you to set individual budgets for your ad sets if you want more control. While campaign budget allocates your budgets accordingly evenly throughout your campaign, ad set budget allows you to direct your funding as soon as opportunities become available for that ad set. 

To learn more about the budget types and how to choose between the two, click here

Daily Budget and Lifetime Budget

Now that you have an understanding of budget allocation between ad sets, we’ll move onto selecting how each set will use the money over a budget duration. There are two options: Daily Budget and Lifetime Budget.


Daily Budget:

Daily budget requires you to set an average dollar amount per day and Facebook will do its best to optimize over a week. Facebook will search for the best opportunities and deviate from your average, about 25%.

Using Facebook’s example, if your daily budget is $10, Facebook may spend up to $12.50 on a given day. Despite this slight deviation, your spending will still average out over the week. 

This may be a good fit for you if you’re running ongoing campaigns, especially increasing brand awareness.


Lifetime Budget:

Lifetime Budget is defined as the total amount you’re willing to spend over the entire run-time of your campaign or ad set and is perfect for pre-defined campaigns. For example, if you’re running a discount sales campaign, you would normally have a defined budget and end date in mind. 

Once you’ve done that, Facebook’s algorithm will take over and show the ad where it believes you can get the highest return for your ad dollar. If daily consistency isn’t your main concern, you should consider this option. 

The Perfect Facebook Ad Budget

The perfect Facebook ad budget does not overspend to achieve your goals. Although it doesn’t sound too hard, it does require some trials and errors. Here will provide some steps that should help minimize your downside. 

Here are the steps:

  1. Define Your Goals
    Start off by determining what concrete goals you hope to achieve such as sales goals, Facebook interactions goals, etc. After that, match your goal(s) with the appropriate campaign objective. As you can see down below, within each campaign objective, there are more specific marketing objectives, one of which you’ll have to choose so Facebook can optimize your ad(s). So, for example, if your goal is lead generation, select “Lead Generation”, create your lead ad, and watch Facebook collect data on potential clients which you can follow up on and view later. 
  2. Understand the Cost
    This comes as a no brainer! Every business must analyze and understand the cost of running Facebook ads, which may vary depending on your marketing objectives, audience size and other factors. For beginners, it’s recommended you understand that Facebook works on an auction system. This is where Facebook will showcase the ad with the highest “value” after an auction with relevant ads. To read more about the “value”, click here.To get a sense of the average costs, check out this 2020 Wordstream article. We also recommend browsing and keeping up with Salesforce, Nanigans and Adpresso for regular updates on social media ad spend. Though these won’t give you the exact cost of your campaign(s), these should serve as a good benchmark for advertisers who’re new. If you would like to read more, we believe this Buffer article does a wonderful job at explaining the advertising costs for Facebook Ads. 
  3. Set an Advertising Budget
    Once you have thoroughly understood the cost, it’s time to set your advertising budget. According to a Hubspot blog, as of February 2021, the average marketing budget is 11.7% of the total budget. If you’re trying to grow aggressively, you might spend more. If you’re looking to grow incrementally or maintain your success as a mature company, you might spend a bit less.  However, if you’re new, we recommend that you start small, start testing and track your metrics. This allows you to see which ads are effective. Start off with a small ad spend (ex. $5) over 3-5 days to allow Facebook to gather data on your ad’s performance; the longer you let it run, the more data you will have which will work heavily in your favor. After 5 days, you should have enough data to analyze and evaluate the performance of the campaign. Running multiple ads can help you get a better sense of what works since you have more to compare. Here are a couple of metrics we recommend tracking: 

    • Click-through rate (CTR) – This is the rate that people are clicking on your Facebook ad. You want this number to be as high as possible – an indication that the ad is working well.
    • Conversion Rate – Much like the CTR, you want this number to be as high as possible. The conversion rate tells you how often your ad leads to a conversion following the click. Therefore, if you see a low number, there could be a disconnect between the ad and landing page.
      After collecting and analyzing enough data, you’ll have a sense of what works for you and your goals.
  4. Increase your Facebook Ad spend

    After some time, you should have a general sense of what is and isn’t working; 5 days is enough. To change your budget, open Facebook Ad Manager and follow these simple steps:

    1. Hover over the ad set or campaign you want to edit.
    2. Click Edit.
    3. Change your budget.
    4. Click Publish and Close.

It’s that simple! We also recommend you check out our other blog posts for optimization ideas and examples to help make the most of your budget. If you would like to read about how to allocate your budget based on the types of Facebook ads, we recommend checking out this Social Media Examiner blog post.

You might be wondering, “What if I only have a set amount of money for my advertising campaign? Say, $100?” 

Well, lucky that is something we will cover in the next section!


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Facebook Ad On A Small Budget 

Though this may sound daunting, it’s actually not once you learn how to effectively allocate your budget and select winning campaigns; without a doubt, it takes time. Plus, you got to start from somewhere, in order to grow your brand and/or business!

You can read about best practices on a minimum budget in this blog posted by Facebook themselves, but we would like to add several more of our own. 

Without further ado, here are 3 tips for successful advertising on a small budget:

  1. Repurpose Your Best Content

    You should always audit your social media content, but you can take it one step further by throwing money behind the best-performing post(s). Though you can start from the beginning, we recommend you stick to the more recent posts. 

    While you are browsing through, check out the total engagement numbers(comments, likes, link clicks, or views) that your post has gained organically. If it does well as a post, chances are that it’ll also do well as an ad. In other words, you have an example of what works for you! Imagine how far it’ll take you if you repurpose the content with a little bit of money behind it! 

    You can utilize the Boost feature, offered by Facebook, to easily turn any post from your business page into an ad. Additionally, you can customize your audience, placement, and posting schedule to make every dollar count!

  2. Understand What Success Looks Like for YOU

    With a small budget, it’s important to understand what success looks like for you! Everyone’s version of success differs from one another. Clearly define your goals and KPIs to make sure that your ad content is working toward supporting these objectives. 

    Here are some metrics that you can track, other than the usual metrics—such as likes, comments, and shares :    

    • Reach
    • Audience engagement
    • Site traffic
    • Leads generated

    We need to repeat this one more time. Align your content with your objectives. You can do this by including a strong and actionable call-to-action anywhere in the ad.

  3. Monitor And Optimize Your Facebook Campaigns

    Monitoring your ad performance is the most crucial phase and one that many forget to do. When it comes to advertising, in general, nothing is ever set and done; you’ll always need to audit, revise or delete any ad set. If you have a small budget, you definitely would not want a single cent to go to waste, especially on ads that are not achieving any meaningful results.

    If you would like to learn more about how to effectively monitor your Facebook Ad campaigns, check out this blog where we go more in-depth!

    Now that we’ve provided you with several tips for running campaigns on a small budget, we would also like to provide you with some common mistakes that come up time and again. That way you can avoid them yourselves!

3 Common Mistakes

  1. Giving Your Campaign(s) Too Little Time

    Giving your ads enough time to run is crucial for obtaining data that you can later leverage in your favor to grow your business. As a matter of fact, this might be the primary reason why many miss their sales goals. 

    For example, the amount of data you have may affect how you target your audience. When your ad campaign targets the wrong audience, you’re losing time and money. Not to mention, you might not even get the results you’re looking for!

    We believe that $100 is enough to collect the right amount of data, but you must make sure to keep the ad running. As suggested earlier,  5 days should be enough. After viewing the results in Breakdowns in Ads Manager, you can make the needed adjustments. 

  2. Over- or Under- Segmenting Your Audience

    Yes, both are mistakes that many advertisers make. You don’t want your audience to be too broad or too narrow. Don’t worry, we’ll explain! Let’s start with under-segmenting your audience.

    Unless you’re a household name, it’s difficult to gain relevance among such a broad audience; everyone has different interests, preferences, etc. You want people with the highest purchasing potential  to see your ads and take action(s) before your budget runs out, so segmenting your audience can really improve your return on ad spend. Remember, Facebook has over 2.8 billion users worldwide!

    On the other hand, if you over-segment your audience, your tight hold may prove to be damaging. Over-segmenting will keep you in the Facebook learning phase, causing you to potentially miss KPIs and under-serve your audience as a whole. Moreover, the smaller your audience, the more you’ll have to pay! According to this WordStream blog, it’s more expensive to reach the same audience if you’ve broken up targeting options into 10 different ad sets rather than 3-4

    Another question you might have is  “How do I know if my audience is too broad or narrow?” We have great news! Facebook can calculate the potential reach for you, as seen down below.

    If you think the potential audience reach is broad, you might want to downsize by targeting people by their interest, demographic, etc. 

  3. Not Focusing On The Creatives

    In general, great visuals are a huge reason for successful Facebook Ads campaigns. Consumers tend to view images first before reading any text. Though we did mention repurposing your best-performing content, it’s best not to rely on them and let your ad creative go stale. After all, customers want to see something new every once in a while. 

    There are many websites where you can find inspirations such as Adobe’s Behance and Facebook’s own, Facebook Ads Inspiration. In addition, you can leverage design tools! Canva is a great website for design creation with hundreds of pre-made templates and copyright-free graphics and stock photos!  Remember, even though this process is the most time-consuming, this is the phase that’ll make the most impact to your campaign, prior to running them.


Following these steps will help you determine your budget. However, it’s important that you understand your own numbers and goals, as well as the types of data you need to make decisions. If your data are accurate and you act accordingly, you should see wonderful results, whether your budget is big or small! 

We wish you the best of luck! Did you find this blog helpful? Let us know in the comment!

Looking to learn more about how to generate more leads for your business?

Checkout Stiddle’s blog: Facebook Lead Ads