As the owner of a facebook advertising company, one of the most common questions I get asked is “how much should I be spending on Facebook and Instagram ads?”
The answer isn’t straightforward, as the perfect advertising budget can vary significantly depending on your business type, campaign objectives, target audience, and more.
However, by taking the time to test different budget levels and analyzing performance data, you can determine the ideal range to operate within.
Why Testing Different Budgets Matters
When running ads, it’s tempting to assume that higher budgets automatically equal better results. But that’s not always the case!
I’ve seen businesses waste money by overspending on Facebook and Instagram ads that had already reached maximum efficiency at lower budgets.
The key is finding that “sweet spot” where you are getting the most optimal return from your ads before incremental budgets start producing diminishing returns.
How My Facebook Advertising Company Tests Budgets
My agency generally starts new Facebook and Instagram advertising campaigns at modest budgets and then actively tests higher and lower variations. I’d recommend a similar approach for DIY advertisers:
Start Low
Begin campaigns at $10/day for the first 3-5 days and look at cost per result (purchase, email sign-up, etc) metrics. Low initial budgets allow the Facebook algorithm to gauge performance before spending more.
Try Different Increments
Next increase budgets by 50-100% to $15-20/day. Run for another 3-5 days before comparing metrics again.
This reveals whether more budget consistently improves performance.
Analyze Data
Table 1 shows hypothetical examples. Campaign #1 achieved best cost per result at $15/day, suggesting optimum efficiency at that budget level.
However, Campaign #2’s metrics continued improving with more budget, justifying further increases.
Table 1
Expand or Maintain Budgets
Based on analyzing metrics from budget tests, you would then:
- Maintaindaily budgets around $15 for Campaign #1
- Expanddaily budgets further for Campaign #2
Key Optimization Takeaways
Keep these tips in mind when determining ideal Facebook and Instagram advertising budgets:
- Test extensivelybefore blowing big budgets
- Budget more for outperforming campaigns
- Adjust budgets down if metrics plateau
- Be patient and let data guide budget decisions
Staying adaptable and keeping a keen eye on performance analytics as you test different budget levels allows you to maximize the efficiency of your Facebook and Instagram ad investment.
Contact my agency if you need help determining ideal budgets or want to discuss launching new high-performance campaigns!
