In an increasingly pay-to-play social media market, joining a competitive advertising environment such as Facebook’s can be quite daunting. This is especially true for small businesses or agencies that don’t have a large wallet to draw from.
We are here to reassure you that when joining the social media advertising world, you have as much control as you wish in your budget for ad campaigns. But, it is important to be educated about all of your options to make the best decisions for your business and your budget.
1. Select your advertising objectives
Facebook gives you a variety of choices when deciding to run an ad with their social platform. You can post a photo, show a video, boost a post, or promote your page or app. So where do you begin?
The first step in the Facebook advertising wizard guides you through picking your business ad objectives:
Source: Facebook Help
Understanding each of these objectives is essential to running an ad on Facebook since the objectives determine how you pay for your ad campaign.
Source: Facebook Help
For all objectives, it is possible to just pay every time someone sees your ad (also called an impression). This is billed at a CPM (cost per 1,000 impressions). For many of the objectives it is also possible to pay only when a specific action takes place, also known as “cost per action.” These actions include page likes, offer claims, mobile app installs, or link clicks.
Example: You chose the objective “Promote Your Page” and instead of paying for the amount of impressions your ad received, you could choose to pay for Page likes and only pay for when somebody actually clicks to like your Page.
2. Select your ad budget
There are two types of ad budgets to choose between: daily or lifetime budget.
Lifetime Budget: your ad is for a specific campaign running for a certain amount of days. This way (depending on your bid) your budget will slowly diminish over your chosen timeframe.
Daily Budget: your ad is for a campaign that will run consistently over an unspecified amount of time. For the “Promote Your Page” ad example, the daily budget will manage how much Facebook should be spending each day to acquire new likes.
By setting these budgets, Facebook is told by you to not exceed the set amount of money you have placed aside for your ad campaigns. Currently the minimum spend per day is $1, which gives you many options for controlling your budget.
Your budget is the maximum amount you’re willing to spend on each campaign you run. A bid allows you to choose how much you’re willing to pay per click (CPC) or per 1,000 impressions (CPM) [or per action (CPA)].
So while your budget allows you to control your spending at a high level for each of your advertising campaigns, your bid helps you control your spending at a granular level with each ad.
When determining your bid, you should be mindful of the advertising objective you chose earlier to decide how much you are willing to pay each time you meet that objective. In our trusty example of the “Promote Your Page” ad, you will decide how much a Page like is worth to you when you set your “cost per action” bid.
Note: You choose bids and budgets because advertising on Facebook means you must compete with similar businesses that also advertising on the platform. Providing these limitations for Facebook tells them how much you want to offer in the auction for space on a potential customer’s News Feed. For an in-depth look at this concept, check out this video:
4. Select your campaign ad structure
In October of last year, Facebook announced an update to their advertising campaign structure. This update is important to how you set your budgets and bids based on your advertising objectives and target audience, because you can only complete certain actions at certain levels of the structure.
The graphic below is best for distinguishing the differences between each level.
Source: Facebook News
We hope this overview of how much Facebook advertising can cost was helpful in understanding how to budget for social media advertising. As with any variable subject, the details will be determined by the goals you set, your industry, your budget, and the testing results of your content. For more guidance, you can read ‘How to Create Successful Facebook Ads that Convert Followers to Customers’ which we shared earlier in the year.
And for any other questions, we would be happy to answer them in the comments!
About the Author: Deanna Zaucha is the Senior Specialist of Content Marketing for Webs and Pagemodo, and also manages our social media presence. She can be found on a dance floor, or on her iPhone keeping up with trends in marketing and tech. Get more from Deanna on Pagemodo’s Blog and Twitter.