Solved: Best Starting Daily Budget for ABO Creative Tests

Hi there,

Thanks for reaching out!

That's a classic question, and honestly, one of the most common ones I see. The short answer about budget is simple, but the real answer, the one that'll actually make a difference to your new business, is a fair bit more involved. Most people get this bit wrong right at the start. They focus on finding the 'magic number' for a daily budget, when the real problem is usually something else entirely. Let's get into it, because fixing this mindset is probably the most valuable thing you can do for your advertising right now.

We need to debunk the "perfect starting budget" myth...

Alright, let's tackle your direct question first before we get into the stuff that really matters. What's a good starting budget? The honest answer is: there is no single good number. It completely depends on what a conversion is worth to you. Not just the initial $43 sale, but the whole value of that customer over time.

Most agencies or 'gurus' will give you a vague answer like "$20 a day per ad set". That's terrible advice. Why? Because it ignores the maths of the platform. The Meta alogorithm needs data to function. It exits the 'Learning Phase' after it gets about 50 conversions per ad set in a 7-day window. If your budget is too low, you will never, ever exit that learning phase. The algorithm will be stuck guessing, and your costs will stay high and unpredictable. You'll then turn the ad set off thinking "it didn't work", when in reality, you never gave it enough fuel to even start the engine.

A much better rule of thumb, just as a starting point for thinking, is to set your daily budget at around 3 times your target Cost Per Acquisition (CPA). Since you don't have a stable CPA yet, we can use your AOV as a proxy. So, $43 AOV x 3 = $129 per day. Per ad set.

I can already hear you thinking, "That's almost $400 a day! I can't afford that for a test!" And you're right to feel that way. That's a huge amount of money to risk on a new website. This feeling is a massive clue. It's telling you that the problem isn't the budget number itself, but the entire strategy and structure you're using. You're trying to run a playbook designed for a scaled-up business with thousands of data points, but you're at day one. So, let's throw that playbook in the bin and build one that actually fits your situation.

Your bigger issue isn't budget, it's your cold start...

This is the absolute heart of the matter. Your Meta pixel has only recorded 15 purchases. In the grand scheme of things, that's practically zero. The algorithm's job is to analyse the users who convert and then go find millions of other people who look just like them. But with only 15 data points, it has no clear picture of what a "customer" looks like for you. It's like trying to describe a person's entire personality based on them saying "hello" once. It's impossible.

When you run a conversion campaign with so little data, you are paying a premium for the algorithm to guess. Every expensive click, every non-converting visitor... that's you paying for Meta's education. It's an incredibly inefficient way to start.

Your proposed structure of 3 ABO ad sets is making this problem even worse. You're taking your tiny, precious budget and splitting it into three separate little pots. This means each ad set gets less data, learns even slower, and makes it almost certain that none of them will ever exit the learning phase. You've essentially designed a system that fragments learning and guarantees slow, expensive results. It's a common mistake because it *looks* organised and scientific, but it's the opposite of what you need right now.

What you need is to consolidate your spending and learning into one place to get the data flowing as quickly and cheaply as possible. You need to feed the pixel. Before you start dissecting which creative works best or which interest is the winner, you just need to get to your first 50-100 purchases through ads as efficiently as you can. Forget about granular testing for now. The goal is singular: get more data.

You're asking the wrong question: It's not about Cost Per Acquisition, but what you can *afford* to acquire...

This is the mindset shift that separates struggling businesses from ones that scale profitably. You're worried about the cost of a conversion, and you're anchored to your $43 AOV. But what if a customer who spends $43 today goes on to spend another $200 with you over the next year? Suddenly, paying $50, $60, or even $80 to acquire them doesn't seem so bad, does it? It looks like a brilliant investment.

The real question isn't "How low can my CPA go?" but "How high a CPA can I afford to acquire a truly great customer?" The answer is your Lifetime Value (LTV). This is the total profit you'll make from an average customer over the entire time they do business with you.

Let's break down the maths. It's simpler than it sounds.

-> Average Revenue Per Account (ARPA): For you, this is your Average Order Value, so $43.
-> Purchase Frequency: How many times a year does a customer buy from you? Let's guess they buy 3 times a year for your product.
-> Customer Lifetime: How long does a customer stick around? Let's say 2 years.
-> Gross Margin %: What's your profit margin on that $43 sale after product costs? Let's assume it's 60%.

The calculation for total revenue is: $43 (ARPA) * 3 (Purchases/Year) * 2 (Years) = $258 total revenue.
The LTV (profit) is: $258 * 60% (Gross Margin) = $154.80.

So, each customer isn't worth $43 to you; they're worth over $150 in pure profit. A standard rule of thumb is to aim for a 3:1 LTV to Customer Acquisition Cost (CAC) ratio. This means you can afford to spend up to $154.80 / 3 = $51.60 to acquire a single customer and still have a very healthy, profitable business. All of a sudden, that initial $43 sale might even be a loss leader, and that's completely okay. You're playing the long game.

This number, your affordable CAC, should be your north star. It dictates your budget, your testing timelines, and your definition of success. Here's a calculator to play with your own numbers.

Here's a better way to structure your initial tests...

So, we've established that your current structure is working against you. Let's build a new one designed for one thing: warming up your pixel as efficiently as possible. I call this the 'Pixel Warming & Audience Discovery' phase. Your goal here is to get your first 100+ purchases tracked by the pixel.

Here's the structure:

-> Campaign Objective: Sales. Always optimise for the final action you want. Don't listen to anyone who tells you to run "Reach" or "Traffic" campaigns to warm up a pixel. That teaches the algorithm to find people who click, not people who buy. It's actively harmful. You are paying Facebook to find non-customers.

-> Budgeting: Campaign Budget Optimisation (CBO), not Ad Set Budget Optimisation (ABO). Set one budget at the campaign level and let Meta decide how to spend it. Why? Because the algorithm is smarter than us at allocating budget in real-time. It will automatically shift spend to the ad set and ad that is getting the best results, without emotion. This consolidates learning and gets you results faster.

-> Ad Sets: You only need two to start.
1. Broad Audience: Target your country, age, and gender. That's it. No interests. This sounds crazy, but with a CBO campaign, you give the algorithm maximum freedom to find your buyers. It often uncovers audiences you would never have thought of.
2. Interest Stack: Take your top 5-10 best-guess interests and stack them all into ONE ad set. Don't separate them. Again, we want to give Meta a large pool to fish in, not tiny little ponds. This lets the algorithm find the best pockets of performance within your interest ideas.

-> Ads: Put all your creative ideas (I'd aim for 4-6 different ones) into BOTH ad sets. Use different images, videos, and headlines. Let CBO and the algorithm figure out which ad creative resonates with which audience. You'll often be surprised which one wins.

This structure is powerful because it's simple. It focuses all your budget and the algorithm's learning power on a single goal. Instead of three separate learning phases in your old ABO setup, you have one unified learning process. You'll get to 50 conversions faster, exit the learning phase faster, and get to a stable, predictable CPA much, much sooner. Only after you've got 100+ conversions and a stable CPA should you even consider moving to a more granular ABO testing structure.

And what if your ads are fine, but your offer is the problem?

We've spent all this time talking about ad account structure and budget, but here's the brutally honest truth: the number one reason campaigns fail is the offer. You can have the best targeting and the most beautiful ads in the world, but if what you're offering isn't compelling, nobody will buy. It's that simple.

You have a brand new website. That means you have zero trust with potential customers. Why should they give you, an unknown entity, their credit card details for a $43 product when they could buy something similar from Amazon or a brand they already know? Your offer and your website have to work twice as hard to overcome this trust deficit.

You need to ask yourself some hard questions:

-> Is the value proposition crystal clear? Within 5 seconds of landing on your site, can someone understand exactly what you sell, who it's for, and what problem it solves? "Handcrafted jewelry" is a description, not a value proposition. "Handcrafted jewelry that won't tarnish, guaranteed for life" is a value proposition.

-> Are you removing all risk? With a new store, risk is the customer's biggest fear. Are you offering free shipping? Free returns? A money-back guarantee? These aren't just perks; they are essential trust signals for a new brand.

-> Is your offer compelling enough? Why should they buy *now*? A first-time customer discount (e.g., "15% off your first order") can be a powerful motivator. A bundle deal (e.g., "Buy 2 get 1 free") can increase your AOV and make the ads more profitable.

-> Does your website look trustworthy? Do you have high-quality product photos? Do you have an 'About Us' page that tells your story? Do you have easily accessible contact information and a privacy policy? These small details make a huge difference in whether someone feels comfortable buying from you.

Often, founders get so focused on the ad platform that they forget to optimise the destination. I've seen clients double their conversion rate not by changing a single thing in their ad account, but by rewriting their landing page headline and adding a trust badge. Before you spend hundreds or thousands on ads, make sure the destination is actually ready to convert the traffic you send there.

I know this is a lot to take in, and it's a completely different answer than the simple budget number you were probably hoping for. But this strategic approach is what actually works. It's about building a solid foundation first, so that when you do start to test and scale, you're doing it on solid ground, not quicksand.

I've detailed my main recommendations for you below in a more structured way:

As you can see, it's a process. It's about methodically moving from one stage to the next, rather than trying to do everything at once. This all might seem complicated, and frankly, it can be. Getting this wrong at the start can be incredibly expensive, not just in wasted ad spend but in the time it takes to get any real momentum.

This is where professional help can make a huge difference. An experienced eye can help you set this foundation up correctly from day one, interpret the data as it comes in, and make the right strategic decisions about when to move to the next phase. We do this all day, every day. For instance, we worked with a women's apparel brand that was facing similar challenges. By implementing a more strategic and simplified account structure, we helped them achieve a 691% return on ad spend.

If you'd like to walk through your ad account together and build a proper, tailored strategy for your specific situation, we offer a completely free initial consultation. It's a no-pressure chance for us to give you some direct, actionable advice and for you to see if we might be a good fit to help you grow. It's often the most valuable 30 minutes a new business owner can spend on their marketing.

Hope this helps!

Regards,

Team @ Lukas Holschuh