Solved: Optimizing Facebook Ads Strategy & Budget

Hi there,

Thanks for reaching out!

Happy to give you some initial thoughts on your Facebook strategy. Tbh, a lot of people struggle with this, especially when they're starting out, so you're not alone. The platform can be a bit of a minefield if you don't have a clear plan.

The core issue I see a lot is people focusing on the wrong things, like tweaking tiny details in the ad setup when the real problem is much bigger – it’s usually the budget, the objective, or the offer itself. Your question about a $20 budget for two weeks is a perfect example of this. It shows you're thinking about how to spend as little as possible, which is understandable, but it's the wrong way to look at paid advertising if you actually want results.

Instead of thinking about cost, we need to think about investment and return. We need to build a machine that you can put £1 into and get £2, £3, or even £10 back out. That starts with understanding the fundamentals, not just the buttons you click in Ads Manager. I'll walk you through how I'd approach it from the ground up.

First things first, let's talk about that budget...

Alright, let's be brutally honest here. A budget of $20 over two weeks isn't going to work. It's not even enough to get out of Facebook's 'learning phase', which is where the algorithm tries to figure out who your best customers are. With a budget that small, you're essentially giving the platform a pound and asking it to find a needle in a haystack the size of the UK. It just won't happen.

Think of it this way: Meta's system needs data to learn. It needs to show your ad to enough people to see who clicks, who engages, and most importantly, who converts. Each of those actions costs money. If you're spending just over a dollar a day, you might get a handful of clicks, but you'll get zero conversions. The campaign will finish, you'll have spent $20, and you'll have learned absolutely nothing. It's not an investment; it's just throwing money away.

The real question isn't "How little can I spend?" It should be "How much can I afford to spend to acquire a customer?" The answer to that lies in a metric that most small businesses ignore: Customer Lifetime Value (LTV).

If you don't know what a customer is worth to you over their entire relationship with your business, you have no way of knowing what you can afford to pay to get them in the door. Tbh, this is the single most important number for any advertising campaign. Once you know your LTV, you can work backwards to figure out a sensible customer acquisition cost (CAC) and, from there, a sensible cost per lead (CPL).

Let's break it down. You need three bits of info:

• Average Revenue Per Account (ARPA): How much does a typical customer pay you per month or per year?
• Gross Margin %: What's your profit margin on that revenue after accounting for the cost of goods sold?
• Monthly Churn Rate: What percentage of your customers do you lose each month?

The calculation is simple: LTV = (ARPA * Gross Margin %) / Monthly Churn Rate

Let's say you run a subscription box service that costs £40 a month. Your margin is 70%, and you lose about 5% of your customers each month. Your LTV would be (£40 * 0.70) / 0.05 = £560. So, each customer you acquire is worth £560 in gross margin to you. A healthy LTV:CAC ratio is about 3:1, which means you could afford to spend up to £186 to acquire a single customer and still have a very profitable business. Suddenly, that $20 budget seems a bit silly, doesn't it? It gives you a proper framework for your ad spend.

I've put a little calculator below so you can play with your own numbers. This is the foundation of a proper paid ads strategy. Without it, you're just guessing.

You'll need to stop paying Facebook to find non-customers...

This is probably the biggest mistake I see beginners make, and it's a trap set by Meta themselves. When you create a new campaign, they offer you objectives like "Reach" or "Brand Awareness." It sounds logical, right? You want more people to be aware of your brand. The problem is, you're giving the algorythm a very specific, and very stupid, command.

You're telling it: "Find me the largest number of people for the lowest possible price."

And the algorithm, being the ruthlessly efficient machine it is, does exactly that. It scours your target audience and finds all the people who are constantly online, scrolling endlessly, but never, ever click on ads or buy anything. Why? Because their attention is cheap. They're not in demand by other advertisers, so Meta can sell you their eyeballs for pennies. You are literally paying the world's most sophisticated advertising platform to find you the absolute worst possible audience for your product. It’s a complete waste of money.

Real brand awareness, the kind that actually grows a business, is a byproduct of performance. It comes from a competitor's customer switching to you and telling their friends. It comes from getting results. It comes from conversions.

From day one, every single penny you spend should be in a campaign with a Conversion objective. That means you're telling Meta: "I don't care how many people you show this ad to. I only care about finding the people who will perform this specific action." That action could be making a purchase, filling out a lead form, or booking a call. By doing this, you force the algorithm to hunt for buyers, not just viewers. It will be more expensive per impression, but you're fishing in a pond full of actual fish, not just muddy water.

The difference is night and day. A 'Reach' campaign might get you thousands of impressions for a few quid, and you'll feel good about the numbers, but your bank account won't change. A 'Conversion' campaign might feel more expensive at first, but it's the only way to actually get a return on your investment.

I've mapped out the typical journey for both campaign types below. It should make it pretty clear which path you want to be on.

I'd say your offer is more important than your ads...

Here’s another hard truth: you can have the perfect budget and the perfect campaign objective, but if your offer is rubbish, you will fail. The number one reason I see campaigns fail is a weak offer that doesn't solve an urgent, expensive, or unavoidable problem for a clearly defined audience. A great ad campaign can't save a bad product or a mismatched offer.

Too many founders and marketers are obsessed with their product's features. They want to tell everyone about their "AI-powered synergy platform" or their "handcrafted, artisanal widgets." Nobody cares. People don't buy features; they buy solutions to their problems. They buy a better version of themselves. Your job is to connect your product to their pain.

Before you spend another penny on ads, you need to be able to answer these questions with absolute clarity:

1. Who is my *specific* audience? "Small businesses" is not an audience. "Plumbers in the North of England with 3-5 vans who are losing jobs because they can't schedule quotes fast enough" is an audience. Be precise.
2. What is their urgent, career-threatening nightmare? What keeps them up at night? For the plumber, it isn't "needing a CRM." It's the fear of a bigger competitor moving into their area and stealing all their work.
3. How does my offer solve that exact nightmare? Your offer needs to be a direct, tangible solution. For the plumber, it might be a "15-Minute Quote System" that guarantees they can get a professional quote to a customer before they've even left the property.

Once you have this, your ad copy practically writes itself. You stop selling the 'what' and start selling the 'so what'. You use frameworks that speak directly to their pain.

For a service business, you use Problem-Agitate-Solve. You don't sell "accounting services." You sell peace of mind.
Ad Example: "Staring at a shoebox full of receipts with the tax deadline looming? Worried that one missed expense could trigger a costly audit you can't afford? We turn your financial chaos into a simple, clear picture so you can focus on running your business, not your books."

For a software product, you use Before-After-Bridge. You don't sell a "project management tool." You sell clarity and control.
Ad Example: "Before: Your team is drowning in emails, deadlines are being missed, and nobody knows who's doing what. After: Every project is on track, communication is effortless, and you have complete visibility from a single dashboard. Our platform is the bridge that gets you from chaos to calm."

Notice how none of these examples talk about features? They talk about feelings, problems, and transformations. That’s what sells. If your offer isn't this clear and compelling, pause your ads and fix your messaging first. It is the highest leverage activity you can do.

We'll need to look at who you're actually talking to...

Okay, so you've figured out your LTV, you've committed to a conversion campaign, and you've nailed your offer. Now we can finally talk about the bit you originally asked about: the setup, specifically the targeting. This is where most people get lost in the weeds, testing dozens of random interests without any real structure.

The key is to think like a funnel. Not everyone is ready to buy from you right now. Some people have never heard of you, some are considering their options, and a small few are ready to pull out their credit card. Your targeting strategy needs to reflect this. I usually break it down into three stages: Top of Funnel (ToFu), Middle of Funnel (MoFu), and Bottom of Funnel (BoFu).

Here's how I would prioritise audiences, from coldest to warmest. When you're starting out with a small budget, you'll focus on the top of the list and work your way down as you collect data.

META ADS AUDIENCE PRIORITISATION

ToFu (Top of Funnel - Cold Audiences): People who don't know you.

Your goal here is to find new potential customers and get them to your website. This is where you test your core assumptions about your ideal customer.

• 1. Detailed Targeting (Interests, Behaviours): This is your starting point. You need to get specific. If you sell high-end coffee beans, don't target "coffee." That's way too broad. Target interests like "James Hoffmann," "Aeropress," "Speciality Coffee Association," or followers of specific roaster pages. Think about the magazines they read, the influencers they follow, the tools they use. Group related interests into themed ad sets so you can see which 'angle' works best.
• 2. Lookalike Audiences: Once you have enough data (you need at least 100 conversions, but honestly, more like 1,000 for it to be really effective), these become your most powerful tool. You can create an audience of people who 'look like' your best customers. I'd prioritise them in this order:
  • Lookalike of highest value customers
  • Lookalike of all purchasers
  • Lookalike of people who initiated checkout
  • Lookalike of people who added to cart
  • Lookalike of all website visitors
• 3. Broad Targeting: This is only for mature accounts with thousands of pixel events. Here you trust Meta's AI completely, giving it only age, gender, and location. It can work brilliantly, but you need a lot of data for the algorythm to have learned properly. Don't start here.

MoFu/BoFu (Middle/Bottom of Funnel - Warm/Hot Audiences): People who know you.

This is your retargeting. These people have already shown interest, and your job is to bring them back to finish the job. These audiences almost always have the highest return on ad spend (ROAS). If your budget is small, you can combine these into a single 'Retargeting' ad set.

• 1. Added to Cart / Initiated Checkout (last 7-14 days): These are your hottest leads. They were *this* close to buying. Hit them with ads that overcome common objections, offer a small discount, or show customer testimonials to give them that final nudge.
• 2. Viewed Product / Visited Landing Page (last 30 days): They showed interest but didn't take that next step. Remind them of what they looked at, show them different benefits, or introduce related products.
• 3. Engaged with Socials / Watched Video (last 30-90 days): A slightly cooler audience, but they've still raised their hand. Show them your best-performing content or a strong introductory offer to get them to your site.
• 4. All Website Visitors (last 90 days): Your widest retargeting net. Good for keeping your brand top-of-mind.
• 5. Previous Customers: Don't forget these! It's far easier to sell to an existing customer than to find a new one. Target them with new products, complementary items, or subscription offers.

Structuring your campaigns this way—one for prospecting (ToFu) and one for retargeting (MoFu/BoFu)—brings order to the chaos. You can clearly see what's working at each stage of the journey and allocate your budget accordingly.

You probably should structure your campaigns like this...

So, let's bring it all together into a tangible structure you can actually go and build. Forget complex setups with dozens of campaigns. When you're starting out, simplicity is your friend. It allows you to learn faster and makes it easier to manage.

I recomend a simple two-campaign setup:

1. Campaign 1: Prospecting (Cold Traffic)
2. Campaign 2: Retargeting (Warm/Hot Traffic)

Within each campaign, you use Ad Sets to test your different audiences. And within each Ad Set, you test your different ads (creatives). A key tip: use Campaign Budget Optimisation (CBO). This lets you set the budget at the campaign level, and Meta's AI will automatically distribute it to the best-performing ad sets. It's much more efficient than setting individual ad set budgets.

Here's what that looks like in practice. I've detailed my main recommendations for you below:

You'll need realistic expectations on cost...

Finally, let's tie this all back to cost. A common question is "What should my cost per conversion be?" and the annoying, but true, answer is "it depends." It depends on your industry, your audience, your offer, the country you're targeting, and a dozen other factors. However, we can establish some rough benchmarks to give you an idea of what's normal.

Based on many campaigns we've run, for a simple conversion like a lead or a signup in a developed country (like the UK, US, Canada), you can expect your Cost Per Click (CPC) to be somewhere between £0.50 and £1.50. Then, a decent landing page should convert somewhere between 10% and 30% of that traffic. So, your Cost Per Acquisition (CPA) would be in the range of £1.60 (£0.50 / 0.30) to £15.00 (£1.50 / 0.10). That's a huge range, but it gives you a ballpark.

For something more difficult, like an eCommerce sale, conversion rates are much lower, typically 2-5%. So with the same traffic costs, your cost per sale could range from £10.00 (£0.50 / 0.05) to £75.00 (£1.50 / 0.02). Now you can see why knowing your LTV is so important – a £75 CPA might seem terrifying, but if your LTV is £600, it's actually a brilliant deal.

Below is another calculator to help you see how CPC and your website's conversion rate directly impact your cost to get a customer. Play around with it. You'll quickly see that improving your website's conversion rate is often a much cheaper and more effective way to lower your CPA than trying to get cheaper clicks from ads.

Phew, that was a lot to cover. But hopefully, you can see that a successful Facebook ads strategy is about so much more than just a daily budget. It's a system that starts with understanding your business numbers, crafting an irresistible offer, and then building a logical structure to find the right people and guide them to a sale.

It takes time to learn and implement all of this correctly, and mistakes can be expensive. Getting it wrong means burning through cash with nothing to show for it. Getting it right means building a predictable, scalable engine for growth.

This is where professional help can make a huge difference. An expert can help you bypass the costly learning phase, implement these proven structures correctly from the start, and begin optimising for profit much faster. If you'd like to chat through your specific business and see how we could apply this framework to your campaigns, we offer a free initial consultation. We can take a look at what you've done so far and give you some clear, actionable next steps.

Hope this helps!

Regards,

Team @ Lukas Holschuh