March 9, 2020

How to Decide on the Best Budgets for Your Ad Campaigns

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When venturing into social media advertising the explanation given behind the elements can be dry. You will find definitions for the various factors involved in creating and running an ad campaign, but what you are likely wondering is: "How does budget affect who sees my ad?" "How does this work?" At AmpliPhi Social Media Strategies, Client Success Manager Lauren Miles has gained extensive knowledge on the process of running these social media ads. Lauren gives an inside look to running ads and some of the best practices behind the best budgets for your ad campaigns.

How does budget affect who sees my ad? How does this work?

Imagine an auction being run behind the scenes in cyberspace. This is like what happens during the ad bidding process on social platforms. Each time we refresh our home pages, this auction is run and WE are the items advertisers are bidding on. A number of paddles go up to ‘buy’ someone seeing an ad, which will determine how high the winning bid is. In larger markets like New York or LA, the cost to reach a 21+ year old woman who is interested in Joanna Gaines and wine will be higher. There are additional advertisers in these markets who likely have more money to spend and can beat you out during the bidding process.

This is why we encourage the use of data-driven audiences. Once you begin to understand the custom audiences of users (for instance, those who may have engaged with your company on Facebook), you move up higher in their propensity to enjoy or relate to your content, therefore giving you a leg up in the auction process to achieve them at a lower cost.

Social platforms do not want to show us ads we aren’t interested in. Clicking and buying that item we saw on Instagram matters less than if we click to 'hide ad'. If users stopped seeing relevant ads (for example, showing diaper ads to someone who doesn’t have any children), then the platform's members may start to use the platform less and advertising dollars would dwindle.

Unlike Facebook, LinkedIn allows for both a daily budget AND a lifetime budget. 


Daily Budget: When a campaign is set to a daily budget, the platform will stop showing the ad once you reach your spend threshold for a specific day. This means that if you wish to spend $5 a day for 30 days, you can be sure that the ad will run for those 30 days, and will be at or around $5 each day*. This type of budget is best for long standing ads that promote brand awareness.

The downside to limiting yourself to a daily spend means missing out on potential targeted audience members who could see that ad if you’ve already reached your budget for the day. 

*LinkedIn Note: There may be a short period of time after your budget is reached when your ads continue to display. You will be charged for clicks or impressions that are delivered during that time up to 20% beyond your daily budget.

Lifetime Budget: Selecting a Lifetime Budget is the best option if you wish to get your ad to as many people in your audience as quickly as possible. You set your auction limit and the platform goes to bat for you in an attempt to win as many individuals in your target audience as your budget allows. Once the platform spends your budget, your ad will stop running.

With LinkedIn allowing for both a Daily and a Lifetime budget you can have the peace of mind that knowing that your ad will not spend more than your allotted daily amount, but also will not exceed a certain overall budget.

When searching the internet for advice on how much to spend, or how often to post, I’m sure you have become frustrated that this information-these magic numbers-do not exist. Research your area and take the time to learn what works and does not work for you.

Have you tried ads on various platforms? How have you become more comfortable when deciding on a budget? Let us know how you've figured out the best budgets for your ad campaigns!
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Meet the Author

lauren miles

Lauren is a Client Success Manager at AmpliPhi Social Media Strategies. She has continually proven to be a valuable asset to our team with her ability to develop, create and implement client training materials and her consistent growth and knowledge with strategic planning and website development. 

Lauren graduated with honors from the University of Florida earning a BA in Economics and a minor in Retail Leadership. Lauren is based in Fort Myers, FL, as our only remote team member.

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