Find out how much you need to invest in Meta ads to achieve your goals.

How much do you realistically need to invest in Instagram and Facebook ads in order to meet your revenue goals and scale your interiors business?

It’s something I’m often asked by potential clients, so here’s a super simple three step formula for determining how much you need to invest in Meta ads to achieve your business ambition – and ensure you’re not at risk of over or underinvesting in ad platforms that can provide growth, scale and revenue.

Step 1: Quantify the sales goals of your Meta ads

First things first, it’s important to define your sales goals and quantify the revenue ambition to be derived from your Meta ads in the month ahead. Once those numbers are square, you can calculate just how many products you’ll need to sell in order to meet that number.

Sales goal / cost of product = number of products you need to sell

So, if your goal is to make £2,000 from your Meta ads in the next 30 days and your product retails for £200, you’d need to sell 10 products to meet your revenue goal.

Step 2: Determine how many leads are needed to meet your goals

Once you’re clear on the number of products you need to sell to meet your sales goal, it’s time to ascertain the number of leads/website views needed from your Meta ads.

This can be calculated using your CRM (i.e. Shopify), however if you don’t know your conversion rate, don’t worry – instead, you can use industry averages.

Next, you need to calculate how many leads are needed to achieve your revenue goal:

Number of sales / sales conversion = leads

So, if your goal is to make £2,000 from your Meta ads in the next 30 days and this means selling 10 products versus a conversion rate of 5%, you’ll need 200 leads.

Alternatively, your ads might drive your audience straight to your website product pages, in which case you’ll need to calculate how many landing page views are needed (vs. leads):

So, if 3% of those who land on your product page go on to buy something, you’ll need to divide your sales goal by 3% - which in this example, would equate to 333 landing page views in order to convert 10 product sales.

Step 3: Calculating your Meta ad spend

To determine how much you need to invest in Meta ads to achieve your revenue goal, you’ll need to multiply the number of leads/landing page views by your cost per lead/landing page view.

(Don’t panic if you’re unsure of your CPL/LPV – industry averages are available online and do vary based on your industry, product, offer, website and lots more. Once you’ve starting testing in Business Manager, you’ll be in a position to get much more granular with this metric).

Landing page views X cost per landing page view = ad spend budget

OR

Number of leads X cost per lead = ad spend budget

So, if your cost per lead is £5 and you need 200 leads to achieve your revenue goal, you’ll need to invest at least £1,000 in Meta advertising.

So, what next?

I hope this post has helped to demystify, in quantifiable terms, the minimum you might need to invest in Meta advertising to meet your revenue goals and scale your business.

Of course, the key to succeeding with Meta ads lies in the testing and optimisation, and costs do fluctuate based on ad quality, auction process, seasonality and competition so if you’re feeling lost, contact me to book a free, zero obligation call to explore how Meta advertising can work for your business.

Image credit: @studio.skey