How much ad budget should you allocate to start advertising your products or services in Facebook?
We will be sharing the same Facebook ads calculator that we use to better determine how much our clients need to spend on your Facebook advertising campaign to get a positive return.
Now before we get started, I recommend getting some basic numbers ready to give you more accurate results. But firstly, the theory behind this formula is that you take your final goal and then we work back from that to better determine how much you need to spend.
So let’s get started. Firstly, to work this tool, you only need to enter the number and percentage without any symbols in the fields highlighted in yellow and if you’re not sure about a certain metric there is a comment in each section giving you an idea what it is all about.
You can hover over the red mark as shown in the image to get some more help text. So the first number you need to know is what the total amount is that you want to spend.
Facebook Ad Spend Per Month
The first variable in the calculator is your monthly Facebook Ads
Average Cost Per Click
You can estimate your click costs using your advertising history. Or you can input your target cost-per-click (CPC) into the calculator. Let’s say you want to pay only AED 5 per click put that number.
Lead Conversion Rate
Leads are people who engage with your ads and give you opt-in permission to follow up with them. Your leads might subscribe to your email or messenger list, or sign up for follow up call.
Qualified Lead Percentage
Qualified leads are those who continue to engage with your messages after they sign up for your email or messenger lists.
Request Completion Rate
Your Request Completion Rate is the percentage of people who engage with your messages all the way through to your sales offer.
Your Purchase Rate is the percentage of people you expect to take you up a purchase offer for your product or service.
Average Revenue Per Sale
Your average revenue per sale is the average price of the products or services you’re promoting with your Facebook Ads campaign.
Your product cost is represented as a percentage of your average revenue.
If you are new to the e-commerce game we suggest to go through our guide on How to Launch An e-Commerce Website That Sells 24/7 it is a must have guideline to creating an authority e-commerce store and avoid having an online store that looks fishy that your visitors will run away the very first second they land your store.
Agency/In House Management Fees
Your agency or in-house management fees is the amount you pay a service provider or employee to manage your Facebook Ads.
With your conversion data in the calculator, you can start to see how your budget impacts your results. You can also see how your product and sales systems affect your potential to produce a profit from Facebook Ads. With the Facebook ads Calculator your will be able to see where to make the adjustments for each step of your conversion funnel and finally be in control of your campaigns.