When running a Facebook Ad campaign, you set your budget at the ad set level and then Facebook runs the ads accordingly. There are two ways you can set your budget: by identifying a “Lifetime Budget” or a “Daily Budget.” Most advertisers I encounter have a preference – but don't understand the differences between the budget types or the pros and cons to using each type.
What are Lifetime Budgets
If you want to set a lifetime budget, you must also set a start date and end date for your campaign. When you do this, Facebook will attempt to spend your budget equally from start date to end date. They way the algorithm works is that it figures out how many weeks (Sunday-Saturday) your ads are running, then divides your lifetime budget into weekly budgets and allocates spend accordingly.
This is a good option if you have a specific amount of ad spend to use for a specific project within a specific period of time.
What is a Daily Budget
When you set a daily budget on facebook, you're indicating that you want to spend that amount per day.
In this case, you can opt to set a start date and an end date (like when you run an ad with a Lifetime Budget) or you can set your ad to “Ongoing.” so that it will continue to deliver until you turn it off.
This is often the preferred option if you are running traffic to an evergreen offer or funnel – if you find something that works, you want it to keep delivering until it stops working.
The danger is that some people are forgetful – while working at Facebook I had a couple instances where people forgot they had ads running until the system racked up big charges that they were not prepared to pay. And, unfortunately, Facebook is not forgiving in these situations. You get the impressions, you're on the hook to pay for them.
And here's the kicker: the Facebook algorithm automatically converts a daily budget into a weekly budget just like it does for the lifetime budgets.
What that means, is that you may spend up to 25% more than your daily budget on any given day – and the maximum spend will balance out over the course of that week so that the average is not above your daily limits.
Choosing the Best Budget Type
There is not a difference in outcomes when it comes to which budget type you use. Delivery and performance will be dependent on your entire budget, but not the type of budget you choose. So ask yourself the following questions:
- Does this campaign have a set start and/or end date?
- If so, consider a lifetime budget
- Do you want to run this campaign indefinately, as long as it's performing well?
- If so, consider a daily budget
- Are you nervous you may forget about the ad until billing is due?
- If so, consider a lifetime budget
Either way, ensure you understand how both budget types work to pace your ad spend so that there are no surprises.