If you own a business and are thinking about using Facebook advertising, then you may be asking, “how much will advertising on Facebook cost?”
That is one question that many business owners have asked, especially when it comes to advertising. The most basic answer that you often get to this is “well, it depends.”
However, there is a better answer than it depends.
Below you will find out the average cost of advertising on Facebook and what type of elements will affect those costs.
The Average Cost for Facebook Advertising
The most significant answer that gets seen everywhere that you look for advertising costs is that it depends.
However, there is a baseline that you can go from when it comes to thinking about costs:
If you are using cost per click (CPC), then advertising on Facebook costs around $0.27 per click. If you are using cost per thousand impressions (CPM), then the cost is around $7.19.
The truth is that the cost will depend on what you are looking for. Starting advertising on Facebook using the averages above in your mind will set you up for failure. Some essential factors determine the cost of your Facebook ads.
Facebook Ad Cost Factors
- The industry you are in
- Your ad quality
- Your audience
- Your bidding amount and type
- Your ad objective
Below is a breakdown of these factors of costs for Facebook ads.
Cost Factors Affects Facebook Ad Objectives
Inside of the ads platform will be different goals that you would need to pick from. Each of these goals and each ad type will get shown to different people based on the type of outcome you are looking for and will have different KPIs.
The goal that you pick will determine who sees your ad on Facebook, affecting the cost.
For instance, if you are a business owner for home services and are starting with a Facebook campaign, you will need to set your target to include homeowners and those interested in home improvement.
Now, Facebook will need to pick between those two targets to show your ad to. Both match your specifications. The first person tends to click on a lot of ads but never completes the lead form. The other does not click on many ads but tends to fill out lead forms when they do click on one.
If your main goal is to get traffic to your site, Facebook will go with the person who clicks on many ads. If you are looking to get leads, then Facebook will pick the most likely person to convert to your site.
The chances are that there will be fewer people who are likely to convert than those who click on your websites. The smaller that your pool is, the more expensive it will be. However, the exception is for highly-relevant, highly-targeted campaigns such as showing pregnant women ads for discount baby products. Picking the right objective for your ad will be the first step to ensuring that the costs stay low.
Types of Objectives for Ads
Conversions: These ad types encourage people to do a specific action or encourage them to buy your service or product.
Consideration: These ad types encourage people to think about your services or products about your business and encourage them to lookup more information about it.
Awareness: These ad types build awareness and interest in your services or products.
Facebook Ad Auctions and How It Affects Costs
The next factor that plays into how much ads will cost will be the bid you place and the auction. The advertising spot is not going to go to the highest bidder. Instead, it will get presented based on the value of your ad.
Facebook is striving for two things when it comes to ads:
- Providing relevant, positive experiences for those using Instagram, Facebook, or an audience network.
- Creating value for advertisers by assisting in reaching and getting results for those who are in their targeted audiences.
One of the best ways to hold an auction that have both interests represented. Doing this can allow advertisers to reach people who are receptive to their ads, and those are interested in seeing something that they may get interested in. That will be different from more traditional auctions because the winner is not the person who has the highest bid, but the ad that is going to create the most value.
What goes into that value? Three things go into the value:
- Estimated action rates: That will get calculated by how likely Facebook believes a person completes the chosen objective.
- Ad Relevance and Quality: That will get feedback from Facebook users and how relevant your ad will be for those seeing the ad.
- Advertiser Bid: That is how much you are going to pay.
During the ad auction period, your ad will compete with other similar ads, and the advertiser with the highest sum of the three will get online real estate.
How your bid affects Facebook’s advertising costs
There are two ways to bid on your ads: automatic and manual.
With automatic bidding, Facebook will set bids for you to get the most actions at the best price. Using manual bidding, you can decide what results are worthwhile for you. You will get encouraged to bid on Facebook ads if the behavior is valuable to you. You should focus on the ROI, not the lowest cost. The higher the bid, the more visits you will have to the most important people.
Your Facebook audience and its impact on advertising costs
Who you show your ads to will deal with your final costs for advertising. Your cost will end up being lower if the ad is relevant to the audience.
You are a family service company. You want to advertise to replace the roof, so you can choose to target people who are interested in house decoration.
Good idea? It is not a good idea.
If you select only “interested in home improvement” as the qualifier, your ad will get shown to everyone who has indicated that they like home improvement. These include people who live in apartment buildings, not homeowners and people who watch HGTV because they are obsessed with watching programs about flipping houses.
The bad news now is: You can choose and combine more than 350 audience attributes, and it will take years to refine your technology to manipulate it into a killer audience.
Advertising Quality and Facebook
If what I’m talking about is that you have to choose two methods that you want to optimize to reduce your Facebook ads’ cost, then “Ad Quality” will be the first on my list, followed by “Audience.”
That is about Facebook:
Facebook is similar to someone’s online diary. In their private space, they can keep up with the essential things, discover new things that may be important to them, and avoid boredom at the root.
This is a “seeing” platform. People do not go there for “doing” things.
In terms of creative advertising, this way of thinking may be beneficial or detrimental to you. Since this is a “viewing” platform, the regular ad copy you may see in search results will not take effect and will increase your costs.
Your ad must be engaging, visually appealing, and absolutely must meet one of the following conditions:
- Encourage action
- Encourage emotions
- Encourage interest
Just a single image with a headline and logo will not cut it.
Facebook’s ad relevance score
Facebook values the relevance of users. According to the platform, to calculate the relevance score will get based on the negative and positive feedback that the ad may receive from the audience that is targeted. We expect that the more positive the ads’ interactions, the higher the relevance score of the ads. (Positive metrics depend on the goal of the ad but may include video views, conversions, etc.) We expect that the more people hide or report an ad, the lower its score
The relevance score of an advertisement is between 1 and 10, with ten being the highest. As people interact and provide feedback about the ad, the score will update.
If you want to reduce Facebook advertising costs, increase the relevance score.
How your industry affects Facebook advertising costs
Let us consider it logically. If you sell Rolex watches, the cost per result may be higher than the cost of selling a 30-day fitness test. The industry you are in, and the products you sell have a lot to do with your advertising costs.
The best way to reduce the cost of Facebook advertising? Hire people who know how to do it
Remember when we told you that there are more than 350 attributes in your audience targeting options? That is a science that combines these. If you are new to Facebook advertising and not the most tech-savvy person, you will need a marketing partner. You will end up wasting time trying to figure out advertising on Facebook, along with the costs that come with it.