How Much to Spend on Facebook Ads?
One of the questions that comes up all the time is how much money do I actually or should I be spending on facebook ads and it really depends you can spend as little as a dollar a day that's the minimum that facebook requires you if you're going to run as they ask you to commit to at least a dollar a day now that's definitely not a lot I think we can all commit to a dollar a day to get more people to come to our website and interestingly, if you spend more than seven hundred fifty dollars per month on facebook at you get your own dedicated facebook account manager to help you with your ads for an entire month and that's something that I just signed up for I haven't started working with them just yet because I still need a bit more time to get my facebook stuff up and going when it comes to add but they do have that option to you and the reason they do that is because they want you to spend money but they also want you to spend your money wisely they're not all about taking your money w...
ith no return because if you're getting a return on your investment then they know you're going to come back so the more helpful they are to you the more likely you are to come back to them and this is called the facebook go program so if you are interested in spending at least seven fifty per month on facebook ads for the first month you can get your own dedicated account manager who will help you to set up your campaign they'll help you look at your goals, figure out how much money to spend they'll even look at your creative and all of that stuff that you might need help with so this is if you google facebook go or go under face both you'll definitely find more information about this program and I know lots of entrepreneurs who've done it and they've gotten really great results and they're on the right track with their facebook ads I was going to ask does that make a difference in the effectiveness if you're in your ads in the sense of it being seen, it does not in terms of your ads being seen but they help you to really craft your content and your opt in offer or the offer that you're making because they know what works they've looked at thousands or tens of thousands of ads and they know what ads really worked best in your industry so they will they have more experience in terms of what's working than you might so you don't have to spend a lot of the time experimenting to see what's for what's working and spending money on that because they'll sort of guide you along the way so it doesn't impact company people see your ads that's determined by your budget but it does impact the effectiveness of your ads now let's talk about how much money to spend so it totally depends on your budget depends on your goals and I always say start with what you feel comfortable with if ten dollars a day is what you're comfortable with go for that that's three hundred dollars a month if you want to try more and do fifty dollars a day or even used to a dollar or five dollars a day whatever your budget is and whatever you're comfortable with is what you should be doing don't feel like I have to spend this amount of money however, if you look at your goals and let's say your goal is to grow your email list by a thousand you people this month using facebook ads chances are of you doing that's finding only five dollars are pretty unrealistic so look at your goals look at your budget and sort of see where those match and then do what works for you and the other way that you could look at it and this is more specifically if you are selling directly through facebook is to know your customer lifetime value and there's a lot of different formulas and we're not going to talk about really what this is or how to do it in depth but if you know let's say that a customer a new customer costs you eighty dollars to get and the average customer spends one hundred fifty dollars at your website it's definitely worth spending eighty dollars to get that one hundred fifty dollars custom customers of that makes sense now if your average cost them our lifetime value is twenty dollars it wouldn't make sense for me to spend fifty dollars to acquire that customer so the most basic way to do that is to look at the average order value that your customers place on average and the number of repeat sales so maybe you find by looking at your shopping cart statistics that on average people spend twenty dollars at your store and they usually come back to why some people would just shop on some people come back three times, but on average they come back to times so you take that and multiply that by the average number that they spent and then you also look at their retention time. So how long are they customer? Are they a customer for let's say in our case they usually someone is a customer for about two years it could be four years five but just for our purposes of showcasing this today let's say they come back or they're a customer for two years so you know that using this formula your average customer value is eighty dollars so if you are spending thirty dollars tio acquire a customer on facebook that's a really great return on your investment, but again, this is not something that you're going to know right away, it's not something that I would ever recommend that you start with, but it's something that you should be thinking about as you are planning out to facebook ads and doing your campaign, and really knowing how much a customer is worth to you, I think all of us can benefit from knowing that, and it is a little tricky to get to their other formulas that you can use down look at other factors, but this is just the basic to sort of get you thinking about the average order value of your customers. So, yeah, that's what we were talking about before, so if an average customer is worth eighty dollars, to you, you can definitely spend up to eighty dollars, and you would break even on that campaign, so keep that in mind as you are doing facebook ads again, it's kind of advanced, and you should do that. Maybe after you sort of see how your ads are doing, but that's something that we should all be thinking about as we're setting up our facebook ads. So what I usually recommend, if you it's kind of hard to track when you're only spending a dollar or five dollars, you probably are not going to get bad much return that you can actually track, so I usually recommend setting aside one hundred dollars, starting with that and testing and seeing what's working within down one hundred dollars, that gives you enough data that you can actually determine what is working for you or not. So that's usually what I tell people to start out with some people start out with more. Some people might start out maybe just twenty dollars or fifty dollars, but it's a little easier to track all of this and get feedback if you do at least one hundred dollars. Yes, okay, sorry, so I did want to ask, so based on if it cost eighty dollars, to acquire one customer, so you're quick pain. If you wanted to acquire fifty new customers, you multiply that by eighty dollars? Um, yes, so you're not necessarily paying that by when you're setting up your facebook as and when you're tracking. If you're seeing, for example, and I'll give you screen shots of this later. But let's say if you're targeting one specific audience on facebook and it cost you one hundred dollars per lead for that audience, and then you have another audience that you're targeting and that cost you twenty dollars per lead and you know that your average customer order value is eighty dollars. You probably would want to stop the ads that are costing you one hundred dollars per customer and do more of the ads that are only costing get twenty dollars so it's not like you would tell facebook I want to spend eighty dollars for each customer and because facebook really has no control over people by so they'll give you statistics you can see how many people have bought from that facebook at but facebook really has no control over who buys or who doesn't they just give you the data so you it's up to you to determine based on the insights that you get from your facebook ads if a customer is worth to you this amount or that amount does that make sense? Yeah so great question so I know sometimes we talked about it doesn't make sense to pay for facebook likes I would say absolutely not that's not your goal with facebook ads your goal with facebook ads should be either to get leads or sales and it's going to be less expensive for you to get leads that you're eventually going to turn into a customer than it is to get a customer who doesn't necessarily know about you to become or someone who doesn't know about it to become a customer however I don't want to get too complicated but there are ways that you can target your already existing email list and your website traffic to get directly a customer, so but but that's more of a place where you're not targeting someone you you're targeting someone who already knows you. So if someone's on your email list, you could target them with federal facebook ad and that's less expensive than targeting a new person. Who's never heard of you, and if someone's visiting your website, they already know you. They could see a facebook ad when they go on facebook and they don't necessarily have to even belong to any groups or anything like that on facebook. As long as your email address that you have in your database matches that email address that they sign up with on facebook, facebook will show them that ad. If you say you want to serve that, add to your website video visitor, so we're going to talk about that, too, but I think if you are targeting your visitors or your email list, you can turn them directly into sales. If you're targeting people who don't know, we should think about it more asked, turning them into leads and email subscribers as opposed to directly someone who is going to buy from you.