 What's going on guys, welcome to a new video. So today we're going to be discussing the budgets in which you put into your Facebook ads. And more specifically, do five pound Facebook ads still work in 2021. So the budget in which you dedicate towards your Facebook ads can significantly impact the results. And unless you understand the impact it can have and kind of like the role in which your budget plays, then it can lead you to making poor decisions. So for example, if you've been running an ad set for three, four, five days and you just think the results are really poor, obviously you're going to switch that particular ad set off. Whereas if you had had perhaps dedicated a bit more budget, it might have then gone on to optimize and make you hundreds of pounds, if not thousands, if not tens of thousands. When you look at successful ad accounts, what you'll usually find is that there's perhaps only maybe half a dozen ad sets, which are responsible for bringing in like 90% of the total revenue, the total sales. But then to find that one ad set which can potentially make you hundreds of thousands of pounds sometimes takes you say 30 ad sets or 40 ad sets to test and kind of sift through what's working, what isn't working to then go on and scale the correct one. And this is why your budget plays such an important role. And with that being said, guys, thanks for tuning in. Hope you enjoy the video. I hope you learned something new and let's jump straight into it. So five pound Facebook ads then, do they still work in 2021? In order to understand this, we need to first understand how the Facebook ads, pixel works and how the system actually works. And then you can understand the role in which your budget plays, which will then kind of make everything a lot more crystal clear and more understanding. So when optimizing, this is taken from the Facebook business manager helper. If you're not familiar with it, I definitely recommend bookmarking it and using it as your reference when it comes to understanding and learning how the algorithms and the pixel works and so on and so forth. So what they say, this is Facebook themselves is when optimizing for conversions, we recommend choosing one that happens 50 times per week at a minimum, the minimum, the keyword there being minimum. Our system needs that many to learn from. Our system needs to learn so it can deliver your ad to the right people at the right time to get you the best results. So basically what does this mean? If you're not achieving this, your ad sets are not optimized. So if you're running conversion ad sets at the moment with a purchase objective, if that particular ad set isn't getting 50 conversions every single week, then essentially it's not optimized and it's not performing at its best. Therefore, obviously, five pound Facebook ads are not an efficient way to run profitable campaigns unless in the very rare case, you are achieving super cheap conversions. So if you're spending five pounds per day in this example here, that equates to 35 pounds per week. If we take that 35 pounds divided by the 50 conversions, unless you're achieving a conversion of 70 pence, then unfortunately your ads won't be optimized and they won't be performing at their very best. Now obviously this is super unrealistic if you're running purchase campaigns. I would typically try and budget for anywhere between sort of 10 and 15 pounds when starting off. That is if it's going out to a cold, interested audience. When it comes to things like retargeting campaigns or look-alike audiences to some extent, then you can achieve cheaper conversions of maybe five to 10 pounds. But to try and run a business consistently, hoping for conversions of around a pound or 70 pence, in my opinion, it's just not going to happen. You're not going to be able to sustain that for very long, if at all. So what does this mean for five pound Facebook ads? Then there is still a place for them if you use them in the correct mind, in the correct purposes and this is when you are running a test. So when you're running a test, then it's not so much about getting every ad set to optimize and because it's going to cost you a fortune basically. It's about giving each ad set in which you're testing an equal spend, which can be five pounds per day, switching them all off, evaluating the results and then choosing the ones to then progress into the scaling and optimization phase. If you've watched my past videos on Facebook ads, you'll hear that I talk about two different things when you're running a Facebook ad you either have a testing strategy or you have a scaling and optimization phase. When it comes to scaling, when it comes to optimization, when it comes to making a profit, then in my opinion, there's no place realistically for the long term for five pound per day ad sets. As a test though, they can be used because it's not so much about trying to be as profitable as possible. It's just about kind of throwing your ad out there and seeing where the bites come from, where the interests come from. So your budget is kind of not irrelevant, but it's kind of relevant, relative, sorry, to what your overall budget is. So if you're looking forward to basically spend five pound per day on 10 different ad sets, let's say, then by all means go ahead and do that. One thing that's really important to keep in mind when you are running these testing campaigns is because of how much you will have spent and because they won't have been optimized, you have to keep in mind how many you've reached, how many people you've reached in comparison to your overall audience size. So if you've got an ad set out there now which has an overall audience size of five million people and you're spending five pounds per day, then over the course of three days you're gonna reach roughly one to 2,000 people, let's say, and one to 2,000 people against the overall five million audience size, that's such a tiny, tiny percentage that it's not gonna give you an accurate representation of that audience as a whole of whether it's a good or bad one or not. And that is why smaller audiences can sometimes be a better option for you. Do not neglect them, make sure you test smaller audience sizes, everything from 10K to 50K to 100K, upwards of five, 10 million if you so want to, just make sure you don't rule them out altogether. A better way to kind of explain this or put it into context is if you wanted to sell something at auction, whether it's a particular product or antique or your house, before you put it up for auction, you went into the auction room of 200 people and you wanted to first find out if anybody was gonna actually buy it or not before you commit to selling it. So there's 200 people in the auction room and you go up to two people and ask them and they both say no. If you take their word as kind of like a representation of the whole room, you might kind of walk away not knowing that the other 198 people that you didn't ask would actually be super interested because there's lots of people interested in your product. It's gonna drive the price up and it's gonna be super profitable. So just keep that in mind. The higher percentage of the overall audience in which you can test, then the more accurate representation of whether that's a good audience interested in your products or not. Hopefully I've made that as clear as possible and you're kind of following along and starting to understand the point that I'm trying to put across. But any questions at all, make sure you do ask. Just put them in the comment section down below. I do respond to everybody so I'll be more than happy, sorry, to help you out in the comment section below. So what does all this mean then? Just a very quick recap before you go. You need a higher budget when scaling and optimizing for maximum profitability for two reasons. Number one, to outbid everybody using five pound. Facebook ads, five pound is such a common budget. If you don't know, then Facebook ads works on kind of like a bidding system. The two biggest kind of influencers are the budget because obviously Facebook is gonna give the more higher value kind of impressions to the people spending more, it makes sense. And number two is how well your ad is suited for your audience. If you have a really poor quality ad, doesn't matter how good your budget is, you're always gonna get kind of like the dregs or the lower quality side. And then point number two, the most important one to optimize your ad set by hitting 50 conversions per week minimum. If you can, try and go for 100 because the more you get, the more optimized, the more kind of informed and the faster your pixel will learn, your ad set will learn and the better the results will be. So ultimately then, is there a place for five pound Facebook ads? Yes, but only when testing. For example, if you achieve a cost per purchase of 10 pounds and you want to get that 50 conversions per week, roughly you'll have to spend 500 pound weekly budget for one ad set in order to get it optimized. Now obviously this is super unrealistic if you're testing because if you wanna test 10 different audiences at 500 pounds each, you're looking at five grand just to run a test. So in this case, it'll be much better to use the smaller budgets and kind of just keep in mind the things I've spoke about in this video that might not necessarily be optimized or the most accurate representation, but at least then it gives you an idea because every ad set you do test will have spent the same amount and you can pick the ones with the highest click-through rate, the ones with the cheapest clicks, the ones with the highest quality ranking, one with the most purchases and then take those into your scaling and optimization phase where you can use this formula then to work out how much you need to spend per week in order for it to optimize and essentially produce maximum probability. And with that being said then guys, I'm gonna wrap the video up there. I really hope you learned something new. I really hope you understood the kind of points and information I was trying to put across. Any questions that follow on from this, please do make sure you leave them but I'll be more than happy to help you out. And then one final very quick thing before you go, if you are looking for a course by myself that comes from my full support and guidance. So if you need help with Facebook ads right now, if you were to join, we can jump into your ad manager right away, start looking at the campaign, start looking at your store, anything you need help with business-wise, then I can help you out with that. All you've got to do is make sure you're a part of the Ecom Academy. There is of course the content side of things as everything. I'll put a link in the video description below so you can check out all that info out first. And if you still have your hesitations and questions, there is a free callback service. So if you click here, book a callback with me, we can hop on the phone, me and you, talk one to one and just talk about what's involved and how it can help you. Thanks again for watching and I'll see you in the next one.