Wondering how much to allocate the budget for Facebook ads? Do you really need to be setting a budget?
Here are some tips working backwards from the revenue you need to generate from the Facebook ad campaign.
Set Target Revenue Goal
It is a thumb rule to set a revenue goal for your campaign, sounds simple for an established business or marketing professional. However, surprisingly it’s a common error marketing teams commit by skipping this core step. Instead they vaguely plan and run an ad campaign with certain budget to judge the outcome.
This approach might not be completely wrong, but the outcome must be strategized, tracked and optimized. Often people get stuck on the wrong front discussing the amount of engagement the campaign received which in no way can measure the ROI.
A better approach is to rephrase your questionmore upfront: “What is the revenue do we need to generate from the budget we disburse on Facebook ads?” It’s important to set your revenue goal for your campaign informs the ad planning process and guides you in the right direction to report the ROI or return on ad spend (ROAS).
Create custom conversion
Once you have set your revenue goal, aim for configuring Facebook Ads Manager to reflect the data you require when needed.
Firstly, install and configure the Facebook pixel totrailthe conversions and deliverclear ROI. Once the pixel is set,create a custom conversion. If you intend to set-up a custom conversion to measure eBook downloads, select Facebook Ads Manager and click Custom Conversions.Then select Create Custom Conversion. In the pop-up window, enter the URL of your thank-you page, select Lead as the category, and click Next.
Give a name to your conversion and select Create. Now every timea person viewsyour thank-you page (which leads to when he / she successfully fill out the lead generation form), Facebook will record a lead.
When you create your ad on Facebook, choose Conversion as your objective and select your custom conversion as the conversion event. Then,the entire campaign is built around to accurately attribute ad spend to lead generation.
Create Ad Campaign in two parts
When you estimate cost per leadyour target crowd, ad creativeand funnel strategy will reflect a greater impact on the outcome.
Rather thandirecting the cold traffic directly to an eBook, use content to induct your prospects before requesting their email address which can be done in two steps:
- Send cold audiences to a high-quality blog post
- Retarget blog readers with your lead magnet
Monitor Results & Fine-tune ad campaign
Once the ads have been run for a stint and conversion data has been gathered, go to Ads Manager to view your costs. To view the relevant data, you will have to configure your columns to show custom conversions. Click the Columns button on the right and select Customize Columns from the drop-down menu.
In the middle pane of the Customize Columns window, select the check boxes for the columns you want to add to the results table (on the right).
After you make your selections, select Save as Preset in the bottom-left corner and click Apply at the bottom right.
If you added the Book Download and Cost per Book Download columns to your results, you can see how many leads you generated and calculate the cost per lead.
Streamline Ad campaign
Now that you have designed a Facebook ad budget based on a revenue goal, there are some moreways to improve the results:
- Double down on the cold audiences that perform best
- Create lookalike audiences from generated leads
Facebook will use a combination of data points to target people who are like the people who filled out your form.Before you create a lookalike audience, you’ll need to create another custom audience of people who successfully completed your custom conversion event.
After you create your custom audience, go to the Audiences section of Facebook Ads Manager. Click Create Audience and choose Lookalike Audience from the drop-down menu.Then choose your converted audience as the source. Adjust the other options and click Create Audience.
The key takeaway is that Facebook ad budget should be based onyour bottom line. The tactics above are best suited for direct-response advertising, but if you have a branding or awareness goal, you can use a similar strategy to hit your numbers.
The added benefit of building your Facebook ad budget this way is that it creates a culture of measurement and optimization. Once you have reached your breakeven point for profit, look for opportunities to improve your margins by reducing cost per lead.