How to Set an Instagram and Facebook Ad Budget

An ad budget is set not by asking "how much can I spend" but by asking "what does one customer earn me". From the value of a customer you work out the acceptable cost, and from there the number of results Meta's system needs in order to learn.

Last updated: · Nitec Agency
00

In short

  • Calculate the budget backward from the goal: customer value, acceptable cost, number of results needed.
  • The ad budget is paid to Meta; the agency fee is a separate item.
  • The first month is a test month: you learn which audience and which creative work.
  • Refresh the creative before raising the budget; the ad itself is what changes the result the most.
01

Working backward from the goal

  1. 1

    The value of a customer

    Write down the amount you are left with from an average sale or from one customer. If you have customers who buy again, factor that in too.

  2. 2

    Acceptable cost

    How much of that amount are you willing to spend to win that customer? This figure shows the most a single result can cost you.

  3. 3

    Number of results needed

    According to Meta's guidance, an ad set needs about 50 results per week to complete the learning phase. Multiply that by the cost per result and you get the weekly test budget.

  4. 4

    Reality check

    If the resulting figure exceeds your budget, scale down the goal: start with a cheaper result, such as a message or a form, instead of a sale.

02

The ad budget and the agency fee are separate things

The ad budget is paid to Meta, directly from your own card. The agency fee covers setup, creative production, management and reporting. When you get a quote, make sure the two are written separately.

The ad account should be opened in your name and the admin rights should stay with you. When you change agencies, the account history and the pixel data come with you.

03

What to expect in the first month

The first month is a learning month, not a sales month. This is when you learn which audience, which image and which sentence work. Splitting the budget across a few ad sets and letting each one collect enough data teaches you more than putting all of it into a single ad.

Changing the budget, the targeting or the creative too often in an ad set that is in the learning phase sends the process back to the start. Wait for a few days of data to build up before you decide.

04

Look at the creative before raising the budget

What changes the result the most is the ad itself: the image in the first three seconds and the first sentence. In an account that runs ads with the same two visuals for months, the cost rises over time; the fix is usually to refresh the creative, not the budget.

That is why it helps when the team that manages the ads and the team that shoots the video are the same: the person who sees what works in the data also writes the list for the next shoot.

Frequently asked questions

What is the minimum budget for Instagram ads?

There is no single right figure; it depends on your goal and on what one result costs you. Do the math backward from the value of a customer.

Is the ad budget included in the agency fee?

No. The ad budget is paid to Meta from your own account; the agency fee is separate.

How long does it take for ads to start working?

The first month is a learning month. Once setup is complete, the ads go live; in the following months the creative and targeting are updated based on the data.

Can I advertise with a small budget?

Yes, but the goal has to be chosen to fit the budget. With a small budget it is sounder to start with cheaper results such as messages, forms or profile visits instead of sales.

Can I run ads without a website?

Yes. Ads aimed at messages, forms or profile visits work without a website too. For sales tracking, a website and pixel are recommended.

Related pages

Jewelry ⟶E-commerce ⟶

Other guides

Keep reading