How ad giants control our ad budgets
Facebook earned almost $32.6 billion in ad revenue in 2021, while Google pulled in $209.5 billion. Yep, you read that correctly. Definitely not a typo on our end. Billion.
Let that sink in for a second.
These two behemoths of the digital world are the most popular advertising platforms around, with many marketers using them as the foundation of their digital advertising strategies. And that’s great. But all those zeroes on the revenue number makes you wonder: are you optimizing your ad budget to get the most out of these platforms without overfeeding their bottom line?
What goes into a digital advertising budget?
If only budgets were like the Everlasting Gobstopper from Willy Wonka, life would be so much simpler. Unfortunately, money truly does not grow on trees; instead, a solid ad budget is needed to keep spend in check.
The best digital advertising budgets start with understanding your marketing goals. Are you expecting to drive new customer acquisition? Or are you hoping for increased mindshare in the marketplace?
The goals and KPIs you choose to measure against will help dictate how much money you need. If you’re hoping to drive a link click that ultimately leads to a conversion, that will land you in the CPC (cost per click) category, which is inherently more expensive than CPM (cost per thousand impressions).
Once you have these locked down, you can start to ballpark some figures. If you’re a new company, you can expect to allocate 12-20% of gross revenue to your ad spend. If you’re a company that’s been around for a while, 6-12% is more common.
Which channel should get more of your advertising budget?
Now that you have your Facebook Ads budget and Google Ads budget locked in for the year, it’s time to allocate spend to different platforms. But which tool should get more of the dough? Here are quick rules-of-thumb for determining where to spend your budget:
- If you’re aiming for better targeting with more demographic information, Facebook Ads is better.
- Looking to optimize for traffic that is based on higher intent scores? Google Ads takes the cake.
- Hoping to try your hand at retargeting a specific audience? Facebook Ads is a better platform.
- Want to explore a greater variety of ad types, including search, display and more? Google Ads has you covered.
Once you’ve picked the channels of choice, it’s time to optimize.
How to optimize your Facebook Ads budget
Step 1: Keep Ad Sets Separate
A lot of inexperienced marketers will take all of their ad campaigns and drop them into a few ad sets. However, the best among us recognize that Facebook offers many different ad types: Image Newsfeed Ads, Video Newsfeed Ads, Carousel Ads, Collection Ads, Stories Ads and more.
Keeping these buckets in separate ad groups will allow you to optimize each with a fine-tooth comb, since each medium offers different optimization levers to pull. End result: an optimized Facebook Ads budget with little overlap between ad sets.
Step 2: Narrow Your Targeting
If you cast too broad a net with your targeting, you’ll watch your ad budget drain without many catches to boast. Start small with your target audience, and aim for a click-through rate of at least 4 clicks per 100 impressions (4%).
Step 3: Refine and revamp your creative
Messaging and creative is like a ripe avocado: it can be perfect if timed right, but can become rotten in a blink. Testing your headlines, copy, images and more can give you the ammunition you need to deliver creative that elevates KPIs without sinking your budget.
We recommend running week-long tests for each of the 5 components of an ad, in isolation:
- Start by testing a headline inside of an image, with no copy. Test 10, pick one winner.
- Add an image to that headline to see if it moves the needle
- Take the other headlines you tried and reshape them into body copy for the ad – the best copy is written like a crafty advert.
- Test your CTAs to make sure the language is optimized for the action you’re hoping they take.
Step 4: Set up custom audiences and custom conversions
Custom audiences help you exclude folks who you don’t need to target (i.e. customers who have already converted). This saves you time, and reduces redundancy in your customer’s Newsfeed. Custom conversions let you create rules for events or URLs, based on specific customer actions, which allow you to get specific in how you measure performance.
For example, if you’re a footwear company, you could set up a custom conversion rule that only tracks conversions of a certain shoe color. With these kinds of insights, you can increase ad spend towards that line if it performs better than others.
How to optimize your Google Ads budget
Step 1: Dedicated Landing Pages
Don’t just send users to your home page. That’s a waste of your Google Ads budget and your audiences’ time. Instead, create a landing page that is relevant to the messaging in your ad.
Step 2: Adjust bids depending on keyword performance
Noticing that a certain keyword is leading to a better CTR? Don’t stick with the same bids just because your overall campaign is working. Create micro-adjustments that will move the needle in a big way across the larger scope of your campaign.
One key tip is to take advantage of First Page Bids. These are bid types (with increased cost) that can get your ad to appear on the first page of a search result, which almost always have better performance.
Step 3: Use negative keywords to avoid unnecessary spend
Negative keywords remove certain keywords from your ad list, which prevent you from spending your Google Ads budget on keywords you aren’t converting on. This could save you mounds of budget each month, freeing you up to allocate funds to the keywords that matter.
Step 4: Avoid max bids for branded keywords
A lot of marketers place high max bids for branded keywords. More often than not, this is not necessary, and you can achieve the effect of showing up for branded searches with a medium to average bid.
Step 5: Consider steering clear of multi-keyword ad groups
Although this is what Google suggests, single keyword ad groups are often more relevant to the search at hand and provide a lower barrier to click for your audience.
How To Measure Google and Facebook Ads for Optimization with Joinr
Now that you have a few tricks up your sleeve for optimizing your ad budget across Facebook and Google Ads, it’s important to consider how you’ll effectively measure these two channels so you can know which tips to employ.
While you can manually download CSVs each week or month and run MoM analysis to find trends, at Joinr we believe in a better way. Incoming 7 second sales pitch: Joinr automatically fetches data from Facebook and Google Ads for you, unifies the two data sets, then delivers one source of truth to Google Data Studio for easy analysis. Joinr comes baked with in-depth dashboards that help you uncover a lot of the optimizations highlighted above, like the Facebook Ad Creative Report or the Return on Advertising Spend (ROAS) template
There. Pitch finished. It’s 100% free – so if you’re looking to stay on top of your ad budget and set yourself up for Google and Facebook ads optimizations going forward, this is where you start!