5 Things to Consider When Choosing a Social Media Ads Budget


One of the questions that I get asked the most as a social media marketer is, “How do I decide on a budget for my social media ads?” For most people, this questions seems much more daunting than it actually is.

There are 5 factors that will go into deciding on your ads budget.

1. What is your annual ads budget?

It is important to understand what your ads budget is each month. If you have allotted a specific amount for your social media ads for the year, divide that number by 12 to determine your monthly ads budget. This sounds simple enough but I’ve discovered that many business owners or entrepreneurs have never taken the time to determine an annual or monthly marketing budget.

2. How many people do you want to reach?

To give you a better idea of how far your money will go when using Facebook or Instagram ads, for every $5 that you spend to advertise locally (within one city), you should be reaching about 800-1,000 people. If you’re advertising nationally, you’ll be able to reach even more people.

Therefore, if you choose a monthly budget of $100 for your Facebook and Instagram ads, you should reach about 15,000-20,000 people each month. This does not guarantee that those people will be engaging with or clicking on your links. This number only includes the people who actually see your ads. 

3. What types of ads will you be creating?

Some ads cost more than others so it’s important to factor this in when determining your monthly budget. The most expensive type of ad is a Link Click ad. Sometimes, these ads will charge $3 or more per click-through. If the service or product that you are selling is a high-ticket item, then that rate might be affordable considering the conversion rate. Engagement ads are less expensive than Link Click ads and Reach ads are even cheaper.

So, if you don’t necessarily need to send a lot of traffic to your website each month, then you might be able to spend less each month by using Engagement and Reach ads. 

4. How many ads will you be running?

If you will be running several ads at the same time each month, you may want to have a larger budget to ensure that each ad will have enough reach, engagement or click-throughs. If you’re only running a few ad campaigns each month, then it will be possible to spend less money on these ads if you’re on a tighter budget.

5. Will you run your ads on a daily budget or a lifetime budget?

When creating social media ads, you’ll have two budget options for each ad: Daily Budget and Lifetime Budget. If you choose a daily budget for one ad, that ad will spend the amount allotted for each day. For example, if you choose a daily budget of $5 for one ad, that ad will spend $5 each day until the ad stops running. You can also run this type of ad indefinitely. Another example: Let’s say you want to increase the number of your Facebook fans using a Facebook ad. You could spend $2 per day indefinitely to continuously increase the amount of Facebook fans for your page without having to constantly create new ads.

If you choose a Lifetime Budget for an ad, that ad will spend the allotted amount by the end date of that ad. For example, let’s say that you’re hosting a Grand Opening event for your business in 3 weeks. To advertise this event, you would want to create an ad with a Lifetime Budget for the entire 3 weeks leading up to your event. 

By asking yourself these 5 questions, you’ll have a better idea of what you should be spending on your social media ads each year and month. 

Still need help with your social media advertising? Shoot us an email below to chat with us about our social media advertising services and learn more about how we can help your business grow by attracting the right customers!