With over 800 million users on Facebook, you could really run through your budget fast! If you aren’t sure how to manage your budget, or have never created a Facebook Ads campaign before, this post is for you.
Facebook Ads Pricing Management
Before going live with your first campaign, there are a few areas and terms you must perfectly understand, which Facebook has outlined and we have listed below.
CPC vs CPM: Determine if you want to pay on a cost-per-click (CPC) or cost-per-impression (CPM) basis- Daily Budget: Set the maximum amount you want to pay each day – once you hit your daily budget your ad will no longer show
- Bid Price: Bid prices fluctuate often. Set a bid within or above the suggested range, and check your Ads Manager often to update it when the suggested range changes
CPC vs CPM: Determine if you want to pay on a cost-per-click (CPC) or cost-per-impression (CPM) basisYou can see a screenshot of these areas to the right, and where they are shown in the Facebook Ads campaign setup.
Recommended Facebook Ads Tips
- CPC vs. CPM – It is recommended that you always create your ad campaigns on a CPC model. This way you are guaranteed to pay for ONLY CLICKS, and you will also be able to run through your collection of ad copies and see which people are actually clicking, without having to pay for the impressions they are still getting. The better your CTR when bidding on a CPC model, Facebook will lower your CPC rate.
- Daily Budget – If you are first starting out, it is recommended that you stick with a $10-$25 daily budget. When running ads on Facebook you can run through your entire budget very fast. Keeping your campaign budget small in the beginning will only help with cost management, but also getting enough traffic across your variation of ads, and it may also improve your CPC rates if you are getting higher click through rates.
- Bid Price: When you create an ad campaign, Facebook will give you a “Suggested Bid”, which is usually quite high. It’s recommended to start your campaign somewhere in between their suggested price. As your campaign continues to grow and generates a higher click through rate, Facebook will automatically lower your cost per click amount.
- **BONUS TIP ** – Facebook advertising is unlike any other banner advertising. You will see a massive amount of impressions going through your ad campaigns, but not as many clicks. It’s extremely hard to ever have an ad campaign with over a 1% click through rate (with thousands of impressions served). I keep stressing how important a high click through rate is. Depending on your type of offer or ad campaign, you will want to aim for a .20-.30% click through rate. This is NOT 20% or 30%, but 20% or 30% of 1%.
The best way to understand Facebook Ads’ bidding and click through rates, is to setup your first ad campaign and getting used to their system.
This post is part 4 of a 7 part series on creating your own Facebook Ads campaigns.
