How much should a small business or a new start-up spend on Facebook? Facebook has more than 25 million small businesses using their platform to engage with current and new customers, whileactively advertise on the site. Unlike multinational enterprises, small businesses have to meticulously decide where they are going to spend their resources.
A common question our clients ask is, “How much should we spend on Facebook advertising?” and “How much time should we put into reaching customers on Facebook?” These questions boil down to a small businesses’ limited time, and smaller budget.
The reality is startups and small businesses have fewer employees, which means the numerous operation tasks are piled upon a few trustworthy workers. Its good to consider how much time— is enough time, to put into Facebook. More than that, it comes down to the bottom line. Are dollars spent on Facebook advertising providing the ROI (return on investment) necessary for it to be worth it?
We usually answer their questions with….well, questions. Because it really depends on the circumstances of each individual business. Nope, there’s not a “one-size-fits-all” answer—which is good—because when did one size ever fit everyone anyway?
What are your business goals?
Start with this: What are your business goals for next three, six or twelve months? Before you ask how much should you spend on Facebook advertising, it is imperative that you determine what your goals are. This will be a factor into the money you are going to spend online.
For instance it can be any one of the following goals:
- Grow your page fans to 100,000.
- Bring additional 20,000 visitors to your website.
- Increase your email subscribers to 15,000.
- Get 10,000 app installs from Facebook.
With defined goals, you can plan how much you want to spend online easily. Once you know what your goals are, you can log in to Facebook’s Ad Manager and use it to calculate your budget.
For instance, if you want your page to have 100,000 followers, you can choose the demographics, their interests and find out how much it would cost to have 100,000 followers.
What is your niche?
If you are working in entertainment business, you are in luck, because the cost of every click, page like, email address or other conversion events will be significantly less compared to other industries. If a studio is promoting its next major blockbuster, it will automatically start getting more engagement due to its entertainment value.
On the other side is, if your niche isn’t as exciting as the next Avenger film, that means your ad will cost more in order to see the same amount of engagement.
So if your niche is somewhat boring, we recommend that you adjust the budget accordingly.
How awesome is your website?
Having a well-designed website with engaging content does wonders when we talk about Facebook advertising.
Websites that are mobile friendly, have new content published regularly, and are designed to keep users engaged, are able to bring down the cost of advertising on Facebook. Users recognize the brand or the website that is being promoted and will be more likely to click on the ad.
Websites and landing pages that lack good design or content become an online wasteland, where users are not going to stay long, and where they won’t return again. Keep this in mind when you are planning your Facebook campaign. Maybe you should consider reallocating your budget dollars to improve the website before sinking money into other online advertising.
What’s the deadline?
In most cases, advertising on Facebook is measured not only by its performance and cost but also the time it takes to see the desired results.
Like we mentioned earlier, you need to have goals before you decide on a budget. Another thing to consider when thinking about how much you should spend on Facebook is the time. What’s the time period you are trying to working within?
If you are prepping for a launch, you must be prepared to spend aggressively if the time is short. And if you have more time on your hands, not only can you spread out your budget but also test out various ad creatives, demographics and interests before nailing the perfect ad campaign.
Comparatively, Facebook is an incredibly inexpensive way to promote your business online. Done properly, the little guys, like small businesses and startups, can easily carve out a piece for themselves and enjoy long lasting results. But before you sink in time and dollars, make sure you ask some questions about who you are and what your business goals look like.
We help our clients strategize online advertising to get the most out of their marketing dollars. Wanna chat? Get in touch here.