How Much Should You Budget for Meta Ads (Facebook and Instagram) in 2025?

If you're unsure what Meta ads will cost you in 2025 — or worse, you’ve wasted money on them in the past — this article is for you.

We work with businesses spending anywhere from $1,000 to $100,000+ per month on Meta, and here’s the truth: there’s no one-size-fits-all number. But there is a proven way to think about budgeting that aligns your spend with real results — not just impressions.

In this guide, we’ll break down the true cost of advertising on Facebook, Instagram, and Threads in 2025, what impacts your performance, and how to build a budget that actually grows your business. This is written for business owners, CMOs, and marketing teams serious about driving revenue — not just clicks.

What Do Meta Ads Cost in 2025?

Based on over 220 million impressions and $1.5M+ in ad spend across real client accounts, here’s where Meta ad costs sit today:

Average CPM (cost per 1,000 impressions): $7.18
Cost per 1,000 reach (unique people): $66.23
Click-through rates and CAC vary heavily by targeting type (see below)

In other words, $1,000 in ad spend can get your brand in front of 140,000+ impressions, but that doesn't mean they’re the right people — or that they’ll buy.

That’s why targeting, creative, and goals matter.

What Impacts Meta Ad Costs the Most?

Meta ad costs are influenced by several factors:

Your Objective: Brand awareness, website traffic, in-store purchases, or leads? Meta charges differently based on what you ask it to do.
Targeting Type: Custom audiences (people who know you) cost less per sale than cold targeting.
Ad Creative: Video tends to outperform static graphics, especially on Instagram Reels and Facebook Stories.
Competition: Your industry, seasonality, and local demand all impact costs.

**One client is currently running 200+ videos ads on Meta is averaging $8/.15/CPM on over 3.6 million impressions.**

What Results Should You Expect at Different Budget Levels?

Let’s take a company doing $3 million/year in revenue. If they allocate 2% to Meta, that's $5,000/month in ad spend.

With a 6X ROAS (return on ad spend), that budget could generate $30,000 in monthly sales. Double that budget to 4% and your revenue impact could jump to $60,000/month — or 20% monthly growth.

Here’s a quick comparison by audience type:

In-Store Purchase Campaigns:

Detailed Targeting: $9.39 CPM | $10.30 CAC
Lookalike Audiences: $9.49 CPM | $12.70 CAC
Custom Audiences: $9.16 CPM | $2.01 CAC

eCommerce Campaigns:

Detailed Targeting: $14.90 CPM | $10 CAC
Lookalike Audiences: $16.36 CPM | $13.52 CAC
Custom Audiences: $14.97 CPM | $7.47 CAC

Takeaway: If your goal is return on investment, custom audiences consistently win.

How Should a Small or Mid-Sized Business Budget for Meta Ads?

Here’s a simple monthly guideline based on annual revenue:

Budgeting 1–2% of monthly revenue for Meta ads is a good starting point. If you’re scaling aggressively, 3–5% is more realistic.

What’s the Difference Between Ad Spend and Agency Fees?

This is one of the most misunderstood topics.

You’ll always pay Meta directly for ad spend. Separately, you’ll pay your agency or freelancer to manage and optimize the ads.

Example Breakdown:
A business doing $3M/year might see:

Organic Social Management: $1,500/mo
Paid Ads Management: $2,000/mo
Ad Spend: $5,000/mo
Total Monthly Cost: $8,500

It’s usually more efficient to outsource paid media, but we recommend in-sourcing your organic content — it’s more authentic when your team owns the voice.

How to Avoid Wasting Money on Meta Ads

It’s easier than you think to burn through budget and get nothing back. Here are three battle-tested ways to avoid it:

Micro-Test Everything
Spend $100 testing two creatives. Scale what wins. Rinse and repeat.
Start Local
Use a tight radius around your physical store (e.g., 5–10 miles) to reduce waste if you're driving in-store sales.
Small, Specific Audiences Win
A $1,000 budget won’t go far targeting 100,000 people. Shrink your audience to 10,000 and your dollars work 10X harder.

How to Track ROI and Break Even on Meta Ads

If you’re running eCommerce, use tools like TripleWhale for clear ROI tracking.
If you’re driving in-store traffic, attribution is harder — but tools like Omni Lightning can help.

You can also use:

Promo codes or in-store coupons
UTM-tagged links
Facebook offline conversions (if set up properly)

Give your campaigns at least 6 months to test, refine, and scale. Good ads don’t become great overnight.

How to Build a Smart, Profitable Meta Ads Budget for 2025

Here’s a framework we use internally:

Set Your Revenue Target
[Insert your growth goal — e.g., $1M increase in revenue.]
Work Backward From ROAS
If you need 5X ROAS, and your product has a $100 margin, you can spend $20 to acquire a customer.
Match Budget to Funnel
Budget more at the bottom of the funnel (custom audiences) and allocate test budgets to top-of-funnel (cold).
Assign 2–4% of Total Revenue to Meta Ads
This gives you enough firepower to scale — without overspending too early.

Final Thoughts: Meta Ads Still Work — But Only If You Do

Meta continues to dominate digital attention in 2025, especially for the 30–65+ age group. But the days of cheap clicks and easy wins are over. You need strategy, testing, and data-driven execution.

If your team wants help developing a budget and campaign plan tailored to your business goals, let’s talk.

Book a strategy call with our team today and we’ll walk you through what’s working right now and what you should be spending based on your goals, location, and customer base.