How Much do you spend on Facebook?

New Member
3 0 0

Hi guys.

Trying to stop myself going insane here on our increasing facebook spend.

Just curious as to what % of your gross monthly income goes on facebook?

We are seeing some months where something like 30-35% of our gross income is spent on facebook, is this unusual? It was around 10-15% this time last year.

Thanks

 

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Hey,

We don't spend on Facebook as we get enough traffic on our paystub generator site from google.

But its tough to say that the amount you spent is unusual or not because we don't know the conversion rate and other factors.

And you can't compare % as you don't set the same campaign with the same strategies. so spending amount will differ for sure. what you should focus on is the outcome. how many conversion or leads you got from those campaigns. if it's good then spending 30-35% is not an issue.

 

Pay stubs Online| Create a Pay Stub | Free Printable Pay Stubs Online @ online-paystubs
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Community Manager
Community Manager
2400 163 352

Hi Daniel, 

Nick here from Shopify. 

There is a very good technique to find the right audience for your products and brand using Facebook ads, which will, in turn, help you determine what to spend on your ads. It is called the 3x3x3 technique. It starts off with you creating 3 ads for 3 different audiences with 3 sets of different copy/ images and a small but the same budget for each. After monitoring the results of each variable you will see some ads performing better than others, which is when you can drop off the less successful ads and raise the budget for the more successful ads that reach the best audience for you. There is a great guide for this technique to learn more which you can see here

To understand more on how much to spend on your ads, Shopify's partner Oberlo have a blog post going into more detail on it with some great tips on Facebook ads also. You can see the blog post here

Hope this helps. 

All the best, Nick

Nick | Social Care @ Shopify
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Shopify Partner
5 0 0

Hi Daniel,

Markus from Lean biz Growth.

There is no fixed rule as to what % of your revenues you should spend on Facebook ads.  

It will depend on things like what your objectives are and the stage of the business. ie, a startup looking to grow quickly might be spending 50% of revenues on Facebook where as an established company might only spend 5%.

It would also depend on what channels you are using. If Facebook the only source of traffic or do you also invest in Google ads?

So the right amount is whatever is right for your business and objectives.  

Do you know what the ROI is on your Facebook campaign?

Markus

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New Member
3 0 0

Hi guys,

Thanks for the replies - Obviously each campaign has a different conversion rate - some better than others.

However to simplify, What im asking is:

If you generate $30,000 per month from facebook leads are people out there happy paying $9000 for those sales?

Thanks

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New Member
1 0 0

All depends on how much traffic you have...

 

If you dont have enought traffic and sells will be difficult to you to find a GOOD AUDIENCE.

One you find a good audience, you will have a Really Good ROI.

With at least 5,000 clicks you have to make it...

 

If you generate $30,000 per month from facebook leads are people out there happy paying $9000 for those sales?

 

No chance. At least $90,000...

 

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Pathfinder
109 0 40

Daniel,

There are a few numbers you will need to work out before you can answer this question definitively.

The first would be your lifetime customer value, which would be the average reorder rate times the average order value. 

Second, you would need to determine your overall gross margin (before marketing costs), then multiply your gross margin times your lifetime customer value cost to get your gross margin per customer. 

Once you have that number, you will want to make sure all your campaigns are set up to segregate new and existing customers. This can  be easily done by creating a custom audience of previous customers (it can even be automated using a low-cost app) 

When determining your budget, you should be targetting a new customer acquisition cost that is 1/5 to 1/3 of your gross margin per customer. 

in other words, if LCV is $200 and your gross margin is 50% ($100/customer) then you should aim to acquire a new customer for between $20 and $33 on average. Spend less and you are likely missing opportunities. Spend more and you are likely to go broke.

It can take some time to get to the point where you can measure all this, but you should be working to get a system in place.

Hope that helps, Jeremy

 

 

 

 

 

I co-run www.soyoung.ca and document my experience in building a 7 figure brand at www.indiebrandbuilder.com
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Shopify Expert
176 0 15

Are you targeting customers that are actually interested in purchasing from you. Over the years ive seen so many of my clients targeting the same audience, in which they are already saturated. 

Web developer/Graphic Designer
christina@designsrus.us
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Highlighted
Shopify Expert
95 0 1

Excellent question. Wanted to share an in depth answer for ya.

Spend depends on your Audience Goals.

It’s imperative to grow and increase the reach for your brand on Facebook. There are several ways to think about this.

First, you've got prospecting, which is acquiring new users.

Next up is brand retention. That's going to be bringing people who have purchased back to purchase again.

Another audience goal is planning. Throughout the year, every brand has critical moments, and increasing reach throughout the year can have a positive effect at those times.

We have one client who really focuses on gifting. And so, fourth quarter is really huge for them. Meaning, it’s really important for them to say, okay, how could we increase our reach throughout the year? That way, by the time we get to quarter four, we're reaching as many people as possible.

The final audience goal is lookalikes. We want to leverage audiences to make lookalike audiences to increase the likelihood that the brand will acquire qualified users. Instead of guessing, i.e., we really think our product will appeal to people who live close to golf courses, we can say with confidence, i.e., we already have this audience of people who are purchasers and are qualified, so let’s go ahead and leverage that to, take people to the next level, find new customers and really grow the program

Today we published a blog about this if you want to learn more: https://bit.ly/2NYyQeN

Hope that's helpful! 

Kevin Simonson is the CEO of Metric Digital, a performance marketing agency in New York City that focuses on driving revenue and customers through for ecommerce business via online advertising, email and other digital marketing channels.
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