Facebook requires advertisers to meet a minimum budget to enable consistent delivery of your ads. At the same time, Facebook uses an auction system to select the best ads to run based on the ads' bids and performance. All ads on Facebook compete against each other in this process, and the ads that Facebook's system determines are most likely to be successful will win the auction.
Campaigns that do not meet Facebook's daily budget minimum requirements per user will error and not launch. To avoid this, the Denim platform requires the daily budget per user to be at least $5 a day.
However, to help your competitive positioning at auction, you may want to consider raising your budget. Facebook will only charge you the bid necessary to win the auction.
Setting Your Budget
When you set your daily, weekly, or monthly budget in the Denim platform, you're essentially setting an average media spend. Let's say, for example, you set a daily budget of $10 per user. Certain days may offer better opportunities for your ad to get results. On those days, you may spend up to 25% over your daily budget, or up to $12.50 in our example.
By allowing some flexibility, Facebook can take advantage of opportunities when they arise in its dynamic ad auction marketplace. However, you don't have to worry about overspending because your charges will average out over the duration of your campaign. If more of your budget is spent on a day with lots of opportunities for results, less will be spent on a day with fewer.
The chart below gives a simplified example of how a $10 daily budget may be spent over the course of a week. The blue curving line shows the overall trend of spending from day to day. The green dots represent what is actually spent on a given day. These daily amounts add up to $70 total and average out to $10 per day.
How much should I budget?
The quick answer is: there is no right answer to this. It all depends on the goal of your various campaigns, the audience you're looking to reach, and things like brand awareness as well.
We encourage Denim customers to test and learn by building and launching ad campaigns using various budget levels. A good place to start is $10 per day per user, and adapt future campaigns in an effort to continue optimizing your advertising efforts.