Facebook Ads Budget: The Definitive Guide for Agencies

At the heart of every successful client/agency relationship is trust.

One of the easiest ways to lose a client’s trust is not looking after one of their most precious resources: money.

Spending more than the client’s approved PPC budgets is a quick way to do just that.

A PPC professional can, at times, spend most of their day making sure all their clients' budgets are on track.

Why is budgeting work a priority?

Because agencies know that one of the foundations of building a long lasting relationship with a client is accurately spending their budget.

Our team has worked as analysts at PPC agencies and managed thousands of PPC budgets. As we have grown Shape, we have worked with hundreds of agencies on their budgeting challenges and seen many strategies for scaling PPC budget management.

Working at agencies and on PPC software, we’ve learned that no two companies are exactly alike. But, lots of companies have similar challenges surrounding PPC budgeting at scale.

As analysts, we spent hours manually updating spreadsheets knowing there had to be a better way to manage budgets.

When we set out building Shape, our goal was to create the PPC budgeting software we always wished we had as PPC analysts.

Ad Networks are not overly interested in solving budgeting problems. Their algorithms are focused on how to spend the most money effectively, not on limiting spend.

Facebook is no exception. A Facebook Ad campaign can spend out of control if left unchecked. Why? Agencies are often running multiple Facebook campaigns for a single client at any given time, and they could be managing 10 to 20 clients or more.

Many PPC agencies also run campaigns across other ad networks for their clients.

Tracking multiple campaigns across multiple ad networks leaves room for PPC ad spend to slip through the cracks.

Without proven processes and technology, a digital marketing team may struggle to scale PPC budgeting operations.

When calculating Facebook Ad spend for a new client, you’ll first want to learn the client’s performance goals. Then, you can work backward to determine a PPC budget.

Communication with the client around goals is ultra important at this point in the budgeting conversation. Asking the right questions will ensure you start with a budget that has a reasonable chance to fund the goals the client wants to achieve.

Getting access to any previous PPC campaigns the client has run should be your first step. Looking through past performance can help you get a better idea of expected impression levels and CPCs.

Collecting conversion data on the client’s website is also crucial for setting a performance baseline and determining budget levels. One KPI to hone in on is the current conversion rate from the website. It’s not a perfect indicator of the conversion rate for your campaigns, but it is decent for determining the amount of traffic you’ll need to convert a sale or lead.

Once you have gathered as much of this type of information as you can, HubSpot provides an excellent ad ROI calculator tool you can use to plug in budget variations to see the client’s potential ROI.

Spreadsheets will probably always be a part of a PPC professional’s life in some way or another.

Whether managing PPC budgets with spreadsheets or pulling together a quick ad-hoc analysis, spreadsheets are one of a digital marketer’s most powerful tools.

Excel and Google Sheets have a special place in many digital marketers’ hearts. They are almost as close as a marketer can get to their version of a blank canvas to paint on.

But PPC budgeting spreadsheets have their limitations. Workflows that rely on spreadsheets may require manual data entry and are prone to human error.

Managing Facebook Ads budgets with spreadsheets can be especially risky because there is no way to automate edits to the Facebook interface from your spreadsheet. A spreadsheet-driven budgeting workflow relies on a person updating the data and making the necessary changes by logging into Facebook. At best, your spreadsheets may have some alerting built in to help you attend to issues faster.

For PPC marketers managing hundreds or thousands of budgets, spreadsheets quickly become unwieldy, and overspends can occur without oversight from third-party PPC software.

Facebook is well known for making constant changes to its user interface and features. Facebook is powerful because of the size of the audience and the almost unlimited combinations of demographics, bid strategy, and ad copy you can use to design a campaign.

But there are still only two primary levers available by default to control spending on Facebook:

• Account spending limit controls the budget for your entire ad account.
• Daily budgets and lifetime budgets allow you to control your budget for specific ad sets.

If enabled, once an account hits the account spending limit, all campaigns tied to an account will stop running (no matter the specific daily or lifetime budget). But the account spending limit isn’t very flexible for PPC agencies running complex campaigns.

Another important decision to make when configuring your budgets within Facebook's ad platform is when to utilize ad set level budgeting or Facebook's "campaign budget optimizer" that was released in 2020. Ad Set Budget Optimization (ABO) is the traditional method for setting ad set budgets that have been available since ad sets became the primary budgeting category for Facebook in 2017. Campaign Budget Optimization (CBO) works across multiple ad sets and give Facebook much more control over how spend is distributed across the selected ad sets.

We highly recommend using ABO during any testing or initial phases of campaigns. After you have data to analyze, you can experiment with activating CBO's more advanced features.

Facebook is unlikely to build out more budgeting functionality in the coming years that limits PPC spend. Their focus is on enhancing bid algorithms and targeting optimizations that help your account increase performance and, in turn, spend. We anticipate the current budgeting features will remain pretty constant. To execute any sophisticated budgeting programs, marketers will have to look beyond the ad networks and utilize third-party tools to deliver better results to their clients.

Managing thousands of Facebook ad sets across multiple clients with a limited set of budgeting tools is stressful.

If you are a PPC marketer reading this, you have probably overspent a client’s PPC budget in your career. Once you’ve done it, you never want it to happen again.

Most PPC software is pretty good at bringing all your data into one place and reporting on it. Where most tools fall short is offering intelligent automation and settings to customize your PPC budgets. With our PPC budgeting software, we wanted to ensure you have all the tools you need to confidently manage clients’ ad spends to their budget goals and automate repetitive tasks.

If you feel like you are beyond free spreadsheets and manual workflows, it’s time to invest in tools designed specifically for budgeting.

We don’t believe there is a single best PPC software solution that every PPC agency should use. But, we do think that if you need to solve budgeting challenges, Shape is a great place to start your search.

Request a Demo

Making projections and forecasting future results is one of the most challenging tasks a PPC marketer does day-to-day. Clients are often skeptical of budget recommendations they view as too high. But, pitch a budget that is too low, and you risk your strategy not driving enough impact on the client’s business.

Budget forecasting is another area where PPC software can help. One example is Shape’s Budget Booster feature that takes the guesswork out of the budget forecasting process. Clients are more likely to trust recommendations that they believe are supported by data.

That’s exactly what Budget Booster provides. The tool calculates the maximum spend potential for every campaign in Shape using metrics tied to impression share lost due to budget for the previous 60 days.

Forecasts are generated at the budget and client level once Budget Booster calculates the max spend for all campaigns. Because Budget Booster is backed by the client’s performance and spend data, PPC marketers can be completely transparent with how they got to their recommendation. The tool helps fuel conversations and get budget increase approvals more often.

Once your spend recommendations get approved, there may be built-in budget changes based on seasonality. Facebook’s internal tools do not allow much flexibility when it comes to scheduling future budget changes.

Setting calendar alerts or reminders to make budget changes in the future is one way that PPC overspend mistakes happen. They may get accidentally dismissed without the digital marketer taking any action. If you do not have a formal process for implementing budget changes, the best tactic is to schedule those changes to be made automatically for you.

If you are a Shape customer, you can use the Budget Scheduler to set future budgets.

By entering in all future changes before they happen, you ensure that spend paces correctly from day one of every new cycle.

The most challenging part of creating a new Facebook Ads budgeting template is fueling your solution with fresh data. This helps you make timely, accurate projections and ensures that campaigns optimizations help you hit your budget goals.

Shape offers ways to connect your PPC data to Google Sheets and Google Data Studio through our Google BigQuery connector to do just that. Using our Advertising Data Infrastructure, you can pipe Facebooks Ads data into our standard PPC budgeting templates and then customize your reports.

Bonus: Need more reporting inspiration? Check out our partner NinjaCat's Facebook Ads reporting template.

• More writing about PPC marketing
• We have a Definitive Guide for Google Ads Budgets and LinkedIn Ads Budgets too
• Learn more about our PPC software and product updates
• PPC Management Software for Agencies [2023 Guide]