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Thursday 28th March 2024

How Much Should I Spend on a Facebook Ads Campaign?

Thu 30th Apr 2020
By Todd
Facebook Ads

I’m often asked, “How much do I need to spend on Facebook Ads?”

The reason it’s taken me so long to blog about it is this:

Firstly, it’s a piece of string question so it depends on a few things.

That said, I’ll do my best to give you an idea on how much you should spend on Facebook ads and I’ll make the assumption that you actually mean, “How much do I need to spend to see a result?”.

How Much Should I Spend on a Facebook Ads Campaign?§

How Much Should I Spend on a Facebook Ads Campaign?

Well, this all comes down to your audience and some well-known marketing laws

First of all, let’s have a really quick crash course in how marketing works to set the scene.

  • Firstly, just because you pay, doesn’t mean the ad will land well with your audience.
  • Secondly, if you’re marketing to a new audience, it’ll take time – more time – than when you market to an audience who already know you.
  • Thirdly, for the majority of the time you need to reach your audience more than five times with the same message – online you may need up to 20 touchpoints.

The rule of five in marketing…

Imagine the scene:

You need some new shoes. Actually you probably don’t even need them, but you want them. (The two are quite different.) You’ve wanted them for a while and they’re an important purchase to you.

So, you head to the shops, or you head online. Maybe you go to Amazon, or maybe you surf around a few online retailers. It matters little for this example.

  • Do you buy from the first place you see?
  • Do you buy the first result on Google or Amazon?
  • Do you buy in-store if you don’t know the brand of the shoe or the shoe store and haven’t tried them on?
  • Do you buy online if the product has very few reviews and you don’t know the website?

Probably not.

We’re all different, but many of those factors will come into play during our buying decision and it’s very unlikely you’ll buy right away from someone you don’t know, don’t trust, or have just never heard of before.

This is why you need to be everywhere.

When you shop, you research, and you buy from who you trust.

The rule of five is the concept that it takes five touch points in marketing to be noticed, and then that notice you gain has to be at the right time and place, too. I could see your gorgeous Mulberry ladies’ handbag fifty-five times, but I don’t use handbags, so your marketing is flawed on me.

Make sense?

Landing five irrelevant touch points with the wrong audience doesn’t lead to a sale.

So, you need:

  • Social proof.
  • And more than five touch points at least and within a sensible timeframe to the right audience.

That’s marketing. That’s the accepted situation anyway.

 

Marketing isn’t like prostitution

Richard Gear’s character had money in the mega 80s blockbuster movie Pretty Woman.

He couldn’t drive the car, but he had money and authority to borrow it and that helped him attract the attention of the character played by Julia Roberts and buy her time without all that wine and dine stuff.

Money clearly works in prostitution.

Flip that around though. Do prostitutes (the oldest profession apparently) gain a sale from everyone who sees their ‘marketing’?

No. Even in the movie, cars drove past Julia Roberts. They weren’t ‘looking for her service’ if you see what I mean. They weren’t in the buying (or any other) position.

Your marketing might well be on the busiest highway (Facebook) but that doesn’t turn everyone into a horny customer. And just because you pay for the ads, doesn’t mean they get the result… like £20 on a street corner does.

I digress…

via GIPHY

 

How much do I need to pay on Facebook Ads?

Your advertising needs to be well placed but one of the main factor affecting price (presuming you have the targeting right) is the touchpoints and how new you are to the audience.

If your audience knows you then they may well buy from you before they experience 5 touchpoints. If they’re unknown, you may well have to pay to reach them 15-20 times or more. And of course, some will never buy from you. It’s not black and white.

Remarketing on Facebook is also a good idea so do check out that blog too.

In Facebook, impressions show you the number of times your ads were shown on the platform. If you take the number of impressions and divide it by the number of people in your audience, you’ll find your ‘touchpoint’ figure.

Example: 25,000 impressions ÷ 5,000 people = 5 touch points across your audience.

 

Let’s put some more numbers into this to help you:

  • Let’s say that you create a small audience of just 1,200 people.
  • To reach them 5 times your ads would need to have 6,000 impressions (5 times on average to each person)

Let’s say you run a video ad (the cheapest ad type by far in our research) and that costs you 6p per impression.

  • 6p x 6,000 impressions = £360

Your audience will be very aware of you and if you’ve got some great landing pages, chances are you’ll be seeing some interaction and hopefully awareness and sales.

 

We ran an ad just like this for a small (well-known) audience of just 5,700 people and here’s what it looked like:

  • 1,259 ThruPlays
  • 1,414 people reached
  • 5,504 impressions
  • £0.02 cost per ThruPlay

Total spent = £27.94

It seems like cheap advertising, but let’s look carefully at those numbers again.

  • Audience size: 5,700
  • People reached: 1,414

We didn’t even reach a quarter the audience! You could easily assume that your impressions (5,504) means that you’ve ‘touched’ your reached audience of 1,414 people five times (5,504 ÷ 1414 )  so your campaign is a success, but what about the rest of the audience?

Ideally, you want to reach all of your audience at least five times. So, with this example you’d want to have 28,500 impressions, not 5,504. Make sense? You gotta keep going!

 

Essentially what you need to work out is this…

  1. How much will your ads cost per click/view/impression (which depends how you set up your campaign).
  2. Times that number by five and then by the size of the audience and you have your real figure.

 

For our video ad to get five ThruPlays for everyone in the audience, that looks like this:

  • 5,700 people x 5 touch points = 28,500
  • 28,500 x 2p per ThruPlay = £570.

… but it’s still not quite that simple.

You see, if they don’t press play, or they don’t watch all the way through… they’re still aware of you, right?

Yes! So, paying for ThruPlays or reach, or messages or click-throughs changes the game once again as you pay differently depending on the action you’re looking for your audience to take.

Does your head hurt yet?  

Go get another glass of wine and we’ll carry on with this. 

OK.

The simplest way to view this is on awareness of your ads which is the impressions versus the overall size of your audience. An audience of 5,700 people needs 28,500 impressions. What does that cost? That’s how much you’ll need… at least!

 

IT DEPENDS!

 

via GIPHY

It depends on what you’re trying to do with your ads. You have many choices now for Facebook Ads objectives.

Objectives are the ideal outcome of a Facebook ad and these are currently:

  • Awareness
  • Brand awareness
  • Reach
  • Consideration
  • Traffic
  • App installs
  • Video views
  • Lead generation
  • Post engagement
  • Page likes
  • Event responses
  • Messages
  • Conversion
  • Conversions
  • Catalog sales
  • Store traffic

Generally speaking (and this is very general) video views are the cheapest with just 1-2p on most ads. Link clicks or landing page views can be anything from 30p – £1 or more. Messages can range from 30p – £1, too.

Ultimately you need to choose the option that makes sense for your ads and what you’re trying to do with them. What action do you want people to take?

  • We ran the video ad for pure awareness and chose video views. We got 16 clicks to our landing page, but it cost just 2p per video view.
  • We ran it again and chose link clicks and got 65 clicks… but they cost 67p per click – expensive!

 

The key takeaway here is don’t have a MASSIVE audience

We often come across huge audiences of 100s of 1000s of people for an ad campaign that has a budget of £200-300. That’s really not going to work.

“If you have a small budget, create a small audience.”

That could mean an audience of under 10,000 people for a spend of a few hundred quid.

Targeting is really important here, too. Setting the location, age, gender and then of course the all-important interests makes this audience grow or shrink. Avoid choosing really broad interests (marketing, finance, cars). If you’re looking for a specific and small audience as the outcome – go niche!

Create an audience that you can afford to promote to 5,6,7, 20 times!

That’s the real key to Facebook ads… so long as you get that targeting done well!

 

Make sense? We hope so…

If not, or if you cannot be bothered to get into all this, we can set up and run your ads for you.

Just email us and we’ll take it from there.


Tags associated with this article

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2 comments on this article

  • Katina at 8:54am on November 3rd 2021

    Really helpful, Todd. Thank you

    1. Todd at 10:48am on November 3rd 2021

      My pleasure!

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