Facebook and Instagram Ad Costs: & Your ROI Calculator

If you’re new to Facebook ads, you might be feeling a little sticker shock. Maybe you expected to spend a few hundred dollars on ads and start seeing results, but your ads manager is telling you that you need a budget of at least $1,500 per month—minimum.

So… is that really necessary? Or is this just a way to get you to spend more?

In this article, I’m going to break it down clearly:

1️⃣ First, we'll go over how social media advertising costs are calculated.

2️⃣ Then, I’ll explain WHY that minimum budget is needed (hint: it’s not random—it’s based on how Facebook’s algorithm works).

3️⃣ Next, I’ll show you why that investment is actually worth it by walking you through real client examples.

4️⃣ Finally, I’ll give you a step-by-step approach to understanding your own potential return.

Stick around, because I’ve got a one-step ROI CALCULATOR so you can understand how much of a return you could create for your. business with the minimum suggested ad spend and the sales price of your product or offer

Understanding Ads Costs

Before we break down that $1,500 recommendation, let’s quickly look at how Facebook and Instagram ad costs are calculated—because it’s not just about picking a number.

When you run ads, you’re entering an auction. You’re bidding for the chance to show your ad to your ideal customer—and other businesses are doing the same. The amount you’ll end up paying depends on things like how competitive your audience is, how relevant your ad is, and how likely someone is to click or convert.

The better your ad performs (meaning people click, engage, or buy), the more efficient your costs can become. But to get your ad campaign started, Facebook still needs a certain amount of data to know who your audience is and how to reach them.

That’s where the idea of a minimum budget comes in. Facebook’s system is built to learn from what’s working—who’s clicking, who’s buying, and how they behave. But to do that, it needs enough activity (data) to make smart decisions. And the data costs money, hence your minimum starting budget. Without that data, your campaign stays stuck in “learning mode,” and performance suffers.

Why Is a Marketing Strategist Suggesting You Need a $1,500 Minimum Ad Spend?

There’s a strategic reason behind this minimum recommendation.

It directly ties into the cost calculations we just reviewed—particularly the importance of generating enough conversions for Facebook’s algorithm to optimize effectively.

When launching Facebook ad campaigns focused on leads or sales, you typically use what’s called a conversion campaign. For conversion campaigns, Facebook’s algorithm needs enough data to move past “learning limited” mode—meaning it has had enough data to clearly identify your ideal customers.

To exit this learning phase, Facebook requires at least 50 conversions per week. After running many successful campaigns, I’ve found that reliably reaching these conversion numbers usually starts around a minimum budget of $1,500 per month.

Less than that, and you might spend money without seeing consistent results because your campaign will not be able to stabilize/optimize/move out of the learning phase.

Note: This $1,500 figure is based on my experience with multiple campaigns and industries, but the exact minimum needed can vary depending on your business, audience size, and ad strategist’s approach.

Real-Life Examples: How This Looks in Action

Example for Online Course Creators

For course creators, we typically run cold traffic ads to a free value offer (freebie) and then upsell them on the course once they’ve had a chance to engage with the brand. This strategy allows potential buyers to demonstrate interest and build trust before making a purchase.

Sometimes, we introduce the paid course offer right away—as early as the thank you page after they claim the freebie. Other times, we simply deliver more free value on the thank you page and make the course offer in a follow-up email sequence.

Here’s an example from a recent client who sells a $409 online photography course.

For this campaign, we:

✅ Ran ads for a free “Cheat Sheet” to both warm audiences and a cold interest-based audience

✅ Encouraged new leads to follow the course creator on Instagram to engage with a strong, growing social community

✅ Enrolled new leads in a 5-day follow-up email sequence with free educational videos and a course offer

Month 1 Results: Investment: $2,000 in ads + $2,000 in strategy and management ($4,000 total) Email Subscribers: 744 new leads Course Sales: 46 courses sold ($18,405 in revenue) ROAS (Return on Ad Spend): $18,405 ÷ $4,000 = 4.6x ROAS

Month 2 Results (After Optimization): Investment: $2,300 in ads + $2,000 in strategy and management ($4,300 total) Email Subscribers: 855 new leads Course Sales: 91 courses sold ($37,219 in revenue) ROAS for Month 2: $37,219 ÷ $4,300 = 8.7x ROAS Cumulative Results Over 2 Months: Total Investment: $8,300 New Email Subscribers 1, 600 (who might buy later, if they didn’t this round) Total Courses Sold/ Revenue: 137/ $56,000 Cumulative ROAS: $56,000 ÷ $8,300 = 6.8x ROAS

This example highlights how initial ad spend helps Facebook’s algorithm “learn” your audience and improve results over time. The first month focused on data collection and audience refinement, and by month two, performance nearly doubled due to optimization and stronger audience targeting.

“Thanks Meredith, Great Results!”- Kristen Karlisch, Director of Karlisch Workshops

Example for E-Commerce Brands

If you're an e-commerce brand, most ad managers will suggest that you start by advertising one hero product—a product that represents your brand best. If you haven’t deemed a hero product before, pick one now as part of your marketing strategy.

Look for the product that sells the most AND has the largest profit margin, and then TEST. Offer your top 3 choices organically for a few weeks and see which one performs best!

Let’s assume you launch your ads with the following numbers: Month 1: You spend $1,500 on ad spend + $1,500 on strategy and management (total investment: $3,000). ROAS (Return on Ad Spend): 1.5X.

At first glance, a 1.5X ROAS might seem low, but it's actually a solid foundation. Many ad strategists—myself included—consider this a reasonable starting point for businesses that already have a proven offer but are new to paid advertising.

This initial phase is about gathering data and allowing Facebook’s algorithm to optimize performance. A positive baseline like this sets the stage for improved returns as we refine the campaign. That means you’d generate $4,500 in revenue.

Product Price: If your hero product sells for $45, that means you’d sell 100 units in month one. As we optimize the campaign—testing creatives, adjusting targeting, and improving performance—your ROAS typically increases over the next few months. By month two or three, it's reasonable to see a 2x or higher ROAS, meaning your revenue would increase without raising ad spend.

👉 And remember: Once a new customer buys your hero product, they’re much more likely to purchase from you again. This increases their lifetime customer value, meaning that the return on your initial ad spend continues to grow beyond the first sale.

Plus, once you have a winning ad funnel in place, you can start introducing upsells and higher-value offers, increasing your average cart value and boosting your overall return on ad spend over time. This is why patience and optimization matter—early returns are just the beginning of long-term profitability

Why You Need to Give Your Ads Time to Work

Many new advertisers feel anxious when they don’t see instant results, but Facebook ads require time to optimize. Here’s a realistic timeline to track your progress:

3 Days: Don’t touch anything yet—let the campaign gather initial data. Early numbers often fluctuate and don’t reflect long-term performance.

7 Days: Continue monitoring results. Some patterns may emerge, but unless there’s a major issue (e.g., zero conversions or very high costs), avoid making changes yet.

14 Days: By now, clearer trends should appear. This is when you can start turning off underperforming ads and focusing your budget on the winners.

30 Days: At this point, your results should be stable enough to make informed business decisions. If your ROAS is meeting expectations, you can begin scaling your budget up by 20% every few days. If results are below expectations, reassess your targeting, creatives, and funnel.

By month two or three, you also unlock the ability to run retargeting ads—showing your brand to people who’ve already engaged with your business but didn’t convert the first time. This often improves return on ad spend even further. This is why I recommend a three-month commitment for my clients. The first month is about gathering data and learning what works, the second month is about refining,optimizing and retargeting, and the third month is where you truly start seeing scalable results.

Ready to Understand What You’ll Get for a 3-Month, $1,500/Month Investment ($4,500 Total) in Facebook Ads?

To make this process easier, I’ve created a free Facebook Ads ROI Calculator. Download it by clicking HERE

Simply enter your numbers and clearly forecast potential outcomes based on your ad spend and expected returns.

📩 [Curious if Facebook ads will work for you? Download the free Facebook Ads ROI Calculator now and see exactly what returns you could expect from your investment!

Facebook Ads Budget FAQs: Real Talk for Smart Business Owners

Can I run Facebook ads with less than $1,500 per month?

Yes, you can, but it really depends on your goals. If you're hoping to generate consistent leads or sales, anything under $1,500/month may not give Facebook enough data to optimize. That’s because Facebook’s algorithm needs at least 50 conversions per week to move out of the “learning limited” phase. Spending less might give you some data, but it’ll likely be inconsistent and harder to scale.

Why do ad costs vary so much from business to business?

Several things impact your costs—your industry, your target audience, your creative, and even your ad objective. For example, ads targeting a luxury service will usually cost more per conversion than those promoting a low-cost impulse buy. Highly competitive niches like coaching or wellness also tend to drive up costs. That’s why some businesses can spend $10 per lead while others pay $50+.

How long does it take for Facebook ads to work?

Most ad campaigns need at least 30 days to stabilize. The first 3–7 days are all about Facebook collecting data. Week two is for early insights, and by day 14, you can start trimming what isn’t working. The real magic happens in month two and beyond, once the algorithm has fully “learned” who’s converting.

What if I’m not seeing results in the first week?

Short answer: probably not. Most of the time, your ads are still in the “learning” phase, which means results can look weird at first—high CPMs, expensive clicks, or no conversions. Give it at least 5–7 days unless something is clearly broken (like a bad link or no impressions). Cutting things off too early is like pulling a cake out of the oven after 5 minutes—it won’t be fully baked!

What kinds of ads perform best on a $1,500 budget?

For most of my clients, the best-performing setup includes a cold traffic campaign to a freebie or hero product, followed by retargeting ads to those who didn’t convert the first time. You want a tight funnel: a clear message, one strong call-to-action, and good creative that grabs attention. If your offer has already worked organically, paid ads will likely amplify that success.

How do I calculate if the ad spend is actually worth it?

You want to know your cost per acquisition (CPA) and compare that to your average customer value. For example, if you spend $1,500 and get 50 sales of a $100 product, you made $5,000 and net $3,500. The goal isn’t just low costs—it’s a strong ROI based on your business model. My ROI calculator can help you forecast your potential profit before you invest.

What if I don’t have an ad strategist yet?

You don’t need a strategist to get started, but having one can save you money and time in the long run. A good strategist helps optimize your funnel, advises on creative, and makes sure you’re collecting the right data. When you’re ready to scale with confidence, a strategist is worth every penny.

How do I know if Facebook ads are even right for my business?

If your offer has worked before—through referrals, organic traffic, or word of mouth—Facebook ads can likely amplify that success. The key is having a proven product or service and knowing who it’s for. If you're still figuring out your offer or your audience, you might waste ad dollars guessing. But if your funnel converts, Facebook ads can become your #1 growth tool.

Facebook and Instagram Ad Costs: The Real Numbers, Real Results & Your ROI Calculator