How much do companies spend on facebook advertising
How Much Does Facebook Advertising Cost?
Advertising on Facebook has become a trusted strategy for businesses worldwide with around 7 million advertisers active on the platform. If you’re thinking about promoting your company on Facebook, however, you probably have one question: How much does Facebook advertising cost?
Watch the video below to learn the basics of Facebook advertising, and keep reading for more information about the price of Facebook ads, including how much Facebook ads cost for other bidding models, like cost-per-like (CPL) and cost-per-download (CPA).
If you want to lower your ad costs and improve your social media advertising strategy now, talk with our award-winning strategists. With a client retention rate of 91%, we are the trusted choice for businesses worldwide.
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Table of Contents
How much does Facebook advertising cost?
Facebook advertising costs, on average, $0.94 per click and $12.07 per 1000 impressions. Ad campaigns focused on earning likes or app downloads can expect to pay $1.07 per like and $5.47 per download, on average.
[Summary] Facebook ad costs
For a handy breakdown of Facebook advertising costs, check out this table:
$0. 97 | Cost-per-click (CPC) |
| $7.19 | Cost-per-thousand-impressions (CPM) |
| $1.07 | Cost-per-like (CPL) |
| $5.47 | Cost-per-download (CPA) |
While compiled from an in-depth AdEspresso study that assessed almost $300 million of Facebook ad spend, these numbers are only averages. Your business may see higher or lower Facebook ad costs due to several factors, like ad placement, target market, industry, and more.
That’s why you want to use these amounts as a point of reference, rather than as a standard, for your company’s ad campaigns on Facebook. If not, you risk setting unrealistic expectations for your campaign, which can result in poor performance and unhappy company decision makers.
Before exploring the different factors that influence how much your Facebook ads costs, it’s helpful to review how the Facebook ad auction works.
Once you know how Facebook operates its ad auction, you can start optimizing your Facebook ad costs.
Here is an overview of the steps leading up to the Facebook ad auction:
- Advertiser logs into Ad Manager to create a campaign and ad
- Advertiser chooses their daily budget (or the maximum they’ll spend each day)
- Advertiser selects what action they’ll pay for, like views, clicks, or downloads
- Advertiser builds its audience using demographic, interest, and device targeting
- Advertiser adds their creatives, like their ad copy, images, and video
- Advertiser approves and launches their ad
Once there’s a chance to show an ad, the Facebook ad auction happens:
- Facebook grades every potential ad’s bid, estimated action rates, and ad quality
- Facebook uses estimated action rates and ad quality to determine ad relevance
- Facebook generates an ad’s total value, based on bid, estimated action rate, and ad quality
- Facebook delivers the winning ad — or the ad with the highest total value
Based on the ad auction, you can tell which metrics matter most to your ads and their costs:
- Ad bid
- Estimated action rate
- Ad quality
- Ad relevance
If you can optimize these metrics, like by improving your ad’s quality and relevance to users, you can lower how much your Facebook ads costs.
Facebook even says that ads with the most relevance cost less and get more facetime with users.
Keep reading to learn more about these metrics and how to optimize them, below.
Learn How to Create Facebook Ads
What determines Facebook advertising costs?
Like pay-per-click (PPC) advertising costs on Google Ads, a variety of factors impact your Facebook advertising costs. If you want to build a realistic budget for your business, then you need to understand how these factors influence the cost of Facebook ads.
The eight factors that determine how much Facebook ads cost include:
- Audience
- Ad Budget
- Ad Bid
- Ad Objective
- Ad Placement
- Ad Quality
- Season
- Industry
Learn more about each of these factors now:
1. Audience
An in-depth study by AdEspresso on Facebook advertising costs revealed that your target audience has a significant impact on the prices of your Facebook ads.
Whether you’re focusing on a specific age, gender, or interest, you can expect a shift in your ad expenses.
For example, if your ad campaign targets women, your CPC may increase by $0.55. That’s $0.15 more than if your ad campaign targeted men. When you look at age, ads that target individuals 55-65 years or older tend to have substantially higher costs than campaigns focusing on users 25-34 years old.
That’s because Facebook only has 26 million users between the ages of 55 and 64. While that may seem like a high number, it doesn’t come close to the more than 58 million people (between the ages of 25 and 34) that use Facebook.
When you advertise on Facebook, you can also target specific interests or audience attributes, including:
- Outdoor recreation
- Meditation
- Philanthropy
- College football
- Commuters
- And more
This useful feature can impact how much it costs your business to advertise on Facebook, as you may target high-value attributes or broad interests.
For example, if you target frequent travelers, versus frequent international travelers, you have a broad audience that may incur additional expenses.
While high-value attributes can help you reach your specific market, broad interests can inflate your target audience with low-value users. Since these users often click on your ads, but don’t act on your calls-to-action (CTAs), targeting them can result in a low-performing campaign.
Focus your campaign on the people that matter and offer the most value to your business. You don’t want to pay for clicks or views that offer zero value when it comes to your long-term goals, like driving a sale or generating a lead.
2. Ad budget
When you launch an ad campaign on Facebook, you set an advertising budget.
No matter your budget, whether it’s $200 or $800 per month, it will impact how much Facebook advertising costs your business. If you set a budget of $200, that affects your ad bids, ad performance, and the overall results of your social media advertising campaign.
As an example, if your company launches an ad campaign with a $100 monthly budget, you may set a maximum bid of $1 per click. As the average CPC for Facebook ads is $0.94, it’s easy to see that your bid isn’t competitive and will probably result in a low number of impressions and clicks.
Not to mention, social media strategists recommend a daily budget of at least $5 for businesses. If you’re spending $5 a day on your campaign, however, you’ll use up your $100 budget by day 20. With this amount of funding, you don’t have the money to even run your ad campaign for the month.
While a large ad spend provides your business with additional flexibility, you can still make a small budget work for your company. Your company decision-makers need to realize, however, that a low ad budget provides fewer conversions because of its performance limitations.
3. Ad bid
Your ad bid also impacts the cost of Facebook ads. Facebook offers a few bidding strategies, including:
- Lowest cost bid strategy: This option, also known as automatic bidding, helps your business achieve the lowest possible cost per click or action.
It also aims to make efficient use of your budget, which is why companies tend to start with this strategy.
- Target cost bid strategy: This option, also known as manual bidding, works to reach your desired cost per click or action. You can only use this strategy for app install, conversion, lead generation, or product catalog sale campaigns.
Depending on your bid strategy, as well as bid amount, you may have higher or lower Facebook advertising costs. In most cases, manual bidding comes with higher advertising costs, while automatic bidding tends to make the most of your budget.
Before you decide on a bidding strategy, it’s vital that you understand how the ad auction works on Facebook. When you understand the algorithm behind the company’s advertising services, you can build a better ad strategy and advertising budget.
In an ad auction, Facebook rates each bidder (and their ad) with these three factors:
- Bid: A bid is how much you’re willing to pay for a user to interact with your ad.
For example, you may bid $1.50 for every click. According to Facebook, your bid is one of the most powerful tools for improving your ad’s performance.
- Estimated action rates: Your estimated action rates demonstrates the likelihood of users to interact with your ads, like by clicking on your ad or downloading your app. For a competitive ad, you need a high estimated action rate, which means creating a relevant ad for your audience.
- Ad quality and relevance: The positive and negative interactions of users with your ad determine its quality and relevance. A high ad quality and relevance score can improve the success of your ad in auctions.
If your ad comes away with the highest total value (based on the above three factors), you win the auction. In response, Facebook shows your ad, rather than a competitor’s, to the person in your target audience.
While an aggressive bid can increase your total value, it also raises your Facebook advertising costs.
That’s why your business wants to focus on creating a relevant, high-quality ad first. Then, you can assess your bidding strategy and bid investment.
4. Ad objective
When you create an ad on Facebook, you need to choose one of the following main ad objectives:
- Awareness
- Consideration
- Conversions
Once you pick your main objective, you need to select a specific goal:
- Awareness
- Brand awareness
- Reach
- Consideration
- Traffic
- App installs
- Engagement
- Video views
- Lead generation
- Messages
- Product catalog sales
- Conversions
- Store visits
- Conversions
In most cases, more valuable ad goals, like a store visit or product purchase, lead to higher ad costs. That’s because these actions, like a product purchase, have immediate value for businesses. A product catalog sale, for example, generates immediate revenue for your company.
As you build your ad campaign, however, it’s important to remember the value of brand awareness and consideration. When you reach and connect with users in the early stages of the buying funnel, you can grow their interest in your brand and move them further down the sales funnel, resulting in a purchase.
Even though this action occurs later, it offers your business real and tangible value. It can also decrease your Facebook advertising costs, as most companies pay less for awareness- and consideration-related goals than for conversion-related goals.
The only difference is the turnaround time for a conversion. With a conversation-related goal, you connect immediately with a user looking to buy. In comparison, users in the awareness and consideration stage need a little more time before converting.
5. Ad placement
Ad placement also shapes the cost of Facebook ads. With Facebook, your ads can appear in six spots:
- Instagram Stories
- Facebook desktop newsfeed
- Facebook right column
- Facebook Messenger
- Audience Network
When it comes to social media advertising, Facebook offers a competitive advantage with its ownership of Instagram.
Via Facebook, you can create Facebook and Instagram ads with ease, which saves your team time.
Instagram maintains the highest CPC when it comes to Facebook advertising costs. On average, companies spend an additional $0.80 per click to appear on Instagram. For Instagram Stories, the CPC increase is around $0.78.
The average CPC for ads on Facebook is around $0.30 less than Instagram. It offers a versatile platform for advertising your business. Your ads can appear not only on Facebook, but also Facebook Messenger, a popular messaging app for the social media network.
Audience Network
The Audience Network, which allows your ads to appear on websites and mobile apps, maintains an even lower CPC than Facebook and Instagram. In most cases, companies spend an additional $0.
20 (based on the average advertising cost for Facebook) per click.
While you can modify where your Facebook ad appears, Facebook recommends Automatic Placements. This tool allows the social media platform’s delivery system to make the most of your ad spend by placing your advertisements on platforms that offer the most potential for results.
If you want to reduce your Facebook advertising costs, however, you can turn off this feature. When you turn Automatic Placements off, you enable your team to select where you want your ad to appear, whether on Facebook, Instagram, or the Audience Network.
6. Ad quality
The quality and relevance of your ads (as rated by Facebook) also affects how much Facebook advertising costs your business. If you create ads with a high relevance and engagement score, you will see lower ad costs.
Hootsuite demonstrated the power of an ad’s quality or relevance score in a recent study. The company created two versions of the same ad: one with a relevance and engagement score of 2.
9 and another with a relevance and engagement score of 8.
The low-scoring ad had an average CPC of $0.14, while the high-scoring ad’s CPC was $0.03.
When it comes to your relevance and engagement score, your ads can receive a rating between 1 and 10. Ten is the best possible score, while one is the worst possible score. Facebook assigns a relevance and engagement score based on positive and negative ad feedback.
If you want to make the most of your ad spend on Facebook, it’s critical for your team to create ads with high relevance and engagement scores. For the best results, monitor your relevance and engagement score on a routine basis.
Access your relevance and engagement scores with the following steps:
- Go to Ads Manager
- Select the ad you want to view
- Choose the Columns dropdown menu
- Click Customize Columns
- Select Relevance Score
- Hit Apply
- View your Relevance and Engagement Score
Keep in mind that Facebook requires around 500 ad impressions or views before assigning a score.
As long as your ad is live, Facebook will continue to monitor user interactions, determining if it’s relevant. That’s why you need to check-in and adjust your ad to feedback regularly. With this proactive approach, you can improve the performance, results, and costs of your Facebook advertising campaign.
7. Season
The time of year can also impact how much Facebook ads are.
In peak shopping seasons, businesses tend to spend more on advertising. The increased demand for ad space results in a competitive marketplace, which can lead to aggressive bids and bigger campaign budgets that inflate the cost of advertising on Facebook.
A few of the most expensive days to advertise on Facebook include:
- Thanksgiving
- Black Friday
- Cyber Monday
- Christmas
- Boxing Day
- New Year’s Eve
- New Year’s Day
While seasonal factors can increase your Facebook ad costs, your business probably wants to take advantage of increased demand from consumers.
In response, you may increase your budget for those high-demand months or audit your ad strategy to improve the quality of your ads.
8. Industry
While the average cost of Facebook ads is $0.94, you can gain more insight into your expected Facebook advertising costs by looking at the average price of Facebook ads for your industry. This data offers a more accurate estimate, which can help your team build your social media marketing budget.
Find out how much Facebook ads cost in your industry below:
Depending on your industry, Facebook advertising can offer a cost-effective option for building brand awareness, generating leads, driving conversions, and more. Even if you’re in a competitive market, like consumer services, you can benefit from a social media strategy.
Competitors in your industry advertise on the social media platform because they get results from it, whether it’s more followers on their social media page, purchases from their online store, or calls to their physical location.
It’s also helpful to mention that these prices for Facebook advertising are averages.
| Apparel | $0.45 |
| Auto | $2.24 |
| B2B | $2.52 |
| Beauty | $1.81 |
| Consumer Services | $3.08 |
| Education | $1.06 |
| Employment and Job Training | $2.72 |
| Finance and Insurance | $3.77 |
| Fitness | $1.90 |
| Home Improvement | $2. 93 |
| Healthcare | $1.32 |
| Industrial services | $2.14 |
| Legal | $1.32 |
| Real Estate | $1.81 |
| Retail | $0.70 |
| Technology | $1.27 |
| Travel and Hospitality | $0.63 |
That’s why you should only use these numbers as benchmarks for your business. When you adopt this perspective, your team and company’s decision makers can approach your campaign with realistic expectations.
Are Facebook advertising costs worth the price?
That answer depends on your business, goals, and ad campaign optimization. For companies that can generate a return on investment from Facebook ads (which can take trial and error), Facebook advertising is worth the price.
Tools that can improve your ad campaign targeting, like AdTechFX via MarketingCloudFX, can help your business improve its paid advertising performance by reaching the audience members closest to your ideal client.
FAQs for Facebook advertising costs
Do you still have questions about how much Facebook advertising costs? Check out this FAQ:
How much does Facebook advertising cost for impressions?
If your ad campaign focuses on impressions, the average cost of Facebook advertising is $12.07. This amount refers to the cost per thousand impressions (CPM), which is what your company pays when 1000 users see your ad on Facebook.
How much does Facebook advertising cost for likes?
If your company’s ad campaign focuses on earning likes for your page, the average cost of Facebook advertising is $1.07 per like. This amount is what your company pays, on average, for a single like on your Facebook page.
How much does Facebook advertising cost for app installs?
If your ad campaign focuses on downloads or app installs, the average cost of Facebook advertising is $5.
47 per download. That means your company pays, on average, $5.47 when a user installs your app.
What factors influence Facebook advertising costs?
Several different factors determine how much your business pays to advertise on Facebook, including:
- Audience: Audiences shape your Facebook advertising costs in a few ways. They can increase or decrease your costs, depending on their features. For the best results from your ad budget, you should create a specific audience, rather than a broad one.
- Ad budget: Your monthly advertising budget also impacts your Facebook advertising costs. While a big ad budget offers flexibility in your ad strategy, your business can also accomplish its advertising goals with a smaller monthly ad spend.
- Ad bid: An ad bid can directly increase your advertising costs on Facebook. You can lower your ad bid costs, however, by choosing an automatic bidding strategy and maintaining a high ad quality score.
- Ad objective: The goals of your ad campaign, which range from Awareness to Consideration to Conversion, also impact your Facebook advertising costs. A conversion-related goal tends to have higher prices than an awareness-related goal.
- Ad placement: The placement of your ads across Facebook properties, which include Instagram, Facebook, and the Audience Network, can also influence your advertising costs. Your business can automate the placement of your ads or select where you want your ads to appear.
- Ad quality: The relevance score of your ads plays a massive role in your Facebook advertising costs. You need to design ads that engage and deliver on user expectations. When you do, you can lower your ad costs substantially.
- Season: During popular shopping seasons, like Christmas, your business can expect higher Facebook advertising costs due to increased competition in the ad auction.
While unavoidable, your team can combat this feature by modifying your ad budget and bid.
- Industry: Your industry can also shape your Facebook advertising costs. Markets with the highest advertising costs include finance, insurance, and consumer services. If you’re in a competitive sector, focus on creating top-notch ads and setting competitive bids.
For an in-depth analysis of Facebook advertising costs, check out our earlier breakdown.
How much does it cost to advertise on Facebook per month?
Companies spend an average of $300 to $1000 on Facebook ads per month. Depending on the size of your business, as well as investment in social media advertising, you may spend more than $1000 or less than $300. For example, an enterprise may invest $5000 per month on Facebook ads.
How much you spend on Facebook ads depends on your business and decision makers. While you don’t have to spend the average amount that other companies do, this range offers a competitive advantage that can help your organization earn more from social media.
That doesn’t mean price determines the success of your campaign. It does provide a benefit, however. With a larger budget, your company can pay for more ad clicks, which can result in more conversions and revenue.
To put this concept in perspective, imagine the following scenario.
Business A creates a $100 monthly budget for Facebook, while Company A invests $200. They both pay the average CPC, $0.94, which means Business A can afford 103 clicks. In comparison, Company A can pay for twice as many.
A bigger ad budget doesn’t equal a successful ad campaign, though. That’s why many businesses partner with a professional social media advertising agency, like WebFX. With our team’s expertise, you don’t have to second-guess your bid, ad copy, or audience targeting.
Instead, you can focus on the impressive results we’re creating for your business.
How much does it cost to advertise on Facebook per year?
Businesses spend $2400 to $9600 on Facebook ads each year.
The size of your company, plus social media marketing strategy, can influence how much you invest in Facebook advertising annually. Even if you’re a small-to-midsized business (SMB), you may spend more than $9600 on Facebook ads.
For example, an ecommerce store with an active following on Facebook may invest more in Facebook advertising because their campaigns drive product orders. In comparison, a well-known business may spend less due to their already remarkable brand awareness.
When it comes to your company’s annual advertising costs, it’s essential to consider which channels offer the most value. If social media, specifically Facebook, provides a tremendous return on investment (ROI), then it makes sense to direct more of your advertising budget to Facebook.
If you’ve never advertised on social media before, you want to think about your audience and your goals. For companies that have an active audience on Facebook and objectives that align with the platform’s strengths, like building brand awareness, it makes sense to invest in Facebook advertising.
Get better results from your Facebook ads
Looking to improve your ad campaign performance, as well as decrease your Facebook advertising costs?
Partner with WebFX, an award-winning digital marketing agency that offers social media management and social media advertising services. Whether you’re looking to build brand awareness, discover qualified leads, or generate sales, our decades of experience and AI-powered software can help.
Learn more by contacting us online today or call us at 888-601-5359!
How Much Do Facebook Ads Cost in 2022? (New Data!)
Home — Blog — How Much Do Facebook Ads Cost in 2022? (+9 Ways to Stretch Your Budget)
Despite challenges from Apple iOS updates over the past year, Facebook continues to be a lucrative platform for brands to reach, engage, and convert customers. Just how lucrative? Well, for starters, it’s the cheapest social media advertising channel (apart from Twitter, whose popularity pales in comparison).
But to officially answer that question, we’re going to dive into how much Facebook ads cost in 2022 based on the latest data available, as well as how to keep your costs as low as possible.
Table of contents
- How much Facebook ads cost in 2022
- Cost per click by month
- Cost per click by region
- Cost per click by industry
- Factors that influence Facebook advertising costs
- How to lower Facebook ad costs
- What makes Facebook ads worth the price?
How much do Facebook Ads cost in 2022?
We’ll be diving into different reports to get specific answers, but here’s the overview.
Facebook ads average cost per click in 2022 is:
- Ad Espresso: $0.30 – $0.50
- Emplifi: $0.40 to $0.65
- Revealbot: $0.43 – $2.32
- WordStream: $0.42 – $3.89 (Conversions objective campaigns)
Keep in mind that each of the studies above used different data sets.
Costs vary by industry and campaign objective, which we’ll get to later.
Facebook ads cost per click by month, 2022
Ad Espresso’s Facebook benchmarks report provides average cost per click and cost per like, broken down by month, day, and hour. According to this report, the average cost per click for Facebook ads across all industries is $0.44, slightly more expensive than last year which was $0.38.
AdEspresso’s month-by-month breakdown for Facebook ads cost per click from Q1 to Q3 of 2021 is as follows:
Facebook ads cost per click by month:
- January – $0.30
- February – $0.33
- March – $0.42
- April – $0.46
- May – $0.44
- June – $0.47
- July – $0.46
- August – $0.
47 - September – $0.5
Facebook ads cost per click by region, 2022
Emplifi’s State of Social Media and CX provides global Facebook ad benchmark data from Q2 2020 to Q2 2021. According to its data, the cost per click in Facebook ads for North America ranged from $0.40 to $0.65 last year. Here are the averages compared to other regions of the world, in order from highest to lowest:
Facebook ads cost per click by region
- North America: $0.40 – $0.65
- Western Europe: $0.30 – $0.50
- East Asia: $0.18 – $0.20
- Southern Europe: $0.11 – $0.21
- Worldwide: $0.12 – $0.19
- South America: $0.05 – $.10
- Central America: $0.05 – $.10
- Southeast Asia: $0.05 – $.10
Clearly, competition is strongest in North America and Western Europe as Facebook ad costs are highest in these regions.
But we can also see an overall trend here from January 2021.
Facebook ads cost per click by campaign type, 2022
Revealbot provides real-time benchmark costs. According to its data, the average cost per click across all campaigns over the past year is $1.01, a slight increase from last year at $0.97.
We can also see average cost per click in Facebook by campaign objective:
- Brand awareness: $2.32
- Lead gen: $1.74
- Traffic: $0.43
- Conversions: $1.33
Facebook ads cost per click by industry
The latest industry benchmarks we could find on Facebook ad costs were our own, collected in 2019.
Our data showed an average cost per click (CPC) on Facebook Ads of $1.68 across all industries, with food and drink the cheapest at $0.42 and finance the most expensive at $3.89.
| Industry | Average CPC |
| Beauty & Fitness | $1. 85 |
| Business & Industrial | $2.48 |
| Finance | $3.89 |
| Food & Drink | $0.42 |
| Hobbies & Leisure | $0.68 |
| Home & Garden | $2.78 |
| Internet & Telecom | $3.07 |
| Jobs & Education | $2.11 |
| News | $1.11 |
| People & Society | $2.01 |
| Pets & Animals | $0.61 |
| Real Estate | $1.81 |
| Science | $1.33 |
Facebook ads cost per lead by industry
According to our benchmark data, the average cost per lead in Facebook ads across all industries is $19.68, ranging from $12.91 for food and drink to $56.89 for news.
| Industry | Average CPA |
| Beauty & Fitness | $38.33 |
| Business & Industrial | $23. 80 |
| Finance | $41.28 |
| Food & Drink | $12.91 |
| Hobbies & Leisure | $21.99 |
| Home & Garden | $44.23 |
| Internet & Telecom | $29.95 |
| Jobs & Education | $18.36 |
| News | $56.89 |
| People & Society | $33.21 |
| Pets & Animals | $15.29 |
| Real Estate | $16.52 |
| Science | $12.67 |
Facebook ads CPM 2022
According to Revealbot, the average CPM on Facebook across all industries is $14.40, higher than last year which was $11.54.When you break the averages out by campaign, you see CPMs ranging from $2.28 (brand awareness campaigns in February) all the way up to $30.97 (lead generation campaigns in June).
If your CPMs are high, check out our post on how to lower your Facebook ads CPM.
Facebook ads cost per engagement, 2022
Also according to Revealbot, the average Facebook cost per engagement in 2022 is $0.12, one cent higher than last year.
When average cost per engagement is broken out by campaign objective, we see CPEs ranging from practically a penny to $0.58.
Factors that influence the cost of Facebook ads
Just like Instagram ads costs, Facebook ad costs are influenced by a number of variables.
1. Campaign objectives
Facebook campaign objectives are a prominent factor in pricing since they relate to the value of the desired goal and where in the funnel your users are.
For example, Brand awareness or Engagement campaigns will cost less than lower-funnel campaigns like Conversions that drive purchases. It’s easier to get someone to engage with an ad than it is to entice them to click through, open up their wallet, and complete a purchase.
2. Audience size
Facebook ads targeting larger and broader audiences will generally cost less than for smaller audiences.
You will typically see lower costs in prospecting, upper-funnel, cold-audience campaigns compared to retargeting, lower-funnel, warmer-audience campaigns, because the audiences of the latter tend to be more specific, smaller in size, therefore more competitive.
3. Daily budget
If your daily budget is on the lower end, it may take longer for Facebook’s algorithm to exit the Learning Phase. For this reason, costs for new ad sets are often higher upfront while the system understands how your audience behaves with your ads and how to optimize them for the highest engagement. If your ads are well engaged with, Facebook and Instagram will reward you with lower costs over time.
4. Bidding strategy
Similarly, the way you instruct Facebook to spend your ad budget affects how much your ads cost. Facebook bidding strategies include:
- Lowest cost
- Highest value
- Cost cap
- Minimum ROAS
- Manual
5. Click-through rate
Click-thru rate (CTR) can also play a role in you Facebook ad costs.
If CTR is low, especially in a website traffic campaign, you may then see higher costs as Facebook understands that there may be some disconnect between your target audience and the messaging in your ads.
A healthy Facebook CTR is about 2%. More often than not, the higher your CTR climbs, the lower your CPCs will be.
6. Industry
As you saw in our benchmarks above, Facebook costs vary by industry, which also includes varying click-through rates.
It’s also important to look at the ROI by industry. For example, the average CPA for restaurants is $12.91. But if your customer spends $50 and keeps coming back for years to come, you’re essentially making money off of that ad.
7. Seasonality
Historically speaking, in the latter part of Q3 and Q4, costs tend to temporarily increase as the advertising landscape changes for the holiday ecommerce season. Competition ramps up as brands increase their budgets and gain more impression share, thus, increasing costs for all advertising brands.
In AdEspresso’s chart (also shown above), we can see the increase in costs from Q1 to Q4.
Keep that in mind as you budget for the year and if you aren’t in ecommerce or running promotions during the end of the year, you may want to strategize on whether to keep a presence or to scale back.
How to lower Facebook ad costs
There are a number of ways to lower your Facebook ad costs, but here are some of our favorite strategies.
1. Create a full-funnel strategy
To use your budget wisely and set yourself up to scale your Facebook ads, choose funnel-appropriate campaign objectives. In general, Awareness and Consideration campaigns are suited for the top of the funnel; Consideration and Conversion campaigns align with the middle of the funnel, and Conversion campaigns are best for bottom-funnel conversions.
In short, begin with upper-funnel campaigns to reach more people in your target audience at a lower cost, and then move your way toward conversion campaigns that optimize for your purchase-driving conversion events.
Learn how to create a full-funnel Facebook advertising strategy here.
Note that some brands can certainly run a Conversion campaign targeting upper-funnel audiences with lower priced products or something that may make for a good impulse buy.
People can and do make purchases upon first interaction with a brand on Facebook, however, most will need more touch points from a brand so you can gain their trust, showcase your benefits, and entice them to convert.
2. Use the Automatic Placements setting
While it can be tempting to pick and choose where you want your ads to appear within the Facebook network, the best way to save money is to start with the default Automatic Placements setting. In fact, not doing so is on our list of 7 Budget-Wasting Facebook Ads Mistakes.
By appearing on all placements, Facebook can get a better idea on where to best serve your ads, thus lowering your costs. You’ll also get out of the learning period faster so that you can apply data-informed money-saving optimizations as soon as possible.
Your targeting conditions will remain the same regardless of placement, which means Facebook can then serve ads to user in a lower volume, but lower cost placement that can help drive incremental revenue for you.
3. Broaden your audience
Ad mentioned above, audience size impacts how much Facebook ads cost. So while you want to keep your targeting narrow, you should strive to make those targeted audiences as large as possible. This has become trickier as a result of privacy measures, but we’ve got some recommended Facebook ad strategies to help you out with that.
4. Check audience overlap
Facebook’s audience overlap tool can be instrumental in saving money. Let’s say you have one ad targeting an audience of people interested in startups and another ad for people interested in entrepreneurship. You have different Facebook ad copy and creative to appeal to these different audiences. However, the overlap tool shows you that half of the startup audience overlaps with the entrepreneurship audience.
Knowing this, you can use exclusions so those ads don’t overlap. Otherwise, you’d lose money bidding against yourself.
5. Use bid caps
This is the manual bidding strategy in Facebook ads, where you can set a maximum bid instead of allowing Facebook to dynamically bid based on your goals. But this should be used with caution. It’s for advertisers who have a solid understanding of the conversion rate and profit margin, and requires regular maintenance. If you set your bid cap too low, Facebook might have a hard time spending all of your budget.
6. Use the Pixel AND the Facebook Conversions API
The goal of both of these pieces of technology is for you to track your ad performance. With visibility into what’s working and what’s not, you can allocate budget accordingly. You can also gain insights about the people viewing your ads, which you can use to further optimize your campaigns and maximize your budget.
The Facebook Pixel is still a thing, but it is losing its power since it’s cookie-based and cookies are crumbling.
The Facebook Conversions API does not rely on cookies, but it doesn’t pick up the same exact information as the pixel. So, using the two together will ensure you capture the most accurate data. You can learn how to use the Facebook Conversions API here.
7. Run Facebook A/B testing
You can also help lower your costs at the ad level by A/B testing variables in your ads—one at a time—to better understand what is and is not working well. Test out the text, headline, images and/or videos, landing pages, and more.
Facebook is not the set-it-and-forget type of platform, so it is best to continuously test and aim for better results. Running tests at the ad level can help improve your engagement rates and CTR and stretch your budget further. Check out our Facebook ad examples to get ideas and inspiration.
8. Target your page fans separately
These are going to be your highest converting audiences, so by separating them out, you can allocate more budget to the campaigns that will yield the highest ROI.
Plus, retargeting page visitors is one of the lesser-used Facebook ad strategies becoming more popular as a result of privacy changes.
What makes Facebook Ads worth the price?
Advertising on social media in general has its benefits, but let’s finish off with some of the money-saving advantages Facebook has over other platforms like Pinterest, LinkedIn, and Instagram.
Facebook is still the most popular
With 2.8 billion users worldwide, Facebook currently ranks as the largest and most popular social media platform in the world. This is compared to YouTube (2.3 billion), Instagram (1.3 billion), and TikTok (7.3 million).
…and the most widely used
Facebook has the most even distribution of users compared to other popular social media platforms like Instagram and Linkedin—which means you can target a larger range of age groups with your ads.
Precise targeting means higher ROI
Precise targeting means reduced Facebook ad costs. If you want to target someone in a 15-mile radius of a particular address or zip code, you can do that.
If you want to reach parents with children 3-5 years old who love ice cream, you can do that too. And we haven’t even touched lookalike and custom audiences.
Image source
Though we have faced some targeting limitations as a result of Apple iOS updates, Facebook still remains one of the best PPC channels for targeted advertising. This does require changes, however, so be sure to visit our guide >> Facebook Ad Targeting in 2022.
You have flexibility with budgeting
Facebook offers two types of budgeting to accommodate different advertising strategies. Lifetime budgets, which are good if you run ads on a schedule and/or a fixed budget and end date; and daily budgets, which are good for maximizing ongoing campaigns and pacing and planning around a fluctuating budget.
It’s affordable
Facebook ads are among the most cost-effective ad types for any business, whether it spends $10 a day or thousands. With testing, remarketing, and reporting capabilities, you have the tools to make the most of every dollar you spend.
For context, here are is average cost per click for each of the four major social media advertising platforms:
- Twitter: $0.38
- Facebook: $0.97
- Instagram: $3.56
- LinkedIn: $5.26
Data source
Stay on top of your Facebook ad costs in 2022
Ready to start or improve your Facebook advertising? We’ve got some resources for you!
- Use our full tutorial to learn how to Advertise on Facebook.
- Use our Free Facebook Ads Performance Grader to instantly find areas where you’re wasting spend.
- Lean on these free Facebook ads courses to help you optimize your campaigns.
- Get more cost information in our posts >> How Much Do Instagram Ads Cost? and How Much Does Google Ads Cost?
- Download our guide 7 Fundamental Facebook Advertising Tips every advertiser should know.
How much do brands and politicians spend on Facebook ads and how are they targeted?
TECHNOLOGY
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Here you can turn it off at any time. nine0003
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Facebook has launched a new tool called the Ad Library. It can help you find out how much advertisers are spending on Facebook ads, which audience they are targeting, and how ads differ based on user demographics. Also, this tool can be used to check the advertisements of politicians, writes TechCrunch.
What happened
Facebook is fulfilling its promise to make social media advertising more transparent. The company launched the "Advertising Library". It allows you to find advertising campaigns, find out their budget, audience and get other information. nine0011 You can also use this tool to search for political ad campaigns on Facebook. The Library database includes all political advertisements that have been launched since March 15, 2019.
How it works
You need to go to the "Advertising Library" and then enter the name of the brand or policy into the search engine.
The service provides not only information about the ad itself, but also about the history of advertisers' pages. For example, when they were created, how they changed their name, from which country they are controlled. nine0011
The company does not disclose the exact cost of advertising. But you can find out the price range, coverage of the ad, the age and gender of the audience, as well as the regions in which it is shown. You can complain about a page or an advertisement directly in the Library.
What's next
This is an important step for the company towards transparency. The tool helps ensure that politicians do not use Facebook ads for misinformation, voting rights violations, or other prohibited purposes. nine0011
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#ad #Facebook #IT #Libra #tech #TechCrunch #telegram #Audit #Budget #Dependencies #Stories #Companies #Fashion #Name #Violations #Search #Search engine #Politics #Help #Advertising #Advertising campaigns #Networks #Styles #Price #Target nine0003
How to correctly calculate your Facebook ad budget: steps and tips
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Trying to budget your Facebook ads? Lacking a clear strategy?
In this article, you'll learn how to budget your Facebook ad spend based on your business goal.
We will also analyze how to distribute the budget between campaigns to achieve the goal. Here are four mistakes you should avoid if you want to maximize your Facebook ad results. nine0003
Learn how to set up Facebook and Instagram ads in a free marathon.
1. Determine your advertising budget
The first step in determining your advertising budget is to analyze your marketing and sales figures . Most often, the goal of business owners is to make money. Therefore, you need to get as many leads and sales as possible.
Typically, the marketing budget for any business is 5%-12% of revenue. New companies may set a goal of spending around 12% because they are extremely interested in rapid and even aggressive growth. nine0003
Let's say your company has been around for a while and you're making a lot of money. To maintain the current level of business or incremental growth, the advertising budget should be closer to 5%.
Another scenario. For example, your business is just getting started, and you have never spent money on marketing, using only recommendations, the so-called "word of mouth".
In this case, you need to research and find more information. nine0003
The first place to learn something is through industry research. There is a lot of data online where you can get information about your industry. You can also contact other companies or people working in a similar niche.
So let's see what information you need to know.
Important metrics to know
- Cost per lead
What is the cost per lead in your field of activity? A lead is not a sale, but it is what you need to get before you make that sale. nine0003
- Main event price
The most important metric to focus on is the price per main event. For example, if your business requires a consultation before making a sale, set a price for that event.
When you start running Facebook ads, you will notice that while cost per lead is low, cost per main event will not always be as low. If you are selling a product or service cheaply, you must determine the maximum amount you need to spend to remain profitable. If the price for the product you are selling is high, then you have more wiggle room to splurge on costs. nine0003
- Customer acquisition costs
You also need to determine what the costs of customer acquisition are for your business. How much money did you have to spend to get a new client? This number differs from business to business. If you offer different products and services, the cost of customer acquisition may also differ depending on the type of product.
- Conversion rate
Look at your conversion rate. Whether you have a sales team or sell something online, determine how many potential calls or leads you get from customers before a purchase is made.
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Many people ask what should be the cost of advertising, but there is no single answer to this question. It all very much depends on your goals and the characteristics of the business. If your business is new and you want to grow dramatically in the next few months, this is your goal. Use industry data to determine how many leads you need to make a purchase, how much the main event and lead cost, and how much it will cost per customer.
2. Distribute advertising costs on Facebook
Once you've decided on your monthly ad spend, the next step is to allocate the costs correctly for different types of Facebook ads. You will then run these different types of ad campaigns to see which works best for your business.
Let's take a look at three types of advertising and determine the share of spending on them.
Approximately 20% of your advertising spend on Facebook should go towards building, engaging and educating your audience.
Very often, business owners limit themselves to advertising focused on lead generation or content promotion. However, for maximum success, you need both. nine0003
This 20% cost will create an audience that you can use in the long run. This way, your advertising success won't dry up too quickly, but it won't incur too many costs either.
About 60% of your budget should go directly to promoting your offer and generating conversions.
Send the remaining 20% to retargeting. Retargeting is an effective way to get more profit. At the same time, if this is all you do, your audience will be so small that you will not see profit. nine0003
All three pieces of this puzzle must work together. This will maximize the impact of your advertising budget on advertising results.
Bonus: 4 Facebook Ads Mistakes to Avoid
Now let's look at some of the biggest Facebook ads mistakes business owners make.
By avoiding these mistakes, you will be able to profitably spend your advertising budget on Facebook and Instagram, getting maximum results. nine0003
Too little time
It is important to spend enough time on advertising. Time is critical to getting results. For advertising to be successful, you need to analyze its results and make changes in time. It is also important to study the path and behavior of your customers and use this data to optimize your offer.
If you're in a business with a very short buying cycle, that's great. You will be able to track data much faster and adjust your advertising budget based on the information received. If, on average, it can take, for example, 6 months to close a customer, you need to wait for those 6 months to see the return on ad spend. nine0003
Underspending
The next big mistake in Facebook advertising is underspend. Ultimately, the size of your audience and the cost of your product will affect how much your cost per lead will be.
If you don't spend enough on ads, Facebook can distribute that money so that you don't generate a single lead per day. However, you can achieve amazing results just by increasing the budget.
Wrong campaign type selection
Another Facebook advertising mistake companies often make is choosing the wrong campaign type and objective.
We have already discussed three types of advertising that are important to include in your marketing strategy. Goals are chosen based on the type of ad, but if you're interested in generating leads, don't limit yourself to reach and brand awareness goals. It's important to understand that the Facebook algorithm will help you achieve your goal, so it's important to be clear about what you want to achieve with your ads. nine0003
Learn how to run effective ads based on your business objectives in the social media marathon.
Incorrect data parsing
The final mistake to avoid is not understanding how to parse data in Ads Manager.
The good news is that you can choose which ad metrics you want to track. In Facebook, you can set up any custom reports. To do this, select the Columns option in Ads Manager and click Customize Columns from the dropdown menu. nine0003
Here you can add and remove metrics to track. Next, Facebook will show exactly the indicators that you have selected in the report. For example, you can track the number of leads generated by each ad, cost per lead, impressions, clicks, and many other metrics.
Key Findings
These steps will help you determine the right Facebook ad budget for your business. First of all, it is important to define your goals, know the industry data and your brand data. nine0003
Next, determine how to allocate the budget between different types of ads. Don’t forget about the need to allocate funds both for building an audience and for promotion of the offer and retargeting. Keep proportions to maximize your marketing results.
