You know your business should advertise on Facebook, but you want to make sure you maximize every penny and turn an increasingly healthy profit.
How can you set yourself up for success?
Here are a few ad spending best practices I can recommend for you.
Know the numbers
How much is a new lead worth to you? How about a new customer? What’s the lifetime value of your customers?
Knowing these numbers is critical to approaching your next advertising campaign with a level head.
If your business is relatively new, you may not know these numbers right away. Take an educated guess, and revise those numbers as real data comes in.
Have a history of customer data? Then these numbers should be easy to find.
With these numbers at hand, you can be smarter about your advertising budget.
Do the Math
All those years of hating maths at school will finally come in handy!
A great starting point for your advertising budget is to target a 200% return on your ad spend (ROAS). If you can triple your investment, you’ll be in a very healthy position.
Of course, reaching that benchmark (then exceeding it) takes time and experimenting with your campaigns. By continuously testing your ads, landing pages, and follow-up email messages, you’ll turn your efforts into winning campaigns.
In real dollars, this target result means that if the value of your customer’s first purchase is $300, then you can spend up to $100 to acquire that customer and see a 200% ROI.
If it takes 20 leads to turn into one customer, then you can spend up to $5 per lead ($100/20).
And if your landing page has a 20% conversion rate to become a lead (one in five visitors to your page opt-in), then you can spend $1.00 per click ($5/5).
Start Smaller, Test, Then Scale
No matter what your budget is, don’t start spending your maximum amount from Day 1. Since your advertising goal is based on conversions, Facebook’s algorithms need time to work.
If your daily budget is $100, start with $30 for a few days. Seeing decent results? Then bump it to $50 for a few days.
Not seeing the results you want? Experiment with aspects of your ad and landing page until you do.
Scale up your ad spend as you continue to monitor the success of your campaigns.
Use Your Ads to Promote Sales, Not Just Lead Opportunities
Be sure to target some of your ad spend towards your sales pages.
Lead generation is important for the long-term health of your business, but profits come from making sales.
Don’t be afraid to target ads directly to a sales page.
Even if they don’t buy, you’ll still add visitors to your Custom Audience for future remarketing.
Hopefully this has been helpful.