According to Facebook:
“The minimum daily budget for any ad set is $1.00 USD and must be at least 2 times your cost per click (CPC) bid. For example, if you have a $1.00 CPC, your daily budget must be at least $2.00.”
In this post we will describe what is CPC, Facebook Ads budgeting, costs for different Facebook ad objectives.
But, the most important thing that you will learn is: What results to expect and gain sense of what are good Facebook Ads results.
Most marketers concentrate on explaining what are CPC, CPM, CPA, or CTR and other Facebook Ads Units, but too few of them will tell you their achievements.
When I first started with Facebook Ads, I learned very fast the user interface and got familiar with the terms and different ways of creating campaigns. Facebook Ads Manager is quite intuitive and easy to use. But, what is it that every new advertiser will ask himself when starting with Facebook ads?
Are the results from my campaign good or not? Should I continue with the campaign or no? Do I get average results like other marketers, or I get very expensive costs? What are the average numbers for different units and acceptable costs range?
Let’s begin step by step…
If you’ve never tried Facebook Ads, don’t be afraid, create your first ad and start with Facebook Advertising.
Creating Facebook Ad
Just go to your Facebook Account and select Create Ads or Manage Ads from the drop down menu in upper right corner. If you choose Manage Ads you will be redirected to your Facebook Ads Manager.
Or you can create new Facebook Ads directly from your Facebook Ads Manager:
How much do you want to spend?
When you create Campaign for the first time, you need to select Objective and then in the second window Facebook will ask you: How much do you want to spend?
As you see, you can select “Daily Budget”, and insert amount that you want to spent on daily basis. Or, you can select Fix Amount – Lifetime Budget for your Facebook Ads.
Normally, you can choose Start and End Date, and once again, don’t be afraid, you can Stop or Pause Campaign at any time and any moment.
How much to spend on Facebook Ads?
There are 9 types of Facebook Ads Objectives:
There are different Facebook Ads Costs for different types of Campaigns and different goals. For example:
If you want to promote your Facebook Page and gain more likes, you need to select objective “Promote your Page” at the beginning of creating your Facebook ad.
When you create this kind of Campaign, you need to measure Page Likes Results. The Cost column in Campaign Result Table tells us Cost Per Page Like:
Form the picture above you can see that Cost Per Page Like for my Webapon Campaign is: $0.40. You can easily sense that for different objectives the cost will vary. In continuation you will see what results to expect for every 9 objectives, but before that you need to know something about targeting.
Targeting and Audience
As you already know, Facebook has big Audience Worldwide and Facebook Users are all over the world. This gives us opportunity to target almost every Country in the World. The power of Facebook Ads is enormous: imagine that you can sell your Products in exotic countries like India, Egypt or Ethiopia.
Facebook Ads use bidding system. If there are many advertisers for the same target, bids rise and cost for Ads rises, too.
Costs for advertising in different countries are different. Facebook Ads Cost is bigger in developed countries with good economy, than in poor economic countries.
Also, you can target Audience by Interest, Age, Sex, Behaviors.
Depending on the type of Product or Service that you are advertising, there are many different Audiences that you can choose. There are 1 billion Facebook users and you need to narrow target audience according to your products.
Like I said before, Costs are different according to what kind of Audience you will select.
Facebook Ads Cost by Objective
- Clicks to Website: Send people to your website.
You can pay Facebook to drive traffic to your Website. If you don’t have Free Organic Traffic from Google, and you need visitors, you can create this kind of campaign. If you target United States, costs for driving traffic is more expensive than if you target Turkey, for example, but the quality of visitors is important, too. You need to drive visitors that are actually potential customers, nobody wants bots on their website. So, what are good numbers for Website clicks?
How much your visitors cost? How much are you willing to pay per one visitor? These are questions that you need to answer before you start the campaign. Also, this is different from business to business. Some businesses that have good conversion rate will pay more money even for 1 visitor, because they will convert them to customers and get profit from them. For example:
If your campaign Reach (number of people the ad was shown to) is 10000, with CTR 1% = 100 website clicks or 100 visitors.
If you have 1% conversion rate on your Website = 1 visitor will convert and buy your product.
If your product is $100, then you will have 1 sell and earn $100.
So, you have 10000 impression, with CPM $2 (cost per mile = 1000 impressions) = 2 * 10 = $20.
Cost for 1 sell is $20, and you earn $100 = $80 profit. This is good for you, you have positive ROI.
But, if CPM is $20 => 20 * 10 = $200. With this high CPM your costs are bigger than your earnings, and you will have negative ROI and not profitable business.
For Website clicks you need to follow these Units:
CPM form $1 to $4 and Cost per Click to Link <$0.2. With these numbers for $10 you will gain 50 visitors.
These 50 visitors are your potential customers. If you have new Website and you don’t have visitors it’s good start with 50 visitors per day, and for that you will need $10/day or $300 monthly budget for 1500 visitors/month.
|Website Clicks expectations Costs|
From this example you can see that there are many factors involved that you need to considered when calculating if your Facebook Ad is successful or not. I will show some numbers, just for illustration, but every advertiser needs to calculate what are good numbers and finally if the Advertisement brings what they need.
Normally, you will set your budget according to your marketing plan and your financial projection.
Here is the complete list for other objectives.
- Website Conversions: Increase conversions on your website. You’ll need a conversion pixel for your website before you create this ad.
- Page Post Engagement: Boost your posts.
- Page Likes: Promote your Page and get Page likes to connect with more people that matter to you.
- App Installs: Get installs of your app.
- App Engagement: Increase engagement for your app.
- Offer Claims: Create offers for people to redeem in your store.
- Local Awareness: Reach people near your business.
- Event Responses: Raise attendance at your event.
- Video Views: Create ads that get more people to view a video.
If you need to calculate Facebook Ads Cost you can use our FREE tool. This calculator will give you some orientation about how much to expect to spend on Facebook Ads. The most important thing is to optimize your ads, and to make tests. Start with small amount of money until you get numbers that you will be satisfied with. After that you can set bigger amount.