“How much should I be spending on my Facebook ads?”…It’s a hard question to answer, especially if using Facebook to build your business is a new thing for you. The Social Networking giant isn’t a young gun, being founded over 11 years ago, but it’s only now that small to medium businesses are starting to realise that they must have a presence. If you don’t spend enough, you won’t get results, and if you spend too much, you could just be throwing money into the wind with an unrefined strategy.
I’ve come up with a few points to help you on your way to a realistic budget for your Facebook ads, as well as some tips to help you get an edge on your competition.
Don’t guess – Research:
No one can afford to take the risk of guessing when it comes to their business. When you’re looking to find out how much you should be spending on Facebook, there is an abundance of information available to you that can help. Seek out your competition and see how they are performing on Facebook. If you’re lucky you may be the first out of your direct competitors to start taking advantage of Facebook ads, but if you’re in a saturated industry, you’ll have many sources of inspiration, and information, you can refer to.
If you click on the area that shows the likes on a competitor’s page, you will actually be able to tell how their likes have grown in the past week, and be able to accurately determine if they are using ads to do this. Trawling through their content will also give you an indication on how they are converting their page posts to ads. If you see their average posts have only a few likes then every few days a post pops up that has a well above average engagement, they are also spending money on boosting their content.
Know your industry:
Most business owners should be able to tell someone straight away just how competitive their industry is. If you’re a local business in a small town, an electrician in Woop Woop, for example, it’s safe to say you won’t have too much competition. But not a lot of business owners have that luxury. Some really competitive industries for Facebook ads at the moment are Health, Fitness & Supplements, Photography and woman’s fashion. Some industries that are hard to market on Facebook are B2B services, Cosmetics (hard to target due to Facebook ad policies), Multi-level marketing (again, because of Facebook ad policies), big ticket items (expensive household purchase) & course providers (private universities etc.). These are only a small portion, but should give you an indication as to where you fit.
Know what you want to achieve and how long you have to achieve it. Advertising isn’t a magic wand, so you’ll also need to have realistic expectations before you start. You don’t need to spend big to make things work, but you do need to spend wisely.
To put it into perspective, if you have a monthly ad budget of $100, you could expect to receive around 200 clicks (or likes) from your ads. $500 would get you 750 clicks & $5000 would deliver 5000 clicks. Based on this information, how many people would you need to visit your site in order for someone to convert? How much do your services or products cost? What’s your profit margin? How fast do you need to turn around a profit?
If you have the budget, you’ve got the time to make it work. But sometimes it isn’t that simple. Facebook may be your last step or last resort to turn things around for your business. If this is correct, then you probably have a very limited budget, and a very limited amount of time to get things done. If this is happening, you’re already a step behind, you start to panic and steps are being skipped. Take a step back and don’t rush into things. If you need help, don’t be afraid to ask. There are companies out there (like us!) that can help run things for you. Be honest, if you only have the budget for a few weeks and things are dire, let them know. Give them all the information and tools they need to help you.
Once you’ve done all this research on your competition and you’ve got a realistic budget, now comes the task of putting that budget to good use. Without turning this article from “Facebook ad budget forecasting” to “How to run ads,” you’re going to need to study up on what kinds of ads and approach will best suit your business.
If you’re in need of ROI, building a likes campaign isn’t going to be the best approach. You’ll need to make sure you are constantly pushing relevant traffic to your site. If you are a new company and you want to improve your branding, a like building campaign alongside boosting your content will be perfect. If you are a large e-commerce store and looking to boost your sales, Facebook’s new Multi Product Ads are going to be amazing for you. As always, if you want to discuss how Facebook can help your business performance, get in touch with our Digital Strategy Team here at SponsoredLinX on 1300 859 600.