Navigating the complexities of Facebook Ads can be challenging even for experienced advertisers, but understanding budget options shouldn’t be. It might seem straightforward – allocate a budget and you’re good to go, right? Well, it’s a bit more nuanced than that.
Facebook offers two budgeting approaches: daily and lifetime. Both come with their pros and cons, making the choice less obvious. Let’s break down each option to determine the most suitable one for your campaigns.
Daily Budgets: Simplicity with Nuances
Daily budgets are user-friendly but possess subtle complexities every advertiser should grasp. This approach limits Facebook’s daily spending to the defined ad set budget. At first glance, it appears straightforward, and it is.
Advantages of Daily Budgets
Sticking to a daily budget simplifies spend management, allowing for consistent budget control and predictable financial planning. This setup is particularly beneficial for high-performing ad sets delivering desired results at the target cost. Facebook diligently maximizes volume within the allocated budget, which is advantageous in such scenarios. Moreover, daily budgets are ideal for evergreen campaigns designed for continuous runs, determined by performance rather than a fixed schedule. They are also the optimal choice for fluctuating budgets, unlike lifetime budgets, which work best with a fixed budget until the campaign concludes. When adjusting daily budgets, aim for incremental changes within 20% of the original amount to avoid disrupting the Facebook algorithm and impacting performance.
For significant budget changes, such as doubling or halving, gradual 20% daily adjustments are recommended whenever feasible.
The Downside of Daily Budgets
Daily budgets come with a caveat: Facebook strives to exhaust the entire allocated daily budget, irrespective of the campaign’s performance.
The illustration above demonstrates a $32 ad set budget consistently aligning with the average spend over the preceding month. Unlike search-based targeting, Facebook’s targeting mechanism prioritizes impression delivery to the target audience. Consequently, with daily budgets, Facebook prioritizes displaying enough impressions to deplete the allocated daily budget. While this might sound concerning, it’s not inherently detrimental. Another limitation of daily budgets is the absence of ad scheduling. This results in continuous ad display throughout the day and week, unless managed through external tools. For campaigns requiring specific time-based or day-specific activation, daily budgets might not be suitable.
Lifetime Budgets: Performance-Driven Spending
Lifetime budgets offer an alternative approach with distinct advantages and considerations. Here, you provide Facebook with the total campaign budget and specify the ad set’s end date.
Advantages of Lifetime Budgets
Compared to daily budgets, lifetime budgets prompt Facebook to prioritize performance, dynamically adjusting daily spend based on campaign results. On high-performing days, Facebook allocates more budget to capitalize on the favorable conditions. Conversely, on less successful days, spending is reduced to conserve resources. This approach ensures the total expenditure aligns with the initial budget by the end date. Additionally, lifetime budgets empower advertisers to define specific campaign running hours and days.
This feature caters to campaigns requiring time-restricted ad display. However, it’s advisable to prioritize performance-based scheduling initially and only resort to time-based scheduling when absolutely necessary – a topic for another discussion.
The Drawbacks of Lifetime Budgets
The downsides of lifetime budgets are primarily related to convenience rather than significant drawbacks. One notable disadvantage is the unpredictable daily spend fluctuations, making it challenging to anticipate daily coverage or ad expenditure. If consistent coverage is crucial, especially during peak seasons, or if predictable ad spend is preferred, daily budgets offer better control.
Lifetime budgets necessitate a defined end date and budget, instructing Facebook on the spending limit within that timeframe. This approach works well for campaigns with fixed schedules and budgets. However, it might not be suitable for campaigns with potential budget adjustments, timeline extensions, or contractions. While adjusting the budget or modifying the end date is possible, it can impact Facebook’s budget allocation strategy. For instance, shortening a two-week campaign to one week after a few days compels Facebook to expedite spending within the remaining days to exhaust the allocated lifetime budget.
Choosing Between Lifetime and Daily Budgets: A Concise Guide
Given the information presented, here’s a summarized guide to help you decide when to opt for each budget type. Choose daily budgets when:
- Running evergreen campaigns
- Aiming to capitalize on strong performance
- Anticipating frequent budget changes Choose lifetime budgets when:
- Requiring scheduled ad display
- Working with a fixed campaign budget and end date Selecting the wrong budget option can have costly repercussions for your Facebook advertising endeavors. Keep these distinctions in mind to ensure you make informed decisions tailored to your campaign’s specific requirements!