Last week, David Caron, owner of DCD Agency, was a guest at our Digital Marketing class at General Assembly. He educated us all in Facebook ads and, more specifically, video ads. One remark he made, without even really thinking about it, should change our Facebook ads forever. What he said was that, when you’re scheduling a Facebook ad, make sure you do not choose to have a “Daily Budget”. Instead choose “Lifetime Budget” for your ad. Why?

Let Facebook Ads’ Computers Decide

When you choose “Daily Budget“, you’re saying, “whatever you do, spend all this money every day.” That means that, even if it’s not optimal to display an ad, you’ve given Facebook the instruction to do so anyway. You’re going to spend you’re entire daily budget each day, for better or worse.

When you choose “Lifetime Budget“, you’re telling Facebook, “let the computers determine the optimal deployment of my ads according to my budget and time.” Now, I’m sure the folks who manage the Facebook ad delivery algorithms would scoff at such an explanation; however, it’s true.

Earlier this month, I had scheduled an month of a test Facebook ad with a daily budget.  Halfway through the month, we (my client and I) agreed to move some other ad budget from Instagram and Twitter, which were not performing nearly as well as the Facebook ads, over to Facebook.  We changed the ad to a Lifetime Budget for the remainder of the month. The change was immediate and substantial. The performance of the ad set nearly tripled in impressions and CTR, and the cost per click (CPC) declined more than 30%.

Notice the Difference

The point at which the ad performance dips in the image above is when we paused the ad set to make the changes. Facebook isn’t going to provide this advice to the average user. The blog provides a similar explanation as to how Facebook treats the different budgeting methods. However, the article does not even mention the difference in outcomes.

Next time you’re working through a Facebook ad campaign, remember to choose Lifetime Budget and not Daily Budget. Let the Facebook computer algorithm choose the optimal times to display your ad over the lifetime of the ad. You’ll be glad you did.

4 thoughts on “Facebook Ads: Daily Budget vs. Lifetime Budget?

  1. I recently started testing lifetime budget adsets because when I dove into the data I noticed certain points during the day when my cost per conversions were Significantly lower and i wanted to try scheduling the adsets to run at those peak times only and unfortunately facebook won’t allow that for ongoing adsets. All I can say is Wow… I wish I would have tried this month’s ago! My cost per conversions lowered by more than half and the daily number of conversions doubled!

  2. What do you do when you use lifetime budget and your campaign will end? Do you edit your campaign’s end date and budget or do you create a new campaign?

    If you create new campaigns every month, it requires time. But on the other hand, I have heard that creating a new campaign every month is good because it “refresh” Facebook’s algorithm. I don’t know is this true or not…

    • Kevin Sandlin – Owner & President at SharpShooters USA; Believer, Husband, Dad; Volunteer Soldier in the GA State Defense Force

      Yes, edit the campaign’s end date. I’m not sure if creating a new campaign will refresh the algorithm or not. Might be worth a test.

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