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    How to decide the Minimum Budget for Facebook Ads in 2022

    By Abhishek A Agrawal
    January 5, 2022
    Table of Contents

      Are you aware that in 2022, Facebook is expected to have 5.64 billion users worldwide?

      That’s like almost 11 percent of the world’s population!

      Imagine reaching all those new potential customers with Facebook ads in 2022! Feels like a dream *sigh*

      But, What must be your Minimum Budget to plan for Facebook Ads in 2022?

      Confused about how to decide? Don’t be!

      This article –  How to decide the Minimum Budget for Facebook Ads in 2022  will help you make the right decision.

      Factors that Influence the Cost of Advertising on Facebook 

      There are many factors affecting the cost of advertising on Facebook. They include:

      • Bid:  Price you pay for the auction of an ad space on Facebook. It can be either set manually or automatically.

        So, as the bid increases, so does the probability of  your ad being shown to your target audience.

      • Quality and relevance of your ad: An estimate of how interested a person is in your ad.

        Facebook calculates this based on your E-Q-C scores

        • Engagement,
        • Quality,
        • Conversion

        As the Scores ?, the cost ?

      • Timing: Facebook ads can be more expensive at certain times of the month, day or even the hour.

      • Target Audience: Demographics that affect your Facebook ad costs are

        • Location,
        • Gender,
        • Language,
        • Interests,
        • Behavior,
        • Connections

        Also, the more marketers targeting the same audience, the higher the costs.

      • Time of the Year:  Competition between the marketers is high during

        • Year-End
        • Summer
        • Festival
        • International Days
        • Black Fridays
        • Cyber Mondays

        This leads to an increase in the cost of your Facebook ad.

      • Placement of Ads: You can place your ads in multiple ad spaces, namely

        • Facebook’s desktop newsfeed
        • Facebooks’ mobile newsfeed
        • Instagram
        • Audience Network

        facebook ad places

        As your competition increases, so does your ad cost.

      Setting up your Facebook advertising budget 

      There are 2 ways to setup your budget:

      • Campaign Budget: helps you set up the budget for your entire campaign at once. Facebook then divides it among the ad sets in real-time as and when the best opportunities are available.

        Advantages:

        • Simplifies the campaign setup
        • Reduces the number of budgets for you to manage manually
        • Gets you the maximum results from your campaign at the lowest cost
        • Works best if you’re flexible with how the budget is spent across ad sets
      • Ad set Budget: set up at the ad set level individually and gives you more control over delivery within specific ad sets.

        Preferred in case of:

        • Mixed optimization goals and bid strategies, or
        • Large differences in audience size between your ad sets.

      Further, these Budgets can be spread over:

      1. Daily Budget: Average amount spent on an ad set or campaign each day. Spending roughly the same amount per day helps you get consistent results.

      2. Lifetime Budget: Total amount spent over the entire run-time of your campaign or ad set. Best suited if you have limited aggregate budget, but need a flexible daily budget.

      Small Facebook budget?

      You  may wonder if you can start your ad campaign with a small budget.

      Well you most definitely can!

      Initially, when you are experimenting, you can start with a small budget. 

      You won’t get incredible results with it but you can surely gauge the outcomes.

      Once a small budget campaign gives you a good result, it’s a sign for you to scale on that and get good returns.

      Besides this, you can consistently deliver your ads with the minimum budget requirement given by Facebook, which is determined by:

      • Business vertical
      • Budget type
      • Buying type
      • Bid strategy
      • Optimization
      • Currency 
      • Schedule 

      5 best practices to minimize your Facebook ads budget :

      Easily minimize your Facebook ads by following these best practices :

      1. Allocate enough budget for your chosen optimization event:

        Some events need more optimisation than others so allocate your budget accordingly. For example,  ‘purchases’  need more budget as against that of ‘landing page views‘.

        If you don’t want to increase your budget, it’s better to opt for easy and cheap events.

      2. Keep up the bare minimum:  For example, if you choose an ad-set type budget and get charged for impressions, then you must allocate at least $1 per day for your daily budget.

      3. For the cost cap bid strategy, your daily budget must be 5 times the cost cap amount: Cost cap is the average amount delivered over the campaign lifetime. To maximize the results, it dynamically bids as high as needed.

        So, if cost cap =  $5

        then, your daily budget must be = $25

      4. If you wish to decrease your lifetime budget,

        new amount must be >= (amount spent so far + 10% amount spent in past 2 days)

        For example, if

        amount spent so far  = $300

        amount spent in past 2 days = $100,

        10% of $100  = $10

        So, the new budget amount must be at least $310 (300+10)

      5. Be cautious when you decrease your budget near the end of the day. This is because the system falls short of time to apply new settings. For example, if you decrease your daily budget from $200 to $100 at 5 PM, the system may have already spent more than that. Or, it may not get enough time to adjust and slow down delivery.

      Follow the above 5 best practices and easily start running your Facebook Ads with a minimum budget as low as a dollar a day!

      Besides minimizing your Facebook ad budget, you can also optimize it to reach the correct audience and get the most out of your campaign. For example, running a birthday discount ad helps you reach people celebrating their birthday or anniversary, which generally has a high conversion rate. You can also use Facebook’s Lookalike Audience tool to create an audience similar to your best customers. This tool helps you find people who are more likely to convert and hence, cuts down your ad spend.

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      Facebook boost budget 

      Facebook boost budget is the simplest way to expand your reach with a few clicks and a small investment.  It helps you run ads with a low budget.

      Find out which of your posts are performing best and just run a basic ad for them. 

      You can set your budget depending on

      • Size of your target audience, or 
      • Number of actions required.

      Things to consider when finalizing the budget

      Now I hope it is easy for you to decide the minimum budget for your business after reading this article and understanding the various aspects of Facebook Ads. 

       However, I urge you to take into account the following factors before arriving at any decision

      • Nature of your business,
      • Outcomes expected,
      • Total marketing spend,
      • Percentage of total marketing spend that you plan to use for Facebook ads,
      • Time and duration of your ad, and
      • Your optimisation strategy

      FAQs about minimum budget for Facebook Ads

      Is $5 a day enough for Facebook ads?

      Yes. In the initial stage of starting with Facebook ads, $5 a day is a good amount. This helps you test your desired results with the bare minimum. You can easily scale up once you get the results.

      How much should a small business spend on Facebook ads?

      A small business should spend an amount proportional to the results expected.
      Many of the small business companies allocate 1-5% of their sales revenue for Facebook ads.

      How much do Facebook ads cost monthly?

      Facebook ads can cost monthly from $30 ($1 per day using boost feature ) to 5-12 % of the revenue allocated to your marketing budget.

      What is the recommended daily budget for Facebook ads?

      The recommended daily budget for Facebook ads varies depending on :

      • Business
      • Target audience
      • Budget allocation, and
      • Revenue generation.

      It may range from 5$ to 500$ or even more depending on the size of your business and the investment in social media marketing.

      How much does a Facebook ad cost per day?

      A Facebook ad can cost as low as $1 per day. The upper limit depends on the budget allocated.

      What is the Minimum Daily Budget for a Facebook ad?

      The minimum daily budget for a Facebook ad is $1 (using the boost feature)

      What's the minimum budget for Facebook ads?

      The minimum budget for Facebook ads is around $30 or 5-12% of the sales revenue generated by the business. It is advisable to plan the budget for:

      • New Business : upto 12% of the sales revenue
      • Established Business :  upto 5% of the sales revenue

      How much budget do I need daily for Facebook remarketing?

      Author - Abhishek A Agrawal
      Abhishek is the founder of Integrately, CompanyHub, and Dreamwares. He is passionate about technology and entrepreneurship. He is always looking to leverage technology for the growth of the business. He has a deep understanding of how businesses work and uses this knowledge to build products that help entrepreneurs grow their businesses.
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