"How much budget/day you spend on testing?" Answered


#1

So several people hit me up asking me how much to spend on Facebook ads when starting out.

Here’s what you should expect in terms of how much you should be spending and your initial ROIs. I’m going to assume that you’re selling a product at $50. I’m also going to assume you’ve already reverse engineered your marketing funnel and you have somewhat of a proven funnel.

Day 1: If you spend $100 -> expect to make back $50. So youre spending double the selling price of your product. Starting out your ROI is -50%.

Day 2: At this point, you gathered some data and you’ve optimized your campaign. If you spend $100 -> expect to make $75. So your ROI on the second day is now -25%.

Day 3: You’ve optimized your campaign even more. If you spend $100 -> expect to make 100$. Your ROI is breaking even at 0%.

Day 4: You keep optimizing. Now your ROI is profitable at +25%.

This is the general rule of thumb. Use this general guideline when you’re running ads. I see plenty of marketers getting discouraged when they don’t have a profitable campaign running right off the bat. It takes about a week or so to hit a +50% ROI after optimizing every single day.

Any questions?


[AMA] Ask Me Anything About Facebook Ads
#2

Makes all sense and seems like a reasonable thing to do.

What measures do you use for pinpoint targeting? What are some tricks when it comes to reaching the right target audience?

I saw that the desktop version of ads manager for facebook contains a lot of very narrow options, but compared to what everybody is saying targeting is still too broad and not how one expects it to be.

Does it really all come down to the facebook pixel, content and retargeting?
Let’s say I want to target companies that have attented a certain event, is there a way to do that?


#3

Hey @MyFocus, good question.

  1. If you have an email list. Make sure it’s above 1000 emails. Then split test 1%, 2%, etc lookalike audience

  2. If you don’t have an optimized pixel or an email list. Think outside the box and split test different Facebook interests. The most common interests are more expensive but if your CTR and CVR justifies it then that doesn’t matter.

  3. Make sure your pixels are properly placed (pageview, add to cart, checkout, purchase). And set whatever goal makes sense based on what you have to work with.

  4. Running re-targeting campaigns is always good practice as you optimize your pixel

To answer your question about companies that attended a certain event, you’ll have to get creative. There’s no specific filter for “companies that attended an event” so browse through Facebook filter options and test several things that comes close to what you’re looking for.

Does that make sense to you?


#4

Yeah, all makes sense and is pretty good advice, thanks for that.

Building an email list is a huge topic in its self, but once you’ve figured out how to combine it with other things that benefit the brand/business it’s kind of like snowballing.

How is, in your opinion, generating first time customers different through your ads different from running them against existing customers? Of course split testing might be an option to figure out whats working and whats not for what type of audience, but I’d like to know if you differentiate between the two at all since for one trust is already established?

Any tips and tricks on that?


#5

There’s plenty of things you can do. But it’s for sure that new vs existing customers are different types of audiences. It all depends what you want to achieve. You can do FB retargeting or email marketing. The main thing to figure out is what are your upsells and what are your objectives for these campaigns.

If you’re still unsure feel free to ask more questions


#6

sure, great advice so far!

Another thing that might be interesting for a lot of people is how ads play out once you reach a certain spending amount.

How does low budget for a long time (20$ a day) play out against big budgeting (2000$ a day)?
Have you worked with bigger sums?

Also heard once you reach a certain point, you’ll get connected to a campaign manager/adviser directly from Facebook. :slight_smile:


#7

hey @MyFocus, in terms of budget, it all depends what you are selling. If you’re selling something for $50 compared to $500…It’s going to take more money to get a conversion. As stated above, you’d need to spend 2x of the selling price in order to START off at a -50% ROI.

So if you start out with $20/day…that’s cool. Just has to make sense with what you’re trying to achieve. If your product costs $50 and you’re only spending $20/day then you’re just spreading your $ over the week. Same general rules apply though.

You only want to start spending more as you start scaling with a profitable ROI. I have campaigns running at $5000/day and $10000/day with no account manager. I use the chat support if I see anything is off and they respond within minutes!

Does that answer your question?


#8

What’s your “favorite” budget ti put on an adsets ? Lot of gurus say 5-10$ :slight_smile:


#9

@RaphaelReborn there’s no such thing as a “favorite” budget lol it all depends what your objectives are :slight_smile:


#10

Not really, was more interested in how reach scales in relation to ad spend.

Also, how does product price correlate to ad spend?

Here’s an example for you:

e-books.

Can cost 20$, can cost 20.000$. See “Instagram Courses”.

What are you referring to when you say “double the ad spend based on product price” …


#11
  1. Reach scales in relation to ad spend depends on your targeting. It’s case by case. There’s no specific number or percentage I could share with you. For example, male vs female, country, city, interest, they all have different cost.

  2. product price relates to ad spend because the more expensive your product, the more you have to spend to acquire a customer.

  3. “double the ad psend based on product price” I’m just repeating my rule of thumb in this post. I mean if your produce price is $100, you’ll need to spend $200 to acquire a customer at the beginning. That’s just a general guideline I learned over the years.

Makes sense?


#12
  • You’Re a DM & Stragetist for 5+ years and have never run ads against the same demographic with different amounts? No comparison for reach regarding small vs. big budget at all?

  • Not necesseraily. How do you know the five people that see your ad are capable of buying or not? Price is secondary, product quality decides if you sell or not.

  • No I don’t. Where do you pull that correlation from? :joy: I can aquire a customer having a 100$ product and spending only 20$.

I’m starting to think you’re purely theoretical and not practical at all buddy.


#13

first of all, I don’t really appreciate your condescending tone “buddy”. I don’t know which high horse you think you’re sitting on but have some general respect dude. keep this a friendly forum. I took the time to answer your questions, you have a problem then take it elsewhere.

That being said, if you plan on changing your attitude:

  1. Usually the low budget has better performance from what I’ve seen. Could be due to many variables. Might be FB opening traffic up to more pools to find more winners

  2. The general rules I laid out, you take that with a grain of salt. It’s a general guideline. You’re taking it too literal.

  3. The general rules I laid out, you take that with a grain of salt. You’re taking it too literal.

Have a good day my friend


#14

Yet another marketing god :roll_eyes:

Nah it’s all good buddy, go ahead “laying out general rules” to specific questions.

I’m not your friend. :blush:


#15

Marketing God? Any admins out here? Kick this rude guy out please


#16

what is ROI ?


#17

ROI = return on investment


#18

thnx for your reply


#19

pleasure! @arlind14


#20

@316Interactive Thanks for your info on Facebook Advertising, it’s been good reading for me as I am currently learning how to run FB ads effectively and hopefully become competent or better!

Currently in this situation with pixel only recently installed and v small email list. I’ve been reading a lot about creating audiences based on intersected interest groups to get an optimized 75-100K target audience.

Is this a good strategy for creating & testing accurate targeting or is there a better way?

My concern is that testing multiple adverts + multiple interest groups is going to be too expensive.