In this article, I’m going to offer my thoughts on how much money you should be spending on Google and Facebook ads. It’s a question we get asked all the time as an agency, and it’s not always a straightforward answer…
The reality is when you’re trying to grow your business on a small budget, investing in digital marketing often doesn’t take priority. But it should. The single most important function of ANY business is sales and marketing. Whatever your budget, you need to get your product or service in front of the right audience, and convince them to spend their money.
In this article, we’re going to break down and compare the cost per month needed across both networks. We’ll also tell you what we would recommend as your minimum budget when running ads for your business so that you can (with the right strategy) create a successful campaign without overshooting your marketing budget!
Can I start paid ads with a small budget?
The short answer is, YES! But there is a bottom. We generally find if you have below £500 in total ad spend available that you can invest month after month then it’s likely best to invest your time in other channels until you’ve scaled up a little further.
If you are in that early stage where a marketing budget is an aspiration, it’s worth looking into the ‘indiehacker’ toolkit for growth. There are a great number of online communities of people all happy to help you in your journey. Indie Hackers or Ramen Club being great examples! Achieve ramen profitability!
Though £500+ is definitely ok to get going.
But, the reality is, that paid ads are a money game, and the more you can invest, the quicker you can learn what ads, ad copy, and audiences get you the sales to reach profitability.
We’ve created thousands of ad campaigns over the years as a marketing agency, and so we know from experience that when you’re first launching ads for your brand and are in the testing phase if you don’t give yourself ample ad budget, you’re going to shoot yourself in the foot.
The less you invest monthly in your ads, the less data that will be flowing through your ads, and the longer it will take for you to learn which ads are reaching and getting conversions from your target audience. Therefore, you might get to the end of your ‘trial period’ having made no optimisation thanks to a lack of sufficient data.
So many people underspend and under commit when starting out with paid ads, so just assume online advertising doesn’t work for their company. But in reality, they just haven’t bought enough clicks to be able to discover the holy grail!
There’s a reason Google and Facebook ads are so prevalent and the most popular online advertising networks. When done right, they work! Online ads are the number one way to scale your business and create a huge A/B testing revenue-generating marketing machine!!
Below we’ll cover our recommendations for the minimum ad spend needed across both platforms from our experience, as well as what they say themselves on budget recommendations.
What is the minimum budget for Google ads?
Officially, Google has not set a minimum ad spend requirement for businesses wanting to promote their products through the search engine. However, that doesn’t mean you can easily create effective advertising campaigns generating consistent revenue without meaningful investment.
So technically, you can spend as little or as much as you want on your desired keyword. Some startups might commit 100s a month, some 1000s, then huge corporations could be spending millions! There’s obviously no maximum amount either beyond just the absolute cap of your market size.
However, what you do need to consider is your competition! If you’re operating in a competitive industry then it’s likely lots of other companies will be ‘bidding’ to show up for the same keyword as you. This means the cost per click (CPC) on average will be higher, so logically your ad spend will in turn also have to be bigger.
Your main goal is to spend enough to get in front of your target audience, which will mean bidding competitively. So, what is the minimum you need to spend in order to see sufficient conversions from your investment?
The annoying answer is that it honestly depends on myriad different things like your average order/customer value, your competition, your conversion rate from leads or website visits etc.
In general, it is one of the more expensive online advertising platforms, as there’s such high buying intent from each search so the traffic is far more valuable. So while it’s more expensive per click, we’ve found it to be the most consistent and reliable once you do find the keywords that work for you.
BUT, as an agency, we have a minimum entry point when it comes to our client’s monthly ad budget. From our experience, any investment above £1000 monthly is a strong starting point and foundation to grow from.
So that’s a minimum daily budget of £33 on average. One thousand pounds, in most cases, will give us enough budget to run a large enough testing matrix to be able to find the winners in an acceptable time period.
If you spend £1,000 p/m and your cost per click is £1 then you will bring 1,000 users to your site who may or may not convert. This is 1,000 tiny tests to tell us if a particular keyword will make us money or not; if mobile is better than desktop, or London is better than New York.
If you just don’t have £1000 to invest monthly right now, you can still make it work. It’s probably too early for you to start working with an agency if you’re budget is in the hundreds a month, but that doesn’t mean you can’t make a profit from Google ads yourself.
We do see though that less than £500 is a hard minimum where there is so little data coming in that it becomes too long a time period to build up enough data to really ever get to any success.
So £500 ad spend is a hard minimum for running Google Ads
One thing I will say is to be very careful what advice you take from the Google reps!
You will probably be contacted by Google reps claiming to be trying to help you optimise your account, but the majority of the time they give bad advice and their priority is just making Google more money like suggesting you use a broad match keyword type. Not actually analysing the data of the advertisers on their platform. We’ve actually written an article all about Google Ad reps and why you should steer clear.
Happy bidding!
What is the minimum budget for Facebook ads?
Facebook themselves recommend a minimum ad spend of $5 a day to start out if you’re looking for clicks or video views. If you want to be charged just for impressions then you can have as little as $1 for your daily budget. But if your goal is events (for example app installs), then Facebook’s minimum costs are much higher at $40 a day.
While this can be sufficient when first setting up the Facebook account and getting in front of your target customers, it’s not enough to move the needle realistically enough to find results.
With Facebook advertising, you can set your budget at the campaign level or the ad set level.
When setting your budget at the campaigns level you can use Facebook’s campaign budget optimisation feature, so that their algorithm will increase the budget for the best-performing ad sets within a campaign.
The ad set level is the default in ads manager and means Facebook will attempt to spend 100% of your budget across each of your ad sets regardless of how they’re converting the audience.
This means you will have to manually check which ad sets are performing better than others, and then go in yourself and adjust the ad set’s budget accordingly.
Ad set level is our preferred approach to take more control away from Facebook ads manager as the optimisations are often too short-sighted and so come up with incorrect optimisations.
From our experience running Facebook ads for clients, we suggest a minimum ad budget of £1000 monthly again. So that’s around a £33 cost per day.
One thousand pounds, in most cases, will give us enough budget to create a large enough AB testing matrix, like with Google Ads.
We like to keep a minimum of £5 per ad set and with that limitation, we could for example set up 2 campaigns testing 2 different creatives with 3 audiences each. This is a total of 6 variations as ad sets so £1,000 p/m = £33.33 p/d. £33 p/d / 6 ad sets = £5.55 per ad set.
It's not all about your budget
Your budget for social media or Google advertising is a huge part of what decides your success. But burning thousands a month without a well thought out strategy in place is just bad business.
For both Facebook and Google ads, there are tried and tested best practices when you’re setting up your campaign to help you reach the right audience, and get the most out of your budget.
There are 1000s of free online resources on places like Youtube showing tutorials and answering common questions around setting up Google or Facebook ads campaigns. So that’s where I would start!
On our YouTube channel, we actually have a video that’s perfect for this, discussing our Pre-Launch Paid Ads Checklist! Covering everything you need to have in place to give yourself the best chance of success with Google and Facebook ads.
We also have a great article explaining search keywords and talking all about the different kinds of keywords match types you can use here.
Facebook Vs Google
Facebook offers a cheaper price in traffic quantity and so does have an inch more space than Google. They are the biggest social media platform around, and so there are billions of people to reach and countless different ways you can reach your ideal audience.
However, Google often wins thanks to its high buying intent in a direct comparison with return on investment. If you get your keywords right, you know that the audience seeing your ads are literally looking for what you offer, at that exact moment.
Ultimately both need at least £500 but preferably a £1,000+ a month budget. The reality is that there are other factors more important to consider when deciding between the two channels like whether users search to solve the problem you’re helping with or how visual your product or service is.
SO…..
Which platform is right for you?
So we’ve covered what sort of cost businesses advertising on Google and Facebook can expect per month, but if your budget is limited, it doesn’t tell you which ad platform to focus on for your business. Should you be starting out on social media, or is your ideal customer already searching for your services?
We’ve actually created a super simple 5 question quiz to help you find the perfect paid ads combination specifically for your business. It considers your budgets, industry, how much your customers pay on average, and whether they are searching with buying intent for your services/products, or if it’s typically an impulse buy.
Find out what sort of ads campaigns you should be running in just 2 minutes here: