Facebook ads are a popular way for businesses to reach potential customers. With different ad formats, detailed targeting options, and the massive Facebook user base, ads on Facebook can be a powerful marketing tool.
But like most forms of advertising, Facebook ads come at a cost. When setting up a Facebook ad campaign, one of the important factors to understand is how you will be billed for your ads.
How does Facebook ads billing work?
Facebook bills advertisers based on the actions they want to optimize for. The two main billing models are:
- Cost per impression (CPM) – You pay for each time your ad is displayed, regardless of clicks or other actions.
- Cost per action (CPA) – You pay only when users take a specific action like clicking your ad, viewing a video, or filling out a lead form.
So with CPM billing, Facebook charges you each time your ad is shown to a user in your target audience. With CPA billing, you pay when users engage with your ads in some way.
Do Facebook ads charge per day?
How often you are billed for Facebook ads depends on your payment cycle. There are two main options:
- Daily billing – You are charged at the end of each calendar day for your ad activity that day.
- Monthly billing – You are charged at the end of each calendar month for all your ad activity that month.
By default, Facebook ads use monthly billing. But advertisers can optionally choose to be billed on a daily cycle. With daily billing, you pay for each day’s ad spend individually, while monthly billing aggregates all your charges over the full calendar month.
Benefits of daily billing for Facebook ads
Here are some potential benefits of choosing daily billing for your Facebook ad campaigns:
- More granular cost control – You can closely monitor how much you’re spending each day and pause campaigns if needed to stay on budget.
- Faster spend rate optimization – Daily numbers let you quickly gauge campaign performance and adjust bids and budgets to accelerate or slow down spend.
- Better cash flow management – Spreading charges over each day can help manage cash flow vs. one large monthly charge.
The daily numbers can essentially provide an “early warning system” for your budget and let you quickly optimize your ad campaigns in response to the daily metrics.
Downsides of daily billing
However, there are also a few potential downsides to keep in mind with Facebook ads daily billing:
- More work reconciling daily charges – You’ll need to put in extra time each day to review and reconcile ad charges.
- Harder to predict monthly spend – With fluctuations in daily spend, your total monthly ad costs can be less predictable.
- Daily minimums apply – Facebook requires at least $1 in spend per day for daily billing.
So daily billing does create extra administrative workload, and makes your total monthly ad spend more variable compared to fixed monthly billing.
Minimum daily ad spend
Facebook requires a minimum of $1 in total ad spend each day for accounts on daily billing cycles. If your charged ad spend for the day is less than $1, Facebook will still charge you $1 for that day.
This minimum charge per day applies separately for each ad account you have. So if you run ads from multiple ad accounts, each one needs at least $1 in spending each day to avoid minimum fees.
This minimum can add up over time, especially on days with very low ad traffic and clicks. So make sure to factor these potential minimum charges into your budgeting if using daily billing.
Do unpaid clicks count toward the minimum?
Importantly, the $1 minimum daily spend applies after accounting for any refunded clicks or invalid activity. So if some of your clicks or actions were ruled invalid by Facebook’s systems, those are deducted before checking if you reached the $1 minimum spend for the day.
How to switch to daily billing
If you decide daily billing makes sense for your Facebook advertising, here is how to switch your ad account over to a daily billing cycle:
- Go to your Facebook Ads Manager account
- Click on the settings gear icon in the top right corner
- Go to the Billing section
- Click on the Payments Settings link
- Under Payment Cycle, click Edit
- Select Daily billing option
- Confirm the switch to Daily Billing
Once you complete the steps above, your Facebook ad account will immediately switch over to daily billing. You will now be charged each day based on that day’s ad costs.
Pro-tips for managing daily billing
If you use daily billing cycles for Facebook ads, keep these tips in mind to make the most of it:
- Set up daily ad spend notifications – Get an email or mobile alert on your daily spend totals to stay on top of it.
- Check reports first thing each morning – Review key metrics like clicks, CPM, CPC to optimize that day’s budgets.
- Load extra ad spend budget on key days – Increase budgets on big sales days or promotions to capitalize on momentum.
- Reduce budgets on consistently low-traffic days – Keep a close eye on daily performance metrics.
- Pause lower-performing ads – Kill off campaigns not delivering results to avoid wasted daily spend.
Staying on top of your daily ad spend and performance data takes extra work compared to monthly billing. But the benefits of better optimization and cost control often make the extra effort worth it.
Facebook ad daily spend limits
In addition to choosing daily billing cycles, you can also set a maximum daily spend limit for your Facebook ad accounts. This cap controls the maximum amount you could be charged for a single day’s ad activity.
Setting a daily spend limit can help prevent huge overspend on any given day as your campaigns run. You’ll still aim to spend your full monthly budget, but the daily cap provides an extra safeguard.
Your daily spend limit should be set based on factors like:
- Average daily budget needed to reach monthly goals
- Peak daily traffic and conversions
- Highest expected daily costs based on targets and bids
- Affordability of max daily spend as a portion of budgets
Facebook will try to spend up to the daily cap amount, unless you hit your overall monthly budget sooner. You can adjust the max daily spend limit at any time as needed to manage costs.
Hidden minimums
One catch to note with Facebook daily spend limits – they will often have higher minimum amounts than the headline cap. So your minimum daily spend may be as much as 1/5 of your daily cap, even if your ads perform below this amount.
So be sure to dig into daily minimums before setting caps to understand your true maximum daily costs.
Billing date vs. usage date
One final nuance around Facebook’s daily billing model – the billing date can differ slightly from the usage date:
- Billing date – The date you are actually charged for ad activity.
- Usage date – The date the ad impressions, clicks, or actions occurred.
Due to processing time, billing dates usually lag usage dates by 1-2 days. So the charges on Tuesday’s bill often reflect Sunday or Monday’s ad usage, for example.
Be sure to look at usage date ranges when reconciling billed amounts or evaluating performance, not just billing dates. This ensures you align charges properly with the ad activity that generated them.
Wrapping up
While most Facebook advertisers use the default monthly billing cycle, daily billing offers more granular control over ad costs. With daily numbers, you can closely optimize budgets, bids, targeting and improve performance.
But the extra administrative workload is real. So diligent monitoring and proactive optimization are must-haves to benefit from daily billing. There are also minimums that apply which can impact costs.
In the end, check if the benefits of daily billing outweigh the extra effort for your business. Applying the best billing model and payment settings ensures Facebook ads work as efficiently as possible.