Advertising on Facebook is complicated, even when using an awesome platform like Preflect to do most of the hard work for you. This article is going to go over the major things that you need to know if you’re going to market

on Facebook successfully.

In this article we'll cover:

How much should I spend on ads? That’s the main question that we get asked by merchants who are just starting out, but even most established brands don’t know how much they should be spending on Facebook ads.

The answer is: it depends on a lot of factors. Let’s break it down. If you’re starting a new campaign, you need to spend your Average Order Value per day and around $10/day per ad.

Ad Spend

For example, if your average order value is $50, then you need to spend $10/day across 5 ads ($50/day on your Facebook ads). Based on this example, let’s create a budget for the entire month. In our budget example, we’ll assume that you found some small successes with your campaign and increased the budget by 20% in the second half of the month.

Week 1: $350

Week 2: $350

Week 3: $420

Week 4: $420

Monthly Ad Spend: $1,540

If you aren’t a Facebook ads pro, you’ll likely need some help running your ads and managing them. Most merchants hire a freelancer or agency to do this. Sometimes it works out and sometimes it doesn’t. The largest thing that you have to keep in mind is the percentage of total marketing costs that your management fees make up.

As a general rule, merchants should not spend more than 20% of their total marketing costs on Facebook ad management. This means that if you're spending $3,000 per month on ads, you shouldn't be spending more than $600 per month on management. This also means that unless you're spending more than $10,000/month on ads, you likely cannot reasonably afford to hire an agency without spending months operating at a large loss.

Having patience when running Facebook ads is one of the most important, yet difficult things to do. No one wants to waste money, but Facebook takes time and sometimes you have to spend more money than you would have liked to while you’re testing out what’s working and what’s not.

Make a Plan

When launching a new campaign, make a 30 day plan and stick to it. One month is the perfect amount of time to know if something is working or not and to know what changes need to be made in order to make improvements.

Passing judgment on a new strategy sooner than 30 days is foolish for many reasons. Namely, Facebook improves over time. Their algorithm learns from the sales you make and will improve your targeting with time. How long does this take? Sometimes 7 days, sometimes 14 days, there’s really no way of knowing for certain. The best guidance that we can give is that full optimization will never occur before you’ve earned 50 conversions with an ad set.

If you’re struggling to hit 50 conversions, you’re either not spending enough money or you need to make strategic improvements that will allow you to hit that number. Sometimes this means spending more money than you want to in order to hit this goal! If you cannot hit 50 conversions within the time frame of your 30 day plan, go back to the drawing board and try again.

If you don’t know what a funnel is, don’t worry. It’s basically the steps in your marketing process that customers go through. It starts at the “top of funnel”. This is where you’re marketing to “cold traffic” or people who’ve never heard of your brand before and are probably seeing your ads for the very first time. The “middle of funnel” consists of retargeting ads that are being shown to customers who’ve already seen your top of funnel ads. The “bottom of funnel” for most brands is Google.

It’s important to understand where Google fits in your funnel because there is a lot of confusion over this. We’ve seen a lot of cases where merchants with great-looking ads and a great website do not see great of results from their Facebook ads. When they take a look at their Google ads, sales are skyrocketing. Why is this? It’s because some customer demographics just don’t click on as many ads. They see your top of funnel ad, they see your middle of funnel retargeting ad, and instead of clicking on either of them, they decide to Google you!

Some of those sales will never be tracked by Facebook, only Google, but the trust is that many people that purchase via Google only did so because they saw your Facebook ads. That is why in some cases your Google ads and organic traffic may surge after running a new Facebook ad campaign. Being aware of this and putting each step of your funnel into the proper context is key to making good decisions.

Market Competition

Facebook’s ad market is an auction. This means that the more participants in the auction, the higher the price of advertising will climb. Merchants compete against other advertisers for digital ad space. There is a limited amount of digital ad space and there are always multiple merchants looking to target the same customers with similar products.

Facebook does not provide a lot of information on exactly how their ad auction works, but what we do know is that the best way for you to win more ad space in the ad auctions for the least amount of ad spend is to produce high quality ad content. Higher quality content will always be prioritized by Facebook because they aren’t just trying to run ads for the highest bidder, they’re also trying to show their users high quality ad content that is truly relevant to their interests.

General Seasonality

Ad markets are volatile and Facebook is no exception. Ad costs, like cost per click, change day to day, week to week, and month to month because e-commerce sales are seasonal. People are in the market for presents during the holiday seasons and merchants know this. That’s why they spend more on ads and push sales and discounts harder during November and December to take advantage of the surge in gift-giving. This means that every November and December you can expect ad costs to always increase significantly compared to the rest of the year. Higher ad costs, just like higher CPCs, will reduce ROAS while keeping all else equal.

Seasonality by Product

Products have seasonality factors as well. For example, a surfboard company will sell more surfboards in July than January. A company that sells ski jackets will sell more jackets during January than July. The seasonality of certain industries will impact your ad costs tremendously. When you’re gearing up for your industry’s “busy season”, so are all of your competitors so don’t be surprised if you see ad costs rise during those periods.

Closing thoughts on competition

When running ads, you always need to keep in mind that your metrics don’t live in a bubble. Market competition influences your ad metrics. When there’s more competition, costs go up. If your competitors are running ad content that customers like more, Facebook will notice that and give them cheaper ad costs than you. There are so many external factors that can cause costs and metrics to fluctuate that are totally out of your control. Just keep in mind that these fluctuations (especially fluctuations in performance) are totally normal. The best thing you can do is prepare for them and focus on the things that you can control!