How Much Should I Spend on Facebook Ads?

“How Much Should I Spend on Facebook Ads?” Here’s My Formula.

It’s this question that NO one seems to have an answer to. Even I tried to avoid it since I couldn’t stomach the idea of anyone shelling out hundreds of dollars in case their investment didn’t pay off.

But it can’t be avoided. Everyone wants to know: “How much should I spend on Facebook ads?”

How Much Should I Spend on Facebook Ads?

Up until now, I’ve always answered with a watery, “well that really depends on a number of things…” I could sense clients’ eyes glossing over at the thought of having to do some math to figure out their budget.

Well today you’re going to find out exactly how much you should spend on your Facebook ad campaigns.

Nothing has really changed; your investment in ads still depends on a number of factors, particularly how much revenue each customer brings in and how good you are at converting subscribers to customers.

But the difference is that I’ve done all the math for you in a handy Google spreadsheet. All you need to do is enter a few of your own numbers and you’ll see exactly how much you should be spending on ads.

Click here to grab the spreadsheet for free, and then watch the video below on how exactly to use it.

YouTube video

Here are instructions if you want to dive right in without watching the video:

(You’ll need the link to the spreadsheet first – get it right here.)
  1. Export or make a copy of this doc (File > Make a copy) so you can manipulate the data.
  2. In cell A10, input the price of your product or service.
  3. In B10, input your conversion rate (the percent of your subscribers who become customers or clients). A 2% conversion rate should be written as 0.02, 0.5% as 0.005, etc.
  4. Input 500 in C10.
  5. Input 2.5 in D10.

After these steps, you’ll see approximately how many new leads you’ll generate (E10), how much revenue those leads will bring in (F10), and what your return-on-investment should be (G10) after spending $500 on Facebook ads.

Thinking about spending more or less than $500? Fiddle with the amount in C10 to see how those different investments will impact your ROI.

Now this is very important:

You’re only guessing about your conversion rate and your cost-per-lead generated from Facebook ads. If your guesses are completely off, then your revenue and ROI numbers will be very, very different from what you see on the spreadsheet. (If you don’t quite understand what I’m talking about, watch the video above. I don’t recommend you use this spreadsheet without watching the video, but I know many of you will anyway! You’ve been warned.)

You know I want to answer your questions in the comments below.

It’s one of my all-time favorite pastimes, aside from watching Master of None on Netflix. So let me know what you think of this formula and what if any questions you have about it!