Episode #020: How to Figure Out Your Facebook Ads Budget
How to Figure Out Your Facebook Ads Budget
Have you ever wondered "how much should I spend on Facebook ads?"
If so - this episode is for you...
Tune in to learn:
-> How much you should spend on Facebook Ads each month at a minimum
-> How to determine your unique Facebook Ads Budgets
-> The important metrics to consider when you run ads
Links Mentioned on the Show From Zach:
Full Transcript:
This is Not Your Average Online Marketing Podcast, episode number 20. And in this episode, we're talking about budgeting for Facebook ads. How much should you spend? How much can you spend? And what does it take to create a successful budget for a campaign? So, let's get into it.
Hey, hey, hey, not so average marketers, welcome to another episode of the podcast. Now, this week, I want to talk about something that really comes up time and time again when I'm talking to my audience, when I'm talking to my students, when I'm talking to my clients, and that is, they say, "Zach, how much do I need to spend on Facebook ads?"
We recently launched a six week Facebook ads bootcamp, and that was one of the most common questions that came up from people was, how much do I need to spend to make this successful? I wanted to talk about this on the podcast today because the reality is there's no one answer. I think it's important to start there, that I'm not going to sit here on this show and go, "$500 a month, end of show," which I don't think you expected anyway. But I think it's important that we talk about, how do you actually figure out and determine what you should be spending on Facebook ads?
If you're sitting here saying like, okay, I do want to get into Facebook ads, but where do I even start when it comes to spending money? The first thing I tell people is you have to start with your goals. Okay? We can set a clear framework of a minimum spend, and we'll kind of talk about that in a few minutes as well, but you have to start with your goals. What is it that you want to achieve with Facebook ads?
If you want to do lead generation, which we're going to talk about a little bit later, you have to figure out, how many leads do you want a day? If you're saying, "I want to grow my list 300 people a month," then you need 300 leads over the course of 30 days, which comes down to about 10 leads per day. Now, this is a great place to start because you can actually start running some really simple ads to start to figure out about what you spend per lead.
What I like to do to kind of figure out how much I'm going to spend on Facebook ads is I start by doing a testing campaign. Okay? What a testing campaign is, is where I'll spend $50 a day for 24 to 48 hours testing a bunch of different audiences, ad creatives, combinations, to ultimately figure out what's going to give me the best results for my ads. Now, once I've done that, what I can do is say, "Okay, my average cost per lead is hovering around this number." To give you a really specific example, we're running an ad right now about freebies and how to come up with a really great freebie.
We actually talked about it on the podcast last week, how to create a really awesome freebie. And we're running ads to that and we're getting leads for just under $1.75. Our leads are coming in right around $1.69 as of the time I'm recording this. I know that if I want to generate 10 leads a day, that I need to spend about $17 a day to get results. Now, what I recommend is that you don't just say, "Oh, $17 a day. They're as my results." What I say is tack on an extra 20% to 30% or round up a little bit if you're not comfortable increasing it that much.
So, I would say, "Hey, if I want 10 leads a day, I'm actually going to spend closer to $20 a day," because it leaves me a little wiggle room, right? Just to kind of recap what I do is I set up a campaign, I'm testing it across a variety of different audiences, and ad sets, and copy, and creative. I'm basically saying, "What's going to give me the best return for my money?" Once I have a clear number of what I'm spending per day, then I can look at my lead budget and say, "Well, this is what I need to spend a day to hit that goal."
Instead of asking the question, "Hey, how do I actually budget for my Facebook ads? Or how much should I spend?" I'm saying, "I need to spend this amount to hit this goal." The reason that this is so powerful is because you can also look at this and go, "You know what? I don't want to spend $25 a day on Facebook. I'm doing the maths stack and that's like $750 a month. That just doesn't make sense for me in my business right now." That's okay. If that's what you come up with, then this is where it gets really cool.
You can crunch the numbers and say, "Look, I'm only willing to spend 500 a month," which comes to like 15$ to $20 a day. And you can say, "At $15 to $20 a day, I'm going to generate eight or nine leads a day, which is about 240 to 250 leads over the course of a month. Then you can kind of sit with that and say, "Hey, is that enough? Do I hit my goals? Is that worth it for me to be running ads to hit those kinds of numbers?" The average person, but you are not average says, "How much do I spend a month?"
But you say, "I'm going to crunch my numbers. I'm going to calculate my goals. And I'm going to determine where my comfort zone is and where my whole zone is." I tell people all the time, my ideal is to find that middle ground, right? When it comes to Facebook ads and your budget, you might say like, "I'm fully comfortable spending 300 a month, but my goals say I need to spend 600 a month. Well, then what you can do is stretch yourself just a little bit, right?
Don't put yourself in debt over running Facebook ads, but maybe you're like, "I'm totally comfortable at 300, but 450 feels like a real stretch, right? We've heard the quotes, we've heard the anecdotes, right? That success is just outside your comfort zone. So, if you're totally comfortable at 300 a month, then what I tell people is, "Hey, spend 400, spend 450. Push yourself a little bit if you can financially afford it, because that's where that magic is going to happen. That's where that growth is going to take place. Now, realistically, it you're like, "Zach, I'm listening to this episode, numbers make me go cross side. Can you give me just a baseline that you like to spend?"
For me, I don't like to spend less than $10 a day. When I'm talking to new clients, I'm like, look, just be willing to spend $10 a day. It's $300 a month. It's going to give you some good lead generation. We'll also talk to you a little bit later about some of the more advanced ads that you can be running and how they factor into the overall budget. I won't go too far into how to run ads today, but I will let you know that, back in episode four, we talk talked about how to always be running ads that grow your list and your social presence.
So, if you're like, well, what should the breakdown of that $10 a day be? Go listen to episode four, and we'll link that up in the show notes for you as well. And we'll show you how to spend your money, but if you're like, "I just want to know what to spend, $10 a day minimum, but crunch the numbers. Because here's the reality, you can expand or increase your ad spend and reach with time. The thing about business is that we get so tripped up into wanting everything to happen right away. We say, "I need this now, I need this right away. I need this as fast as possible."
The truth is there's so much time. You don't have to do everything today. You don't have to do everything tomorrow. You don't have to do everything this month or this year. I've been in business for seven years, and I can honestly say that there are seeds I planted years ago that are just starting to blossom and there are seeds I planted last week that are starting to blossom. The goal isn't to do this all in one fell swoop and say, "I'm just going to spend $3,000 on ads this month and I'm going to see a massive growth in my business overnight."
That's just not realistic and it's not something that you want to do. Because one of the things that I really wanted to cover on this show is just because you have money to spend on Facebook, doesn't mean you should throw it at Facebook in an effort to solve your business problems. Because Facebook ads are just one piece of the bigger picture. So, if you're like, "I've never run ads before, but I'm going to spend 3000 this month." Here's what's going to happen. You're going to blow through that money. You're not going to see the results you want. And you're ultimately going to be kicking yourself for spending money without knowing where that return is coming from.
Just to go a little bit deeper on that, what I want you to understand is that I like to start smaller and scale up my spend over time. If you're like, I could really spend $100 a day, I say, look, crunch your numbers, crunch your goals, but maybe you start at 25 or 50 a day and you increase your ad spend over time as you figure out what works, as learn the ad strategies. As you figure out what it takes to be a success based on your numbers, goals, and metrics. Now, I want to take a moment, if you're listening to this episode and you're saying, "Zach, this all sounds great, but how the heck do I even run Facebook ads? How do I get started?"
Well, I do have a five-day on demand lead generation with Facebook ads bootcamp. You can head over to bootcampheartsoulhustle.com. Again, that's bootcamp.heartsoulhustle.com. I have a training that teaches you exactly how to run simple lead generation ads that grow your E mail list. Now, we sell this for $25 and it's completely accessible. We've made it completely beginner friendly. So, if you're like, "How do I start growing my list? How do I spend that $10 a day?" We break it down in that training. Go check that out if you're like, "I just want to get started." We've made it $25, so it's crazy accessible.
It's one of my favorite ad resources that we send people to. Now, back to the episode, what I want you to understand is that there are various ways that your ads can convert to customers. If you are just growing your email list, if you're like, I'm just growing my email list to prep for my next launch, then I want you to be thinking about the long term return on your ad spend, right? If you're like, "I'm going to grow my email list to a thousand and then I'm going to launch to them." Well, you're not going to see a return on your ad spend for that first thousand leads.
You also need to be asking the question, how much can I spend before I need to see a return? Whereas, if you are running Facebook ads to say an email sales funnel, then you could be running ads, growing your email list, but also pitching a product that helps you recoup some or all of your ads spend. So, what I want you to think about is that, if you're running ads, you really need to be tracking how they're doing and the results.
Now, if you're vast in the ads manager, you can do a lot of this tracking right in the ads dashboard. But if you have a funnel, you need to be keeping track of how people are converting. How much are you spending on your ads versus how much are you returning in sales and customers? What ends up happening is that you're doing a lot of work to grow the list or grow the funnel, but you're are not knowing if you're returning a positive ROI. Here's one thing I'll tell you about Facebook ads. The point is not just to grow your list or fill your funnel. The point is to return a long-term ROI, right? It's to grow that business.
I track my ad spend, and the results that I'm seeing monthly, so that I can look at what's working, I can look at what's going well, I can look at what's converting. We have a funnel running right now for our membership, and we're putting a thousand leads into it. Then we're taking a breather and we're saying, how did those thousand leads convert to an offer? Because if we don't do that, what ultimately happens is we say, "Oh my gosh, my list grew by a thousand, look how great it is." And we lost money, right?
Or we don't see a positive ROI and we go, oh, "We wouldn't have known that if we hadn't tracked." The other thing that goes into that is that you want to keep track of your ads about every 24 to 48 hours. Now, once you get a good lead generation ad going, you don't have to obsess about it every moment. You don't have to be thinking about it 24 7. What you do have to do though, is check in on it every 24 to 48 hours, what's working? What's not working? And you may need to cycle in new copy and creative. There's something that we call ad fatigue in the ad world, and what it basically means is that an ad doesn't last forever, right?
It lasts for a while and then the ad will stop converting. It'll stop converting and people will go, "Oh, I've seen this before. I don't need to click on this." Or it just gets too expensive beyond what you're looking for and your goal that we talked about at the very beginning of the episode is no longer in alignment with the numbers that your ads are generating. So, keep in mind that you may have to cycle through new copy, new creative, new ad. When doing that, you can bring your cost back down. So, there's also this element of like, you may want to increase your budget by 10%, 15% and add on another ad that's always testing new copy and creative.
Now, full transparency, I could be better at this myself. We don't always test new copy and creative. Sometimes we get that home run conversion rate and we just run with it. But it is helpful to always be testing new copy and creative. I want to kind of recap and leave you with a thought. I know this is a shorter episode, but I really just want you to not feel overwhelmed by this and just think, "I can do this. I can set a budget. I can get started." First things first, start with your goals. What is it that you want to achieve with your ads?
Once you have that goal, test out some ads, spend 50 to a hundred bucks to get some key metrics. Once you have those metrics, how your ads are converting, what you're paying per lead, then crunch some numbers, right? Crunch some numbers to figure out, how much do I need to spend? How much should I spend? And then the minimum spend that I recommend a month is about $300 or $10 a day. Remember, you can always expand your budget with time. You don't have to start at $1,000 a month or $1,000 a day or $1,000 an hour.
You can start at 10 bucks a day and just kind of get out there. And we talked about how, if you're thinking about, "How do I run these ads? How do I get started?" We have that bootcamp, bootcamp.heartsoulhustle.com. It's a five day training to get you off the ground and running lists, building ads. Then we talked about the versus lead generation. You need to be thinking about when you're going to see an ROI from your Facebook ads and keeping track of it.
Track your ad spend and your results so that you know how the business is doing and the state of your Facebook ads. Once your ads are up and running and you spending the amount you want to spend, you need to check your ads every 24 to eight hours to make sure that they're still converting successfully. And if they're not, you can cycle in new copy and creative to avoid that ad fatigue that we talked about. I want to leave you with this closing thought. Budgets can be small, but mighty. You don't have to spend massive amounts of money to start seeing that needle move in your business.
Now, yes, the more you spend, the more you can return. But start at $300 a month, just start. Because I can honestly say that Facebook ads have been one of the best things I've done for my business. I started very early on with them. I continue to use them to grow my business. And I think that you would see a massive benefit from it too. Now, if you enjoyed this episode and you want access to any of the resources that we mentioned, you can head over to heartsoulhustle.com/nyap020. Again, that's heartsoulhustle.com/nyap020, for Not Your Average Podcast, episode number 020, and check it out.
We'll have a full transcript of the show. We'll have all of those resources listed for you, and I really just want to encourage you to get out there and test some Facebook ads because they can be an absolute game changer for your business, for your growth, and for your conversions. That's it. Get out there. Build your budget. Run some ads. And until next week, stay not so average.
