How Much Should I Spend on Facebook?

The Question: How Much Do I Need To Spend on Facebook?

In the complex world of social media advertising, brands are bombarded with varying advice on how to optimize their Facebook ads. But what does the data say? Intensify partnered with Popsixle to find out. The question became, how much should I spend on Facebook to ultimately have the most efficient and effective campaigns. To answer this, we analyzed first-party data from over 300 accounts to discover the sweet spot in ad spending that unlocks the full potential of Facebook's advertising platform. The first key metric to focus on? Weekly purchases. 

Key Findings: 

Our study focused on the relationship between the number of purchases per week and two key metrics: Cost Per Acquisition (CPA) and Return On Ad Spend (ROAS). We categorized the accounts into five groups based on their weekly purchases: 0-20, 20-40, 40-60, 60-100, and 100+.  

Here’s what we found:

• Accounts with 0-40 purchases per week had an average ROAS of 1.6 and a CPA range of $55-$72.
• Accounts with 40-60, 60-100, or 100+ purchases per week consistently achieved a ROAS of 2.2-2.8 and saw their CPA drop to a range of $41-$61.

What Does This Mean (...and how does it relate to spend)?

This data indicates that the magic number for brands to strive for is around 40-100 purchases per week. Once an account hits this threshold, Facebook's machine learning systems kick into high gear. With more data at its disposal, the platform can more accurately identify profitable customers, resulting in more efficient auto-optimization, lower CPAs, and higher ROAS. This is the first step in identifying your optimal spend level. 

Our Recommendation:

Brands should aim for at least 40 purchases per week on Facebook. This means budgeting to spend enough to hit this target number. Trusting Facebook’s machine learning to do the heavy lifting once you hit this threshold can yield substantial benefits.

How to Calculate Your Minimum Ad Spend:

To calculate your minimum ad spend, determine how much you need to spend to achieve 40-60 purchases per week. Here’s a simple formula:

Minimum Ad Spend = Average Cost Per Purchase x Desired Weekly Purchases

Sample Calculation:

For example, if your average cost per purchase is $65, and you aim for 50 purchases per week:

Minimum Ad Spend = $65 x 50 = $3,250 per week, or $13,000 per month.

Conclusion:

Investing in Facebook ads can be a highly effective strategy for finding incremental revenue, when done right. When your Facebook rep or agency partner recommends that you spend more on ads, it’s for good reason. Our data suggests that brands should aim for at least 40 purchases per week to unlock the full potential of Facebook's advertising platform. By spending wisely and leveraging Facebook’s machine learning, you can achieve a lower CPA and a higher ROAS, growing your business with greater efficiency.

If you’re ready to supercharge your Facebook Ads with a powerful data connection, try Popsixle free for 14 days.