Bob Milliken

I continue my series on Facebook marketing today with a discussion on how to be smart with your Facebook budget.

How Much Should I Spend on My Facebook Ads

One of the great things about Facebook Ads is that you can set not only how much you are willing to spend per day but also how much you are willing to spend on any single click on your ads.

While this flexibility is good news when it comes to finding the right audience, it also adds to the challenge somewhat as you now have to decide how much you should be spending on your ads. With such flexibility there’s a whole lot more to think about!

How do you calculate this and ensure you get it right?

Working Out Your Conversion Rate and Profits

The first thing to do, is to calculate what your precise profit is each time you turn a visitor into a customer. What are your overheads on each product (your ‘cost of goods sold’) and what is your asking price?

Next, ask yourself what your conversion rate is. For every 1,000 people who visit your website, how many people buy a product? It might be one, it might be .01 or it might be 50. Whatever the case, this will now allow you to work out how much each visitor is worth to you.

For example, f you have 1,000 visitors and 2 of them earn you $30, you’re making $60 per 1,000 visits. That means that your visitors are worth 6 cents each to you. That in turn means that you can afford to pay 6 cents per click and guarantee you will breakeven. If you pay 5 cents per click, you should be guaranteed to make a profit.


Not so quick. There are a few complications and considerations that make this a little less straightforward than it may initially appear.

For starters, you need to consider what your ‘customer lifetime value’ is (CLV). In other words, some customers might order more than once and that means you can afford to pay a little more.

Of equal importance is your cash flow. You need to save a little budget in order to experiment with things like targeting, wording and split-testing to get the perfect conversion rate.

Your Take away

If you have been following this series on Facebook, you should by now have a clear idea who your audience is. Experiment with different features until you find the combination that fits within your budget and leads to the most conversions.

Of course, every good marketing plan is not made-up of a single action, but rather of several related actions that all work in concert with each other. Call us, we’d love to help you!

Bob Milliken is a master marketer specializing in helping businesses achieve outrageous levels of success. Bob can be reached by phone at 604.270.1730 or by email at .