How Much Should I Spend on Facebook Ads in 2025?

Have you ever thought, "How much should I spend on Facebook ads?" We’ve all been there. It’s a common question with no single, straightforward answer. Each article seems to offer different numbers or formulas. But here’s the reality: finding the “perfect” budget for your Facebook ads depends on your goals, audience, and willingness to test and adjust as you go. 

Why should you have a Facebook ad spending strategy?

A Facebook ad spending strategy is essential because it helps you allocate your budget efficiently and ensures your ads work toward clear, measurable goals. With a strategy, it's easier to overspend or target the right audience, leading to wasted ad spend and underwhelming results. A well-thought-out strategy allows you to decide how much to spend. 

It also allows you to adjust your approach as you gather insights from your campaigns, helping you get the most out of your ad budget and maximizing your return on investment. The amount you choose to spend will also determine how many ads and ad sets you can create. 

We’ve developed a flexible, step-by-step approach to help you establish a Facebook ad budget tailored to your business needs. Let’s break it down and make Facebook budgeting work for you!

Step 1: Define your campaign goals

Before setting your budget, ask yourself: What do I want to achieve with these ads? Whether building brand awareness, generating leads, or driving sales, your goals shape your budget and strategy. The key is to tie your budget to a clear, measurable objective. It’s not about spending more—it’s about spending smart.

There are 6 Facebook campaign objectives designed to align with different customer journey stages. 

1. Awareness – Build recognition for your brand by increasing visibility among your target audience. This helps create a strong foundation and familiarity, making it easier for customers to remember and trust your brand.
2. Traffic – Drive visitors to your website or app by encouraging clicks from potential customers. This can help boost your website's traffic and increase the chances of converting those visitors into long-term users.
3. Engagement – Let’s say you’ve managed to get many followers on Instagram or Facebook. Boosting engagement can enhance brand loyalty and spark valuable interactions. 
4. Leads – This is designed for businesses collecting valuable customer information directly through Facebook forms. It's an efficient way to build a list of potential customers by offering incentives like discounts or content in exchange for contact details. 
5. App promotion – Get users to download or interact with your app by highlighting its benefits and ease of use. Promoting your app effectively can lead to higher user acquisition and better retention, driving more value from your mobile platform.
6. Sales - Optimize your ad campaign to drive actual purchases, making it the ideal choice if you focus on conversions rather than just website traffic. This objective targets users who are most likely to complete a purchase based on Facebook's machine-learning algorithms.

Choose the objective that best matches your business goals. For example, if you’re focused on lead generation, calculate your budget based on your industry’s average cost per lead (CPL). If your CPL is $13.87 and you want 500 leads, you’d need a budget of at least $13,870.

🧠 Food for your thought: Focusing on conversion campaigns (Sales and Lead objectives) makes the most sense for small businesses with limited budgets. These campaigns aim directly at actions like sales or sign-ups, which provide measurable ROI and can include an element of brand recognition as a byproduct. Unlike big corporations, small businesses don’t have the luxury of pouring money into campaigns that don’t show immediate results. Their goal is survival and growth, not just recognition. 

The other objectives come in handy if you're a local business targeting your neighborhood, where building trust and visibility in your immediate community can lead to foot traffic and repeat customers.

Step 2: Start small and test the waters

Diving into Facebook ads with a hefty budget is tempting, but rushing isn’t the smartest play. A better approach? Start small, test thoroughly, and scale strategically as you gather data and insights.

Start with a test budget

The temptation to go big is strong, but hold up! It’s smarter to take it slow and steady. Start with a small budget and only scale when you have enough data to make confident decisions. 

For a more robust test:

• Our experts recommend you allocate $20–$35 per ad set daily to test multiple ads.
• If promoting high-ticket products, consider starting with $50 per ad set for more accurate insights.

⚠️ Meta warns us to be careful about adjusting our budget late in the day. For example, if you cut your daily budget from $200 to $100 around 5 PM, the system might have already overspent or not have enough time to slow down delivery.

Run A/B tests to optimize performance

Testing is the cornerstone of a successful Facebook ad strategy. Use your initial budget to run A/B tests on various elements:

• Facebook ad creatives (e.g., images vs. videos)
• Headlines and primary text
• Audience segments

Stephanie, Madgicx’s Chief Marketing Officer, dropped this gem regarding the testing phase: “Don’t expect to spend $100 and immediately start seeing purchases. Testing is about learning—studying what works and refining from there. To speed up the process, study the top brands in your industry. Look at their ads, funnels, offers, and seasonal promotions. Then, adapt what you’ve learned to your brand.”

Observing top brands helps you understand industry standards and benchmarks. You can see what works and what doesn't. It’s a smart way to save time and money when testing. Rather than starting from scratch, you can adapt successful strategies from competitors, making your campaigns more efficient and cost-effective. Plus, using tools to monitor competitor ads helps you spot trends and refine existing ideas, keeping your brand relevant and competitive.

Santiago, our Head of Agency, recommends allocating your budget to test about 10 to 12 ads weekly, split strategically—around 70% for image ads and 30% for video ads. He also suggests testing 4 to 5 variations of primary ad copy and headlines weekly. Focus on your best-performing products, starting with your top three bestselling products, to maximize success.

Leverage organic traffic for retargeting

If you already have organic traffic, Facebook retargeting ads are a powerful way to drive conversions. Retargeting leverages the Facebook Pixel to monitor user activity across your website and Facebook. This allows you to serve ads to people based on the pages they’ve browsed on your site or actions they’ve completed. 

Take this ad, for instance. It targets customers who purchased their deodorant and entices them to try their body mist.

You create a more tailored and meaningful experience by aligning your ads with their interests. When ads feel relevant, users are far more likely to interact with them.

Madgicx’s experts allocate a slightly higher budget ($50–$100 per ad set) to retarget visitors already familiar with the brand for better ROI. Other industry experts recommend a range of $20 to $60, highlighting that finding the right amount often requires trial and error—test and adjust to discover what works best for your business.

Monitor and adjust

Don’t set it and forget it! Monitor key metrics like click-through rate and conversion rate to identify top-performing ads. Regularly analyze performance data to make informed decisions about scaling or reallocating your budget.

Let me share some key benchmarks we use at Madgicx to guide optimization:

• Return on Ad Spend (ROAS): We’ve found that a solid ROAS starts at around 2.2, but a "good" ROAS is typically above 3. Brands with low-profit margins must hit that 3 ROAS mark to make a decent profit. Another source reports that a good ROAS for Facebook ads ranges from 2 to 4. But here’s the thing—we’ve also found that ROAS can vary greatly depending on your business model. Some accounts, especially those with high customer lifetime value, might find a 1 ROAS acceptable if they recoup their costs on subsequent purchases. For instance, the first purchase can be a loss with subscription models, but the business makes up for it over time.
• Cost per Purchase (CPP): This varies based on your product's margins and average order value (AOV). Higher AOV products, like jewelry or luxury items, can tolerate a higher CPP because customer spending justifies it. Let’s say your cost per purchase averages $20, and you aim for 150 purchases; your budget should be at least $3,000 to reach your goals effectively.
• Conversion rate: Wordstream says a reasonable conversion rate for Facebook Ads is about 9.21%. Of course, the exact percentage depends on the type of industry you’re in.

• Cost per Thousand Impressions (CPM): When budgeting for Facebook ads, starting with industry benchmarks like the average CPM of $5.61 (Databox) is helpful. If you’re targeting 100,000 impressions, you’d need a budget of around $561 (100 x $5.61). If you’re selling higher-priced products, you can afford a slightly higher CPM, as your competitors will also bid higher to acquire customers. Remember that the average cost of Facebook impressions may also fluctuate at different times of the year. We published a blog that spills the secrets behind Facebook CPM and how to lower it - you’re welcome 😏

• Cost per Click (CPC): The average CPC across industries is reported to be $0.40. You may have a higher CPC for higher-priced products, but that’s because competitors will bid more aggressively for these higher-margin products.

• Click-Through Rate (CTR): The average click-through rate for Facebook ads is about 1.49%, but don’t stress if your average is lower—we’ve found that you can still achieve a great ROAS even with a low CTR (e.g., 0.3%) as long as your primary metrics like Cost per Purchase look good.

• Frequency: We recommend aiming for a frequency below 3 for acquisition campaigns. Anything above 3 we consider "too high." It can lead to ad fatigue and cause a drop in performance over time. For retargeting, we suggest keeping the frequency between 5 and 6; for retention campaigns, a frequency of 8–9 is acceptable, though higher frequencies can sometimes work, especially with high-performing campaigns. By testing and analyzing how your audience responds, you’ll pinpoint the ideal frequency that balances visibility while mitigating the risk of ad fatigue.

Pro tip 🛎️ If, after 3 days, an ad set isn’t performing, it’s time to shut it down. Focus on turning off underperforming ad sets first, then drill into individual ads. Always review performance daily, using the last 3-7 day windows. If an ad spends over twice your target CPA without meeting your KPIs, it’s time to pull the plug. You’ll ensure every dollar works harder for your business by staying proactive.

Step 3: Base your budget on audience size

Before setting your budget, understand the size of the audience you're trying to reach. 

To do this, define your audience. Facebook’s targeting options let you zero in on specifics like demographics, location, and interests. While a broader audience can increase your reach, balancing that with ad relevance is essential to keep your costs efficient. Targeting a well-defined audience drives higher engagement, leading to better use of your budget and more impactful results.

Step 4: Adjust your budget as you scale

Once you’ve found what works, it’s time to think about scaling. Scaling isn’t just about increasing the budget; it’s also about refining your audience and focusing on the most successful ad types.

If you get positive results, we say it’s best to increase your daily budget in small increments—around 10-20% each week. This helps keep your campaign stable and ensures the algorithm doesn’t have to recalibrate too drastically. Wordstream suggests a similar approach, recommending budget increases of 20% or less. 

From Stephanie’s experience, “If something’s working, don’t touch it. Adjustments should be made thoughtfully to avoid disrupting successful campaigns. Use tools like Madgicx’s Ads Manager 2.0 to manually manage and optimize your ads, ad sets, and campaigns. This allows you to leverage AI Bidding features effectively without sending your ad sets back to the learning phase.”

To scale your ads without losing valuable social proof (likes, comments, etc.), duplicate the successful ad and use the same Facebook ad post ID in the new ad. This ensures that the engagement from the original ad carries over, boosting your ad’s credibility and performance. The 'social validation' from previous interactions signals to new viewers that others find the ad worth engaging with, making them more likely to interact. Learn more about how to find your Facebook ad post ID in our detailed guide.

Well, there you have it. No more wondering, "How much should I spend on Facebook ads?" Crafting the perfect Facebook ad budget is about balance. It’s about creating a flexible framework that grows with your business. Define your goals, start small, test thoroughly, and let the data guide you. 

Every business is different, so take the time to develop a strategy that fits your unique needs. 

Control your Facebook ad spend like a pro with Madgicx 🎓

Managing Facebook ads can feel like tiptoeing on glass—one misstep and your budget goes up in smoke. Enter Madgicx, your ultimate sidekick for effortless ad optimization and automation.

Madgicx’s AI Marketer works around the clock to fine-tune your campaigns, protect your budget, and scale your best-performing ads when it’s time. Think of it as having a 24/7 ad agent who spots underperforming ads and tells you exactly how to fix them. It also prepares everything for you to implement those suggestions with a single click.

Madgicx’s 360° Meta Audit is your ad account's Swiss Army knife, giving you all the tools you need to ensure every dollar you spend works harder for your business. This suite of tools digs deep to uncover every insight you need to optimize your Facebook ads. 

Inside, you will find:

• The Meta Dashboard: This dashboard is your control center for Facebook ads. It offers a snapshot of your entire ad strategy so you can quickly assess how your budget works across different marketing funnel stages. From acquisition to retention, it shows you exactly how your ad spend is impacting your performance, helping you make adjustments in real time to maximize your return.
• Targeting Insights: Want to know which audiences are delivering the most value? Targeting Insights tells you the perfect audience size, the most effective lookalike percentage, and which audience settings drive results. By pinpointing the right audiences, you ensure that your ad spend is focused on the people who matter most, preventing wasted budget on underperforming segments.
• Auction Insights: The best times, days, devices, and placements for your ads are all revealed with Auction Insights. This tool provides data-driven suggestions on when and where to run your Facebook ads campaigns for maximum efficiency. Knowing when to run your ads and where to allocate your budget ensures you’re not overspending at the wrong times or in ineffective placements.

All of this comes together on one super-informative page, making it easy to switch between tabs without wasting time navigating through menus.

Let Madgicx do the heavy lifting—better, faster, and more efficiently than you ever could. Try Madgicx for free today.