First, a Daily budget is an amount you want to spend per day during the campaign. Your daily ad spending will not exceed this daily amount. Multiple your daily budget by 30.4 (Average Days in a Month) to figure out your monthly campaign spend. This style may be a familiar to users of Google AdWords, as the daily budget method is dominant. With this type, you can schedule an unlimited duration, and tweak it as the campaign goes on.
Second, the Lifetime budget is the total spending amount over the course of the ad campaign. The overall budget will be divided almost evenly across the entire campaign. When you are setting a lifetime budget, you will be asked to provide the starting and ending dates of the ad campaign. For campaigns that are reoccurring, you always have the option of duplicating a campaign, ad set, and ad (adjusting any settings you want) and re-run a campaign. This method is better to manage campaigns on a monthly basis.
Personal preference is to set a Lifetime budget because it’s self-allocated over the duration of the campaign, whereas Daily budgets average around a fixed amount for each day. Sometimes, you want to take advantage of the machine-learning capabilities of Facebook’s Ad services and a Lifetime budget allows for better use of funds over a set period, which for a digital marketing campaign, is a better metric. Naturally, Facebook is automatically adjusting your everyday spending, focusing, and spending more on the days with higher potential and less on days with fewer advertising opportunities.
Note: Once the budget type is selected and the ad campaign created, you cannot change it anymore. So, choose wisely.
How Do You Choose How to Optimize Your Campaigns?
After setting up the budget type and schedule, you can choose the Optimization for Ad Delivery, which tells Facebook the fundamental purpose of your ad campaign.
- For a traffic-oriented ad campaign, you can optimize the ad delivery for Link Clicks or Landing Page Views.
- If you are running an ad for website conversions (signups, subscriptions, custom conversions, etc.), choose
- For an ad campaign for app installs, choose App Install.
- For video campaign, you can optimize for
- You can also optimize for Impressions or Page Likes.
How Does Facebook Advertising Bidding Work?
As a Facebook advertiser, you will have a lot of other Pages competing with you in the market. That is where Facebook Ad bidding comes into play. It works just like an automated auction. The advertiser who bids higher has a stronger relevance score and an “estimated action rates” wins the bid, appearing in a targeted user’s news feed on Facebook.
For a newbie advertiser who just started exploring the vast space of Facebook advertising, it would be a great idea to choose Automatic Bidding. Machine learning will have automated your average bids and attempts to deliver the best cost-per-result for your campaign.
You should choose Manual Bidding only if you know what you’re doing. If you are running a traffic-oriented campaign, you have most likely set your Ad Delivery Optimization to Link Clicks or Landing Page Views. For this, you can set the maximum price per click (PPC) for your ad set. Facebook will still give you a suggested bidding range, based on your competitors and other factors, but you are free to set the bid limit as high as you wish.
Manual Bidding also gives you access to Accelerated Delivery which, if used in appropriate situations, can deliver strong results. For example, if a campaign is doing well, you can add more to your budget and use this option to speed up delivery for maximum effectiveness and quick results.
How Much Do Companies Typically Spend on Facebook Ads?
While there is no definitive answer to this, due to a host of factors such as the type of industry, the size of the audience, and ad quality, advertising on Facebook could cost as low as $0.15 per click and as high as $1.00+ per ad click.
Playing around with a low budget, at first, can help you determine how much you will need to invest in quality results. If you are just promoting content, you want to keep this number as low as possible because you aren’t generating revenue (unless you’ve optimized your content for ad monetization).
For businesses in service and product industries, you want to determine your budget based on the quality of leads and the ROI of the campaigns. For service industry clients, this can be tricky, but for websites optimized for e-commerce, ad tracking uses CPC to give you precise metrics on your return on investment.
What bidding strategy fits your advertising goals? How will you implement changes this year?