"How much should I spend on Facebook ads?" is the single most common question small business owners ask before launching their first campaign. And it's the wrong question — because the answer depends entirely on your industry, goals, and how well your campaigns are optimized.

What you should actually be asking is: "How do I make every dollar of my Facebook ad spend work as hard as possible?"

2026 Facebook Ads Cost Benchmarks

Before setting a budget, you need to understand what things actually cost on the platform right now.

Average costs across all industries (2026):

These are averages — your actual costs will vary based on your industry, targeting, creative quality, and campaign optimization. Competitive industries like insurance, legal, and real estate see significantly higher costs, while local services and niche e-commerce often see lower ones.

Important context: Costs have risen steadily since Apple's iOS privacy changes. CPMs are higher, attribution is harder, and the algorithm needs more data to optimize effectively. This means small budgets face a bigger uphill battle than they did 2-3 years ago.

Recommended Starting Budgets by Business Type

Local service businesses (plumbers, dentists, salons, etc.)

Recommended: $500 – $1,500/month

Local businesses typically target a small geographic radius, which keeps costs lower. Your primary goal is usually lead generation (phone calls, form fills, bookings). With $500/month, you can run 2-3 campaigns targeting different services or audiences.

E-commerce stores

Recommended: $1,000 – $5,000/month

E-commerce needs more budget because you're often targeting broader audiences and optimizing for purchases. You also need budget for retargeting past website visitors. Below $1,000/month, it's difficult to generate enough conversion data for the algorithm to optimize effectively.

Lead generation businesses (B2B, SaaS, consulting)

Recommended: $1,000 – $3,000/month

Lead gen campaigns require testing different offers, landing pages, and audience segments. Higher-value leads (B2B, SaaS) justify higher acquisition costs, but you need enough budget to test your way to a winning formula.

App install campaigns

Recommended: $1,500 – $5,000/month

App install campaigns require significant volume to optimize. Meta's algorithm needs at least 50 conversions per week per ad set to exit the learning phase, so you need enough daily budget to hit that threshold.

The Hidden Cost Everyone Forgets: Your Time

Here's the budget line item most small businesses ignore — the time you spend managing campaigns.

Manual campaign management takes 10-20 hours per week for a business running multiple campaigns. That includes:

If your time is worth $50/hour, that's $2,000 – $4,000/month in opportunity cost on top of your ad spend.

The alternatives and their costs:

Option Monthly Cost
Hiring a freelancer $500 – $2,000/month
Hiring an agency $1,500 – $5,000/month (plus percentage of ad spend)
Using an AI-powered tool like Neo $49 – $129/month

This is where the real math gets interesting. An AI tool that costs $49/month and saves you 10+ hours per week is an enormous force multiplier for a small business.

Budget Allocation Framework

For new businesses (no existing audience)

For established businesses (existing customers and website traffic)

The key principle: don't put all your budget into one campaign. Diversifying across campaign types and audiences reduces risk and gives the algorithm more data to work with.

Month-by-Month Scaling Plan

Month 1: Testing Phase ($10-20/day)

Launch 2-3 campaigns with different objectives. Test 3-4 audience segments per campaign. Run 2-3 ad variations per ad set. Goal: identify which audiences and creatives show early promise.

Expected outcome: You'll find 1-2 winning combinations and waste money on the rest. This is normal.

Month 2: Optimization Phase ($20-50/day)

Kill campaigns and ad sets that didn't perform in month 1. Scale budget to winning ad sets (increase by 20% every 3-4 days). Launch new creative variations for winning audiences. Goal: establish consistent cost-per-result metrics.

Month 3: Scaling Phase ($50-150/day)

Aggressively scale proven winners. Launch lookalike audiences based on your best customers. Add retargeting campaigns for website visitors. Set up automated rules to pause ads above target CPA.

Month 4-6: Growth Phase ($100-500/day)

Expand to new audience segments and campaign types. Test new offers and landing pages. Increase retargeting budget as your pixel data grows. Continuously refresh creative (every 2-4 weeks).

Critical rule: never increase a campaign's budget by more than 20% at a time. Large budget jumps reset the algorithm's learning phase and usually result in worse performance.

How to Maximize Every Dollar With AI

The difference between a well-optimized campaign and a poorly managed one can be 3-5x in terms of cost per result. Here's where AI tools earn their keep:

Real-time monitoring. An AI agent watching your campaigns 24/7 catches a failing ad set at 2 AM instead of letting it waste money until you check in the next morning.

Automatic budget reallocation. When one ad set is performing at half the target CPA and another is 3x over, AI can shift budget instantly — something a human might do once a day at best.

Kill/scale thresholds. Set your maximum acceptable CPA and minimum ROAS, and let the AI enforce those boundaries automatically. No more emotional attachment to underperforming campaigns.

Pattern recognition. AI can identify performance trends across your campaigns that a human might miss — creative fatigue, audience saturation, day-of-week patterns — and recommend adjustments before problems get expensive.

The Bottom Line

There's no universal "right" amount to spend on Facebook ads. But here's a practical framework:

The small businesses that succeed with Facebook ads in 2026 aren't necessarily the ones with the biggest budgets — they're the ones that optimize relentlessly and respond to data quickly.