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Calculating Budget and Installing Facebook Ads

Budget Advertising budget is one of the main problems in the execution of digital marketing strategies. What’s the solution?

Budget is a major issue in the execution of a digital marketing strategy. Without the correct budget calculation, you have the potential to incur costs that are too large but not worth the results achieved.

This makes the calculation of the budget in the campaign a very crucial thing. Generally, professional digital marketers already have sufficient skills in calculating campaign budgets, what basis do they use in calculating the budget?

Ad Budget Is Quite Complicated

If you are targeting sales of $200 in 1 digital marketing campaign, how much budget do you need? Of course, for those of you who are still not familiar with the world of digital marketing, it will be difficult to answer the nominal estimate.

But, actually there are several methods that are quite powerful and can help you in determining the estimated budget.

2 Ways to Determine Advertising Budget

Generally, digital marketers use a lot of references based on the number of conversions (Acquisition Cost or CPA) and reciprocity (ROI/ROAS). Here are the details:

Based on ROI / ROAS

ROI (Return on Investment) or ROAS (Return On Ad Spend) is a method of calculating advertising budget based on the desired percentage value of return. By using this method, digital marketers usually do not set a maximum limit for advertising.

For example, if you want to get sales of $200 with an advertising ROI of 50%, then the budget you need is $250. Calculations based on ROI are usually relatively easy, but you need to record detailed income so you don’t make mistakes in calculating the expense ratio.

Things to note before executing the ROI/ROAS strategy

  • Make sure you have installed the complete tag with the transaction value per item
  • Choose the ROAS strategy on the advertising platform to start using this method
  • The ROAS strategy may not be available immediately, you need to provide price data per transaction per product first

Based on Cost of Acquisition (CPA)

If the ROAS method is calculated based on the value of money entered, then the CPA method or the cost of acquisition is calculated per the number of transactions that occur.

For example, if you want to get sales of 100 transactions with an acquisition cost per transaction of $2, then the budget you need is $250.

Keep in mind that the CPA strategy assumes all transactions have the same value. This means that no matter your customer buys goods for $1 or $10, the system will still record 1 transaction.

Therefore, it is very important to define which products you will target in your campaign. Given the acquisition costs and the amount achieved is not necessarily in accordance with the capital you spend.

Things to consider before executing a CPA strategy

  • Decide on the products you want to focus on
  • Make sure you’ve calculated your acquisition costs, and don’t undermine your core profits

Why is Advertising Budget Important?

Advertising budget determines how much life your ad will live, and of course if you don’t have the correct budget calculation then your company is in danger of suffering huge losses.

You must determine which method is suitable for determining the value of your advertising budget. Here are some other reasons why you need to determine a targeted advertising budget:

Determinants of BEP (Break Even Point) or Return on Capital

Do not let you do not know how much the BEP value of your ad. By knowing the BEP value, you can know whether the ad is experiencing a loss or not. And once you know that, you can decide whether to extend the ad or not.

Ad Effectiveness Metrics

You can also find out whether the ads you have launched are effective or not. You can later see how the ratio of your expenses to the results you achieve. In addition, with the budget, you can determine the maximum cost (cost control) value to control the course of the campaign if it turns out that in the field they spend more than they should.

To Make Promotions More Targeted Budgets

give your campaign clear direction. How much total sales to get or how much turnover to achieve to decide whether the campaign can be continued or not.

Take Our Digital Marketing Training For A More Comprehensive Learning

We understand that not everyone can understand this world of budgets, even though without knowing the correct budget value, you can suffer considerable losses. In addition, it can create a mindset that digital marketing strategies are not as effective as people say.

Even though the problem is not in the digital marketing system, but in you. Therefore, you can take part in our digital marketing training to learn more about the world of budget calculations in digital marketing strategies.

By knowing the value of an accurate budget estimate, your campaign will also be more focused and of course have the potential to reap more definite profits.

What to Pay Attention to When Installing Facebook Ads?

Installing Facebook Ads can not just install, or you will get results that are not good for your budget. Here are some tips that you can use

Considering the increasing number of users, social media Facebook has become one of the main targets for digital marketers to advertise there. In addition to its complete features, Facebook also offers a very complete report dashboard so that Facebook is a channel that should not be missed.

But is there a specific method for advertising on Facebook? We are sure that some of you have already installed Facebook Ads but have not succeeded in getting the desired prospects. What’s really wrong?

Optimization in Facebook Ads

If you just install, of course there is a possibility that people who see your ad do not match the profile of the business you are advertising. For example, you advertise a car product, but it may appear to people who are looking for a cell phone. Because the Facebook Ads algorithm can’t read our minds.

Because of this, you need to set everything up beforehand to make sure your ads don’t get misdirected. Luckily Facebook Ads has a variety of ways to optimize your ads.

Goal Optimization

Facebook supports a variety of goal ad formats, from brand awareness to conversion based. Each goal you select will adjust the setting options in the next stage.

What you need to pay attention to are the next steps, such as choosing the event to use from the Facebook Pixel or delivery optimization you are targeting. For example, if your ad is to get as much reach as possible, then you should choose delivery optimization reach. And if you choose something else, then there is a chance that the ads may not run as expected.

This is very important, because it will affect Facebook in serving ads to users. The wrong choice can reduce the potential for advertising, because Facebook will serve ads to the wrong users.

Targeting and Audience

This is the core of all optimization in Facebook Ads. No matter how good your ad is and no matter how much the budget allocated, it will be useless if the ad is not directed to the right audience.

In Facebook Ads, you are really given the freedom to set the target as precisely as possible. You can set targeting based on interests, job title, device ownership, to targeting based on marital status.

If you want to improve it even further, you can also use custom audiences that can be created from existing data sources on Facebook or your website or app. For example you want to target only people who visited your profile in the last 30 days, using a custom audience then anything is possible.

Ad Schedule

You can also serve your ad at certain hours. For example, if your ad is aimed at business people who want to improve their business performance, then you can display your ad during business hours.

It should be noted that there is no concept of prime time in Facebook Ads, and there is no fixed standard for determining broadcast hours. Your ad can be crowded at certain hours, but at other times it can be different.

Tip: Use user-time zone-based report data to get best time information

Placement

Facebook’s network is extensive. Starting from the social media Facebook itself, Instagram, to their partner site network. Because of this, the ad placement options are also very diverse.

And your job is to make sure your ads are showing in the right places. One of the most common examples is the difference in user profiles both on Facebook (Gen X) and Instagram (Gen Y and Gen Z). So if your ad is targeted to a certain generation, then you have to determine the right placement.

Incorrectly determining the placement will make your budget wasted. Because ads are seen but no one is interested.

Cost Control

Last but not least is the determination cost control or cost control. In the world of digital marketing, there is such a thing as the concept of CPA or Cost Per Acquisition or acquisition costs. The way to calculate it is to take the portion of the advertising budget per transaction from each of your sales.

And of course do not let the cost per transaction that you pay from advertising exceeds the budget you provide. For example, if you place an advertising budget of $100 with a sales target of 10 transactions, then you must set a maximum cost control of 100,000 so that you can meet the target.

Tip: Cost control can be used as a parameter for the success of conversion-based ads, the lower the value the more effective the ads

Optimize Your Ads, and Get Maximum Results

You have the freedom to place ads, so make the most of it! You certainly can’t get all of these options in conventional media advertisements (such as television commercials). Make the most of all its features, and get the best out of each ad.

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