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How much to invest in Facebook and Instagram Ads and make profitable campaigns

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How much to invest in Facebook and Instagram Ads and make profitable campaigns

How much to invest in Facebook Ads?

The time has come to launch your advertising campaigns, you get to the budget allocation part and the first thing you ask yourself is “and what amount is the best?”

And the quick answer is, it depends .

If with this article you are waiting for me to tell you how much to spend on Facebook Ads, you are not in the right place.

But, if you want to know how much to invest in Instagram or Facebook Ads and learn how to calculate it , then stay with me until the end of the article.

Because the amount to invest depends on more variables than you think.

Normally, what is usually taken into account in these cases is the sale price of the product 柬埔寨电话号码表.

That is, if a product costs me € 100, I could estimate that at least half (€ 50) I can invest in Facebook Ads, right?

But it is not as simple as it seems and you have to take into account more elements such as:

Your sales strategy.
Your target audience.
Your experience in campaign management:
Conversion rate of your landing pages.
Now, do not worry because we are going to see each and every one of these variables so that you never go blind again

And if after reading the post you are not sure how much to spend on Facebook Ads, I recommend hiring a digital trafficker .
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Table of Contents
6 Things to keep in mind before investing in advertising on Facebook and Instagram
How much to invest in Facebook Ads?
How to know how much to invest in Facebook and Instagram Ads
Is it clear to you how you can calculate how much to invest in advertising on Facebook or Instagram?
6 Things to keep in mind before investing in advertising on Facebook and Instagram
When it comes to advertising on social networks there are a number of factors that will directly influence the budget you can allocate to your ads.

For this reason, in my personal opinion, these are the 6 things you should take into account before investing in advertising on Instagram or Facebook.

➡ What is your knowledge?
Before investing in advertising on Facebook you have to be clear about your knowledge, that is:

Have you already carried out a campaign before?
What results have you obtained?
How much budget are you used to handling.
If you are a person who is starting, I recommend that you start by investing € 1 a day to gain experience.

Articles that will help you improve your campaigns:

How to advertise on Facebook step by step

How to advertise on Instagram step by step

Because, no matter how many courses you take, how you really learn is investing and analyzing what works better or worse.

➡ What has been the performance of the previous campaigns?
If you are managing a new customer, one of the first steps is to audit the advertising account .

In this audit you have to collect all the information about the different types of campaigns carried out and the cost of the objectives of each of them.

➡ What product and / or service do you sell?
Just as important is to be clear about what product and / or service you are going to sell because depending on the product the sales funnel can vary 优酷用户.

Here you will have to answer two questions:

What is the sale price of your product.
How much is the amount you are willing to invest for each sale.
➡ What is your advertising budget?
Typically, you have an annual advertising budget or a launch budget.

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Regardless, the two questions you should ask yourself are:

How many sales do you want to get from that product?
How much are you willing to invest in Instagram or Facebook Ads.
➡ What is your conversion rate?
Before investing in advertising on Facebook it is imperative that you know:

What is the conversion rate of your subscription page.
What is the conversion rate of your sales page.
We will see this part at the end of the article, but to spend the money wisely you need to know the number of leads, inquiries, visits to the website, etc. you need to turn a stranger into a customer.

In short, you have to know how many leads you need to make a sale .

➡ What is your conversion funnel?
Here it is essential to be clear for every € 1 invested, how much you are recovering .

How much to invest in Facebook Ads?

As I told you at the beginning of the article, the answer is it depends. It mainly depends on your sales funnel .

There are different types of sales funnels, but we are going to base ourselves mainly on three:

Direct sale.
Educational content.
Direct capture of leads.
Depending on your advertising strategy and your objectives, you will have to invest in digital marketing more or less.

➡ A) Direct sale
If your ads lead directly to the sales page to buy your product and / or services.

This is usually done for impulse purchase products , that is, those that have a price below € 50 .

➡ B) Capturing leads
In this case, we would show the ads to people to download our lead magnet directly.

In this way, we filter the people who may be most interested in order to later show them the sales announcements.

➡ C) Educational content
Here what we would do is add an initial step to lead our target audience to a blog post or a previous educational video .

This funnel is longer, and is usually used when the client’s level of awareness with their problem is not high.

While the rest of the funnel would be as in the previous case.

How much to invest in instagram ads

Why is it important to know this?

Because normally the following budget percentages are allocated:

60-70% to Cold Traffic.
10-15% to Temperate Traffic.
20% to Hot Traffic.
If you really want to sell on Facebook you have to reach cold traffic and make it temperate.

With this image it will be much clearer.

how much to invest in advertising on facebook

The market is mostly made up of groups of people who do not know you, or your product.

Attracting this audience and moving it to the next phase of your sales funnel has to be your priority.

That is why it is the part of the funnel that is allocated the largest advertising budget on Facebook.

We are going to review the different types of traffic so that you have it clearer:

The Traffic Cold consists of people we do not know anything. That is, they do not know us or our products and / or services.

Budget that is usually invested: 60-70%

The Traffic Tempering is composed of people we already know somehow, but still do not know our solution.

This audience is usually made up of:

Fans.
People who interact with our publications.
Subscribers.
Subscribers.
Budget that is usually invested: 15-10%

While Hot Traffic is made up of those people who already know who we are and what we offer.

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That is, they know our products and have even bought us.

Budget that is usually invested: 15-20%

Understanding this part is essential, so if you have any questions, see you in the comments.

➡ Example of how much to spend on Facebook Ads in a launch
In life with examples, everything looks much clearer, so let’s see how much to invest in Facebook Ads to sell a Jeff Walker-style info-product .

To give you an idea, this type of release usually lasts between 25 and 30 days .

It begins with the purchase of traffic to a Squeeze Page to capture the lead with a margin of 15/20 days before starting with the sequence .

Subsequently, a cultivation sequence is made that consists of four videos that are usually:

Video 1: The opportunity.
Video 2: The transformation.
Video 3. The road.
Video 4. The offer.
The key to this type of launch is to move the target audience from one phase to another.

That is, the cold public transform it into warm so that they see the whole sequence and finally become hot so that they end up buying.

With the image you will see it much clearer.

 

In the first phase, where what you want is to get the lead of the person ( cold traffic ), you will invest 70% of the budget in Facebook Ads.

In the cultivation phase we have to try to get everyone to see the sequence (mild traffic ) and we allocate around 10%.

While in the final phase, when they already know our offer ( hot traffic ) we have to try to close the sales and for this we can allocate 20%.

How to know how much to invest in Facebook and Instagram Ads
The key moment you have been waiting for has arrived because I am going to tell you how to know how much to invest in Facebook Ads so that your campaigns are profitable.

To do this, you will have to know all these data:

What is your goal, that is, how many sales do you want to achieve.
What is the sale price of your product.
How much can you invest in each client.
How much budget are you willing to spend at most.
How many visits do you need to get a lead.
What is the cost of each visit.
What is the conversion percentage of your lead magnet.
What is the cost of your cost per lead.
What is the conversion rate of your sales page.
How many leads do you need to get a sale?
How much each visit costs us.
If you are clear about all these data, you will know what is the amount of budget that you can allocate to your advertising campaigns.

Take a look at this graphic that is sure to be clearer to you:

How much to invest in facebook ads

Wouldn’t you like to know how much each purchase costs you? Know how much you can invest at most in each lead so that your campaigns are profitable?

All these data can be known, you only have to use a series of formulas .

These are the formulas that you will have to apply:

Number of sales you want to achieve.
(€) Selling price of the product.
(€) Maximum cost per sale of each product (CV).
Maximum budget = (No. Sales x CV).
Lead Magnet conversion% (see Google Analytics).
% conversion of the Sales Page (See in Google Analytics).
No. of leads needed = No. Sales /% conversion SP).
No. of visits to the GL = No. of leads needed /% GL Conversion.
Maximum cost per visit = Maximum budget / No. of visits to the LM.
Cost per lead = Maximum budget / No. of leads.
Lead value = Sales value / No. of leads
Sales value = No. of sales x Sales Price
Benefits = Income – Costs
ROI = [(Income – Investment) / Investment] * 100
With these these formulas you will not only be able to calculate how much to invest in Facebook Ads, but you will also be able to know what the profitability of your campaigns is.

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But what I like the most about this is that if you analyze and interpret all this data visually, you can know in which phases your funnel is failing .

We are going to see some examples so that you have it clearer.

➡ What happens if the cost per click is higher than the maximum possible?
If the cost per click is higher than the maximum set, what I recommend is that you first analyze the CTR of your ads.

Although the CTR will depend on whether the ads are showing to cold, warm or hot traffic, be concerned if you are showing your ads to cold traffic and the CTR <1% .

This can mean two things:

Creatives are not working.
Segmentation is not adequate.
So, the first thing I would do is change the copy of the ads on Facebook and if you still have a low CTR, I would change the design of the ads (images, videos, GIF).

If you still have a low CTR, you are most likely showing your ads to the wrong people.

So the last step would be to change the segmentation of your ads.

➡ What happens if the cost per lead is higher than the maximum possible?
On the other hand, a fairly frequent situation is that the cost per lead is higher than the maximum that you can afford to pay.

This can happen mainly for two reasons :

Your recruitment page is not converting.
Your lead magnet is not attractive enough.
The vast majority of the time is because your page is not optimized enough .

In this case, the first thing I recommend is that you access your Google Analytics account and analyze that specific URL on the different devices.

In this way you will analyze how it converts on PC, Mobile and Tablet , because maybe some cases convert better than others.

Imagine that it converts well on PC, but not on mobile. Surely you have a problem with responsive, so I recommend that you also analyze the bounce rate .

Another thing that you should analyze is the loading speed of the web page , because if it takes too long to load it is likely that the visit will end up abandoned.

➡ What happens if the conversion rate of the sales page is lower than the minimum set?
Finally, the last part of the sales funnel should be analyzed in case the conversion percentage is lower than the established one.

In this case, the first step would be to analyze the same data as in the previous case, that is, responsive, bounce rate and loading speed.

It is also advisable to have a heat map tool to see how much of the sales page they read.

Because perhaps the problem is that the copy of the landing page is not attractive enough or that the type of structure has to be changed.

Is it clear to you how you can calculate how much to invest in advertising on Facebook or Instagram?
Remember, no one can guarantee you a guaranteed return on investment.

Now, if you can make approximations that help you know how profitable the campaigns can be.

Finally, I would like you to leave me a comment giving me your opinion about the article.

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