Facebook Ads Pricing, Budgeting & Bidding
This post is part of a series titled “How To Use Facebook Ads For Small Business”. Our goal is to help an average small business owner understand how to use Facebook ads effectively.
Determine the right amount to spend to accomplish your campaign goals
Setting a budget for your campaign is a difficult process to address without knowing some information about your business. Your budget should be determined based on the size of your business in annual revenue, your existing Facebook fan base, the goals of your campaign and should be large enough to sustain over a long period of time.
We are going to assume that you’ll only be doing one of the following three things with your ads…
- Getting new and highly relevant fans – you can think of this as building your list. We don’t want just any kind of fans. We want the right kind of fans.
- Promoting a post to your existing fans and relevant non-fans – Once you have a good base of the right kind of fans, you’re going to want to stay in touch with them regularly. Paying to promote a post to your fans can be an effective way to tell your customers and prospects about upcoming events, sales, new product launches, etc.
- Driving traffic to a specific page on your website – once you have the right kind of fans and you’re communicating with them regularly, you may want to drive them to individual landing pages on your website to increase the likelihood that they will purchase something, RSVP for an event, refer a friend, join your loyalty program, etc.
The Trial Phase
If this is your first attempt, start with a $100 test over a 10-day period, focusing on the ideal audience to accomplish your campaign’s goal. At this point we’ll assume that your goal is going to be very simple and that you’re just looking to get more of the right types of fans.
If you’ve done your targeting properly, you should be able to get between 150 and 200 new fans for every $100 that you spend.
Taking Baby Steps
If you’ve done the 10 day test and you have some fans but would like to promote a post to them, you can expect it to cost about $2-3 for your ad to be seen by each 200-300 fans. Please note that these are rough estimates just to give you a ball park idea of cost. If you’re continuing to use the targeting from earlier and want this ad to be seen by both your fans and people that are not fans, we recommend watching these ads and posts very closely. You can reach thousands of people in the course of a few days for $30 – $40. Try one of these each week and let it run for three or four days. Then try again the following week with a new post.
If you’ve done the 10 day test and you’ve promoted two or three weeks worth of posts, you should have an idea of how many new fans you have, how much people are interacting with your posts and even how many people are hitting your website. Now you should be starting to form ideas about what is working with your audience and what is not working. Likes, comments, shares and new relevant fans are an easy way to tell that you’re on the right track. At this point you’re ready to start developing your own voice. It should match the voice that you use with customers in your store. You can experiment with multiple audiences and multiple types of ads, or segmenting, which is covered in a later section. Try new things. Experiment.
If you have an ad that performs well with a specific audience, you can use that ad over and over again with slight modifications. If you’re having more success with events, advertise some of the more appealing benefits of the event with a link to a place where your fans can RSVP. If you’re strictly trying to drive sales, use a coupon code that’s only for a specific target to see how well that audience is responding to your ads.
All of the above can be accomplished in a three week window with a budget of as little as $250-$300 with as little as 3-5 hours per week managing the campaign. But you should not get started unless you have the desire to continue this process for a number of months before cancelling. Think of this sort of advertising as a constant and relevant conversation with the right type of customers and commit some time each week to the process.
Finding value – sometimes you won’t be the first person to think of targeting fans of certain product or interest. The more advertisers trying to reach an audience, the more expensive the suggested bid for clicks will be. If the suggested cost per click seems expensive, think about ways you might be able to target the same audience. Is there a similar product or interest that fans of the first product might be likely to also like?
Don’t get so creative with this that you lose the audience you chose to meet your goal. You can’t meet your goal by getting the absolute cheapest clicks available. You need to think about the quality of your audience, as it relates to accomplishing your goal. If your goal is sales, getting in front of 100 potential customers that are likely to come to your store and make a purchase is much better than 500 likes from people who will never meet your end goal.
The likelihood that your ad will be seen by your audience is based on your bid compared to other advertisers targeting the same audience, and the relevancy of your message, determined by how much interaction your message receives – clicks, comments, likes.
Some scenarios you’ll likely face:
The bid price is very expensive. You may want to target another group. If you’re certain that this is your ideal audience, make sure your message is something this audience will interact with. If your ad receives a high degree of interaction, you’ll be able to lower your bid slightly. Make sure you click through rate remains high.