When Your Budget Is Just Too Small

Look, this isn't meant to be encouragement to give Meta more of your money indiscriminately. I'm never going to tell you to spend money you don't have or are uncomfortable spending.

The problem is that most advertisers simply don't appreciate how their budget limits them. This isn't just about spending more to get more results. It is about all the various strategies and things advertisers care about. It becomes mostly pointless because of your low budget.

First, let's discuss the obvious point. Your budget needs to be high enough to produce meaningful results.

So how do we define this? A basic rule of thumb is that it takes about 50 conversions in a week to exit the learning phase. If you're not generating that, you could argue that the budget is too low for what it is you're trying to accomplish.

Of course, that may sound elitist or downright crazy if your CPA is a hundred dollars, which would then require a $5,000 weekly budget. That may not be reasonable for everyone, though I'd argue it's all relative depending on the value of these conversions.

Even if you can't generate 50 per week, you at least want to get halfway there or whatever it takes to get worthwhile results.

So how about an example? If you're spending $10 per day, don't expect miracles when trying to increase revenue. In fact, don't expect anything at all. But we see this all the time. Depending on the product and the expected CPA, a low budget could just as easily be defined as $50 or $100 per day.

If your product costs $1,000, you can't spend $100 per day and expect a sale per day.

With all that considered, Meta needs data to learn what's working, what's not, and to get you more conversions. If you're getting one conversion per week, the algorithm is running blind. Any conversion you get is mostly luck. It is guessing.

I see this with advertisers who focus on leads too. Depending on what a lead is, your expected cost per lead can be wildly different. It might be a dollar or less for a lead magnet or hundreds of dollars for a potential high-priced client.

Again, adjust what a low budget is based on expected volume to get the leads you want. And let's be clear, we want quality leads, not just any lead. There are always ways to get cheap leads, but that doesn't mean they're worth even a small budget if you're throwing your money away.

Second, your overall daily budget is much less important than your budget per ad set.

You can have a $1,000 daily budget overall, but then spread that out between 50 ad sets. Now you're spending $20 per ad set, and you're running into the same problem as the advertiser with a $20 overall budget. Your problems are just at a higher scale.

Your results per ad set are far less meaningful because of the watered-down budget and smaller sample sizes.

I've said it a million times and I'll say it again: prioritize a simplified approach.

Limit the number of unnecessary ad sets as much as you can. Maybe you could spend all of that $1,000 on a single ad set. That volume will make your results far more meaningful, dependable, and stable.

Of course, I realize that's not necessarily realistic. But if you can't spend more money overall, you should consolidate your budget the best you can. This gives the algorithm more data, but more importantly, it gives you results that actually mean something.

Small changes in conversion numbers can drastically change the perception of performance when we're spending less. These fluctuations will have less of an impact when you consolidate.

Third, your budget impacts your testing strategies.

I've seen advertisers with tiny budgets trying to follow advice from big-budget advertisers, and it's just pointless. They're in search of the best copy, the best creative, the best combination of copy and creative. They turn off ads that are the low performers as they define them. They turn off placements that aren't generating conversions.

Then they may not get any conversions on some days, and they're frantically trying to get something to work.

When your budget is already small, you have to understand you simply cannot look at your results the way big-budget advertisers do. Your results aren't meaningful.

If one ad generated three conversions this week and another generated zero, it's not because the one that generated three is necessarily better. I've seen advertisers breaking down results with text variations and freak out because the variation that generated two conversions is being used less than the one that generated four.

It simply doesn't mean anything.

So here’s the bottom of the glass. Your priority should be to spend enough money per ad set to generate meaningful and actionable results. It doesn't matter what your overall budget is if you water it down so much that you have small budget problems.

Prioritize simplicity. Eliminate unnecessary ad sets. Consolidate your budget where you can.

Now, if you have a small overall budget and don't have room to increase it, embrace this. Don't try to act like a big-budget advertiser.

Create the simplest campaign possible, limiting any complexity.

Do not—and I repeat—do not obsess over your results. Do not obsess over finding the best copy and creative. You're at a disadvantage here. Know that results will come slowly, and there's no reason to micromanage your ads when you're dealing with small sample size results.

Give the algorithm room to do what it needs to do.

If you simply don't have enough budget to generate anything meaningful, consider dedicating that money to remarketing only. Now, of course, you might know my opinion on remarketing. This can lead to inflated results that aren't particularly incremental.

But some results are better than no results at all.