Advertising Budget

Set a budget
So you have created a great ad that looks beautiful, has the right format and will get customers doing what you want them to. Before you start advertising, make a plan of how much you’re prepared to spend per day on your Facebook campaign. It’s also wise to set aside an initial initial amount of money on the testing phase – ie before spending on what you know what type of ads your audience responds to.

Choose a bidding strategy
When you set up an ad you can choose how much you’re willing to pay for a click. Normally, the more you pay the more impressions your ads will get. Staying close to the max bid is usually wise, but you may want to test different strategies. Facebook can help you choose this or you can set this yourself manually.

Choose a cost model
There are two different cost models to choose from: CPC (cost per click) and CPM (cost per thousand impressions). Choose the one that works best for your ad campaign. This is explained in detail later.

But how do you know that it is working?  How do you check the results of the ad for future campaigns?  This is where analysing the ad results comes in.

What is CPC, CPM and Cost Per Action?

There are four paths to getting your ad noticed and each of these prompts a different outcome.  Cost per mille (CPM) is where you want views and will pay for impressions – this is ideal when you want your ad to be seen and is great when you have created a specific audience for it.

Optimised CPM (OCPM) is an addition to this where you want and pay for conversions, such as downloading an e-book or signing up for an email campaign.

Cost per clicks (CPC) is when you want people to click something on the ad and this is what you pay for.  It is a great start up strategy to learn about what works for your business.  Finally cost per action (CPA) creates actions such as installing an app, taking up an offer and this is what you pay for – so you need to have something of this nature to offer to use this type of ad.


Pros and cons of bid management options

In Facebook advertising, there are two options with regards to bid management – manual and automatic.  AdWords is an example of a system that uses manual bidding, where a person needs to manually adjust the advert and its keywords.  The big advantage of this is that you can quickly alter an ad if something about it isn’t working and you have great control but this can also be an issue.  It can end up using a lot of time and may not work well as too much data can lead to confusion.

The other option is automated bidding and Facebook uses this bid management system.  The system automatically bids for the required outcome and can effectively be put into place and left to get on with it.  You still need to monitor the ads to ensure everything is going to plan but they are much less time consuming than manual systems.

5-bid management Screenshot_1

If you’re not an expert it’s better to use the automatic bidding and optimization system suggested by Facebook, also known by the name of oCPM (Optimized CPM). Once you’ve run some campaigns and have a better idea of results from the data accumulated, you can start playing with manual bidding, specifying how much you’re willing to pay for each click or for every 1,000 impressions. In some cases this can be really effective to lower the cost of your advertising, but it requires experience and some expertise.

Reporting tools

To better understand how your ad is performing, Facebook have a number of reporting tools to use.  These can be found under the Ads Manager and allow you to customise the data that you view to understand the results coming from the ad.  From the columns of information to the type of graphics and tables produced from the data, there are a number of different customisation options that can be used.


Within Ads Manager there are a number of metrics that are used to help understand the data.  These include performance, which can be further divided into reach, results, impressions and frequency, while engagement includes page likes as well as page and post engagement.  Other areas to study include events, apps and videos while clicks can also be customised to find the relevant details.


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