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Media and Communications

Facebook Advertising Budget – How to plan?

Facebook Advertising Budget – How to plan?


Hey, welcome! This is just an ad hoc live session where we will discuss one very interesting topic which is how much should I budget for Facebook advertising. This is one of the most frequently asked question coming from our clients as well as our class participants, especially for those who are just about to start to plan the go for Facebook advertising usually most of the people will have this question, which is how much is enough? How much should I just put aside for Facebook advertising
and what should I be expecting, and how should I measure? A lot of questions
actually followed by this very simple question however let’s take a look at how should we really define and how should we find a good balance of how much you spend and how much is enough? For those who are watching this live
session, welcome! This is Jason, I’m from Tribeup. Tribeup has two parts of businesses, we manage Facebook Ads campaigns for clients and at the same time we also run classes teaching people effective Facebook advertising. we have been doing this, I mean as an agency since 2010, and as an Academy since 2016. So basically this is a series of Facebook advertising FAQs where we want to put together to help people better understand Facebook advertising before we jump right into whatever you know the Facebook advertising whatever you call it it’s like you know it’s kind of like a thing that a lot of people kind of nervous about but it’s really not that complicated, it’s quite straightforward. So back to the question, how much should I budget for Facebook advertising? Now the way I will answer this question if you are my client if you are in this meeting, I will be asking: how much do you wish to make? Put it this way, whatever advertising it is not just Facebook advertising whatever advertising it is we always come back to the return on advertising spent because that’s the KPI and that’s the benchmark that you should be paying a lot of attention into, say for example your ROAS is what is return on advertising spend? How much are you getting back in return by the amount that you’re spending? So say for example if you’re spending a hundred… you’re spending RM100 and then in profit you get back RM150 So that’s in that’s you know if we I mean if you calculate by ROAS that’s RM150 divided by RM100 that’s our ROAS of 1.5. Now 1.5 is actually golden. Put it this way, in my opinion any advertising that brings you back ROAS 1 is good. So if you’re spending RM100 to get back RM100 in profit, you are actually golden issued you should drive all the way, why? You see you are not getting this RM100 back in return after you spend this RM100. You’re not reaching only one person which you know in return you get RM100. You’re probably reaching another thousand people, ten thousand people which they have seen your advertisement but they are yet to become your customer. So that’s one part which I call them the unconverted prospects At the same time those people who bought from you, I believe for most of the businesses, for these people who become a customer you have your own way to actually increase your customer lifetime value, to cross-sell to upsell to whatsoever to increase the amount that you’re getting back from each customer. So you need to look back at your customer lifetime value, if the CLV is good then of course everything is good. The next thing that we will be looking at is the referrals. So if you provide good services and good product to all these customers that you have converted of course the word of mouth will help you bring in more people. If you are not even getting ROAS 1 which is return on advertising spent=1, okay you
need to look at all these other considerations which is your unconverted prospects will bring new future sales because not everybody will need your business right now as we are looking at your advertisement, especially when it comes to Facebook, I mean almost nobody will buy from you the first time they see your ad, so it’s very important to have that in mind. So you also need to work on your customer lifetime value which is the repeat sales, as well as your referral, which these are the few aspects that you want to take into your consideration. So in my opinion, as long as you are having ROAS of 1 or more than 1, you should drive your budget all the way. But yet again of course we do understand that when it comes to new businesses or whatever businesses where they are new to Facebook they need a benchmark to start. Now when it comes to Facebook advertising the minimum spend is RM3 a day Now we are still maintaining at RM3 per ad set, which means if you are really conservative you can spend as low as RM3 a day to kick-start. I strongly recommend that you at least kick start something because from there you probably sale… I mean, I would say RM3 is a bit too low let’s start with maybe RM10 a day and then from there you have a better you need to work out the funnel. You see
a lot of times we are not able to just come in and pluck a number for you because you really need to look at, let’s say after you advertised for awhile what is the funnel like, so say for example you need to you need to get X amount of reach, by reaching maybe a thousand people and then to get a hundred people to click to your website out of which you would get one conversion. So in order to get 1000 people you need to spend how much, we always will actually run some tests and at least some test campaigns to come out with the data and then eventually with this one customer are we paying off with
for the amount that we are spending to get these 1000 people to see our advertisement, so that’s how we derive. There is no right or wrong answer I would say at the moment because Facebook advertising is getting more and more expensive, not just because is actually powerful it’s also because everybody is jumping into Facebook advertising because it’s really the place that you need to be there to find your customers. Put it this way we have 30 million population in Malaysia on Facebook users itself we already have 25 million. So the question is now everybody is advertising now the question is how do you advertise effectively. That’s why if you are new to Facebook advertising and if you have friends who are new to Facebook advertising please share this with the. And we will have more and more live sessions like this coming up, I hope to do more often because previous weeks we have been very busy. In fact we have just soft launched our online class which is it’s a very specific class – as a first class it’s a very specific class for beginners. It’s called Facebook advertising fundamentals for beginners I’ll leave a link in the comment later, I’m actually, we are giving away a very special exclusive launch 50% discount. It’s a self-paced class it covers important fundamentals to help you get started only if you’re new even though if you’re not new you can actually go in and take a look at the you know the syllabus covered, if you think is this worth it please share with your friends. I would do more
sessions and of course as usual we will like to welcome questions you can either drop me a message or you can actually just comment below and we will cover your questions in our future live sessions. I hope to see you again very soon thank you for watching remember to click follow and get notification so that you’ll be notified whenever we go live in the future. We talk soon, thanks!

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