Here is THE question that every advertiser, marketing manager, or acquisition manager asks themselves! To help you find the best answer for you, the JVWEB Social Ads team shares its best tips with you. Regarding generating acquisition via online advertising, the question of budget is central.
How do we find the balance between available resources and necessary investments? What metrics should you analyze? How do you define your ad budget to communicate on social networks? How can you pass this budget on to your Facebook and Instagram Ads campaigns? Here are some of the questions we will help you answer!
You Are Defining Your Social Ads Budget: The Right Questions To Ask Yourself!
When discussing campaign budgets for Facebook, Instagram, Google Ads, or any other lever, there is not one correct answer but multiple parameters to consider. Each business is unique, as is each mission. Hence, the proper method for setting your advertising budget is to deal with market realities to find a path to profitability. Before entering sums in your Excel, ask yourself a few questions…
How Much Do Facebook And Instagram Ads Factor Into Your Marketing Plan?
Depending on the type of your business, its market, its target audience, its history, its products, and its past experiences, the percentage carried by the advertisements broadcast on the Meta network can vary considerably. There are no actual rules on this matter. Ask yourself if this is a supplementary budget.
Will you have to switch an envelope from another lever to Facebook Ads or Instagram? What profitability do you expect, and what risk are you willing to take? A word of advice: if this is your first campaign, start slowly and increase your budgets as you gain feedback from current campaigns.
How To Break Down Your Facebook And Instagram Ads Budget By Objective?
Once you have established your initial framework, also ask yourself how to distribute your budget according to the objectives you aim for with your different campaigns. Traditionally, we attribute:
- 60 to 70% of the Social ads budget goes to lead generation.
- 10% of the budget goes to the top of the sales funnel, with a view to brand awareness.
- 20 to 30% is attributed to Facebook & Instagram remarketing campaigns
These are only benchmarks that need to be personalized about your business strategy.
How Much Will My Facebook And Instagram Ads Campaigns Earn Me?
Here, the idea is to unfold your different business scenarios to calculate the KPIs that serve as benchmarks for you. Sometimes dull, the exercise is nevertheless beneficial for weighing campaign costs and their profitability. If these are your first Facebook and Instagram Ads campaigns, these quick projections will help you set initial pricing limits, even without knowing how your campaigns are converting. So, let’s imagine that your company sells BtoB services. You are used to using, as an acquisition lever, the organization of webinars aimed at your target audience.
An event during which you share quality content for free and which allows you to sell a service billed for €1,000. You know from experience that around 10% of people who register for the webinar then contact you for a sale. You set yourself the goal during this event of having 100 people registered. So, you launch a Facebook Ads campaign dedicated to this subject. You, therefore, have a business potential of €10,000 (€1000 x 100 people x 10% transformation).
You also know that to mobilize your 100 people using another lever it would cost you around €10/person. You would, therefore, have spent €1,000 (100 people x €10). Consider this as the basis of your campaign budget for recruiting your registrants. Your target CPA is, therefore, €10 (€1,000 campaign for 100 subscribers). The net income from this operation is therefore €9,000 (€10,000 turnover – €1000 expenses). For €1,000 invested, you recruit 10 new customers, each bringing you €1,000. An excellent ratio!
How Do You Define Your Facebook And Instagram Ads Advertising Budget?
What Options Should You Choose To Manage Your Budget On Facebook?
First tip: when launching your Facebook and Instagram Ads campaigns, determine your budget at the ad set level rather than using the Facebook Advantage option. This will allow you, at least during the testing phase, to visualize your performance campaign by campaign and thus draw more lessons from it.
The Facebook Advantage budget will be smoothed across all campaigns. Also, the algorithm is freer and can allocate only a tiny budget to the target audiences you wish to test. In addition, it will be more complicated for you to disentangle the results! You will also have the possibility to cap the minimum expenses of the different campaigns. It is better to avoid doing this during the testing phase; instead, wait for scaling when you will have better visibility of your performance.
Finally, you will have the choice, from the Business Manager, between a Daily Budget and a Lifetime Budget. Here again, in the launch phase, it is more prudent to opt for the Daily Budget, which allows a more open campaign. If, as in the example above, your campaign has an end date, the Lifetime Budget is more relevant. By allowing more planning, this option is also recommended if you want to limit your advertisements over time. For example, broadcast only during opening hours, when your teams can interact with customers.
How Do You Manage Your Facebook Placements To Control Your Budget?
First tip regarding placements: if you want to keep maximum control over your Facebook and Instagram Ads campaigns, it’s best to create separate ad sets for each placement. Otherwise, everything will be centralized via Facebook, and the network will distribute the budget unequally between these two platforms. By opting for a Manual Location, you set your limits on each network. In the launch phase, this also helps you better understand different audiences.
How do you optimize costs to preserve your Facebook and Instagram Ads budget? When discussing budgets, we are all looking for a solution to minimize them with equal performance. Again, it is better to proceed in stages and take the time to achieve your objective without altering commercial results. When uploading your Facebook or Instagram Ads campaigns, in the Optimization and Distribution section, you can activate the Cost per result objective option. It’s a reasonable choice for those who want to keep control of their advertising expenses.
However, if you set a goal too low, the ads will not be shown. To know the correct heading, refer to your calculation made previously! During the launch phase, it is better to leave the field empty and adjust it later when your campaign is established. Once the campaign is in place, it is time to optimize the budget. You now know your audiences and the operational campaigns. You have an idea of your metrics and manage to maintain them. The time has come to scale up. To do this, you can:
- Increase the reach of your ad sets by adding a daily budget to them. Select your 4 best audiences, add the budget by level, then break it down to the 4 most successful campaigns.
- Enable the campaign budget option with Advantage. You then delegate part of the optimization of your budget to the platform’s algorithm. Be sure to keep your eyes peeled to maintain your level of performance and the relevance of your audiences.
Determining an advertising budget for Facebook and Instagram Ads is a subtle exercise, requiring experience and patience to adjust the variables to maintain the best business performance constantly. Experienced in various issues, the Social Ads consultants of the JVWEB agency will be able to advise you on defining the most tangible objectives and KPIs, both in light of your ambitions and market realities.