If you’re just starting your advertising campaign for the year, and Lead Ads are part of the plan, here are a few tips on how to create a Facebook budget for lead ads.
First, you have to learn what your cost per conversion is going to be. The cost per lead is going to vary across industries, based on how “in demand” your product is. For example, if you build cannabis facilities, you’re not going to generate hundreds of leads, but if you sell cannabis, you might. So the cost per lead for the facility might be $50, while the cost per lead for the store would be $10-$15. If you don’t have past data to give you an idea of what your cost will be, you can use these numbers as ballpark figures based on your industry.
Now, you have a few steps to work through.
- Run a Lead Ad campaign with a budget based on dollars, for a few weeks. We recommend at least $200 invested in this – because that’s what it is. An investment in valuable information. Use the results of your campaign to do step two.
- Use an educated guestimate of your cost per lead.
- Figure out how valuable a lead is. If someone completes your form, and it leads to a purchase, what is that value? If you want to, assign value to the data too (because you gain a contact you can retarget if they don’t convert right away).
- Figure out your average conversion from a lead – the number of people who purchase from a lead.
- Figure out how many leads you need to convert, to consider your campaign successful.
- Look at the cost vs the reward, and then decide based on this information, how much you want to invest.
An Example on Creating an Ad Budget for Facebook Lead Ads:
We ran a lead campaign for the Social Media Managers Workshop. We spent $300 on the Lead Ad, and had 22 people fill out the lead ad form requesting more information. Our cost per lead was $13.88. Of those, 2 people purchased workshops. All of them gave us their email address, and information regarding their challenges in social media.
- A lead on a Social Media Managers Workshop is worth $1499. The value we assign to the data gathered is $50 per person.
- Our average conversion from a lead is 10%.
- We’d like 8 leads to convert, to consider our campaign a resounding success.
- Our cost was $300. We converted 2 of the 22 leads. Our reward was $3000.
- We want our reward to equal $12000 (8 leads that convert), so our budget would be $1200.
- Because we assigned value to the data as well, our cost for data for 22 people was $300, and our reward was $1100. If we run a campaign with a budget of $1200, we can reasonably expect a data reward of about $4000. Whether we generate that reward depends on our sales team!
That’s it. Three (not easy but definitely worthwhile) steps on how to create on your Facebook budget if you’re running Lead Ads. If you have no idea what we’re talking about, that’s okay. Fortunately you can hire people (us) to do this for you! Just be sure to factor our management fee into your cost when you’re deciding on value. We’d love to work with you!