How Much Does It Cost To Advertise On Facebook

How Much Does It Cost To Advertise On Facebook

Jun 25, 2021 16 min read

Facebook has 2.14 billion active advertising audiences, with an average user clicking on 12 ads each month.

Facebook ads can help you quickly scale your business & drive sales.

But it comes at a cost & for businesses getting started with advertising on Facebook these costs can be hard to understand.

Why? because there is no standard cost.

Facebook advertisements are dependent on a lot of variables such as ad objective, placement, quality & industry, location, etc.

We'll talk about all these factors about in detail & talk about the best ways to optimize Facebook ad cost.

Understanding Facebook Advertising

In the current era, Facebook has grown exponentially & provided highly targeting paid advertising & posts.

Facebook ads offer excellent business opportunities. Advertisement on Facebook supports both text & visual formats.

Further, you can boost your posts on Facebook by converting them into an ad or can use carousel ads demonstrating ten products linked to the corresponding page, or you can make a slideshow about your new product or services.

If you know how to advertise your business on Facebook, it can be a cost-effective way to draw attention to your brand or business.

Understanding Facebook Advertising

Image Source: Facebook

How Much Does It Cost To Advertise On Facebook

Are you seeking an answer to the question of how much it does to advertise on Facebook?

Facebook ad costs depend on CPC, CPM & bidding model, industry, objectives of the ad placement, etc.

But before initiating the search to undertake the different factors which impact your Facebook advertising cost, understand the know-how of the operational process of Facebook ad auction. It helps optimize your brand's Facebook ad costs. Let's check out:

Insight On Facebook Ad Auction

Following is an overview of the steps that leads to Facebook ad auction. Before that, check out how to launch your ad campaign:

  • Initiate your brand's advertising campaign and ad by logging into the ad manager. Then choose 'set your budget' & bid.

  • Facebook bid is how much you want to spend to pay per user to interact with your ad. The social networking site allows you to adjust your bid on the pricing & bidding section. Facebook automatically calculates your bid depending on your budget & the duration of your ad if you don't manually do it.

  • Select the actions you want to pay for that is likes, views, clicks, or downloads. And then build your audience using audience demographic, interest, and device targeting.

  • Once you have set your audience, work on ad creatives such as ad copy, images, and video, and then submit your ad for review. Once its approved & launch your ad campaign.

Insight On Facebook Ad Auction

Image Source: Facebook

After you launch your brand advertisement, Facebook ad auction happens. Facebook classifies each & every probable ad's bid, gauged action rates & ad quality. Estimated action rates & quality of the ads are used by Facebook to decide ad relevance.

Facebook creates total value of the ad depending on the bid, estimated action rate & ad quality. And then Facebook conveys the advertisement's highest total value.

Ad auction helps you understand which metrics such as Ad bid, Estimated action rate, Ad quality, Ad relevance matters the most for your ad & what does it cost.

To optimize these metrics, improve your ad's quality and relevance to users, & in that way, you can minimize your Facebook ad costs. As per the Facebook algorithm, advertisements with the most relevance cost less, and apart from that, it gets more visibility with users.

Factors That Determines Advertising On Facebook

To know how much it costs to advertise on Facebook, you need to understand factors that impact advertising on Facebook.

To generate a realistic budget for your brand ad campaign, you need to have in-depth knowledge about how the determining factors influence the cost of Facebook ads. Let's try to understand the factors:

Audience

Your target audience has a crucial impact on the cost of your Facebook ads. Your ad expenses differ depending on your focus on a particular age group & gender, or interest.

You can choose your audience depending on their demography or their attributes. To get the best result, it is advisable to create a specific audience rather than choosing a broad target audience base. Choose custom audience, look-alike audience.

When you choose a broad interest, your target audience becomes low-value users; they often click on your ads, you don't get action on your CTAs. Targeting comprehensive value results in low-performing campaigns.

Set your goals & priorities towards the people that can offer the most value to the campaign. It helps you to minimize the pay for clicks or views that provide zero value.

Ad Objective

The goals of advertising on Facebook range from awareness to consideration to conversion; ad objectives or goals also impact your Facebook advertising costs.

When you choose an objective related to conversion, it usually costs higher prices than an objective associated with awareness.
Ad objectives such as product purchase or store visits are costly.

The reason is that these actions have immediate value for the business & generate direct revenue for your brand. When you build your ad campaign, make sure to focus on the value of brand awareness and consideration.

Apart from providing real and tangible value, this action also decreases your Facebook advertising costs.

Ad Budget & Ad Bid

Your brand's advertising budget also influences your Facebook advertising costs. Choosing a more extensive budget gives you flexibility in strategy, but a smaller monthly advertising budget can also help you achieve your goal.

But when you choose a low budget, it allows you fewer conversions due to its performance limitations.

A Facebook ad bid is capable of directly increasing your advertising costs. You can minimize the cost by selecting an automatic bidding strategy and maintaining a high ad quality score.

Ad Budget & Ad Bid

Image Source: Facebook

With automatic bidding or lowest cost bidding strategy, your business can achieve the lowest possible CPC or CPA. It helps you to ensure the efficient use of your budget. Usually, brands initiate with this bidding strategy.

Target cost bid strategy or manual bidding helps your brand ad campaign to reach your desired CPC or CPA. If you target app installs, lead generation or conversion, product catalog sale campaigns, you can choose the bid strategy.

Ad Placement & Ad Quality

Advertising on Facebook allows you to place your ads across Facebook properties such as Instagram, Messenger, and the Audience Network.

Worth mentioning that Instagram has the highest CPC. The average CPC for advertisements on Facebook & Facebook Messenger is less than Instagram.

With Audience Network, you can place your ads on websites and mobile apps; audience networks have a lower CPC than Facebook and Instagram. You have the flexibility to automate the placement of your ads.

The quality and relevance of your ads have a crucial effect on ad costs. If you have a high relevance and engagement score, you have lower ad costs.

Ensure to design ads understanding audience, user expectations; it helps you to minimize your ad costs substantially.

Following are the steps to access your relevance score:

  1. Sign in to the 'Ads Manager' & click on the ad you want to view
  2. Select 'Columns' & click on 'Customize Columns'
  3. Choose 'Relevance Score' & click 'Apply'. You can see the Relevance and Engagement Score. However, to get your score as per the Facebook algorithm your ads require a minimum of 500 impressions.

Season & Industry

During festive seasons, like Christmas, Facebook advertising costs are inflated due to enhanced competition in advertising on Facebook. Businesses engaged in aggressive ad auctions with massive budgets.

It would help if you worked on your ad budget and bid to get the most of such peak seasons as consumers are more active in these seasons.

In peak shopping seasons, businesses tend to spend more on advertising. The increased demand for ad space results in a higher cost.

Your brand industry shapes your Facebook advertising costs as well. Industries like finance, insurance, and consumer services, etc. costs high.

Depending on your industry, Facebook advertising offers cost-effective options for building brand awareness, generating leads, driving conversions, and more.

Focus on planning a top-notch social media strategy to get the most from advertising on Facebook.

Season & Industry

Image Source: Facebook

Why Advertise On Facebook?

Across the globe, 200 million businesses, particularly small businesses, are using Facebook tools to reach out to their customers.

But why advertise on Facebook? Because, unlike traditional advertisement, Facebook ads have a greater reach, a wider audience, and custom ad prices. When you run an ad campaign for your brand on Facebook, Facebook ads give you a chance to be viewed by your targeted consumer base.

Wondering why? The reason is Facebook collects user data like location, interest & age, and with all available customer information, you can perfectly tailor ads & target your desired audience base.

Following are the answers to why you should advertise on Facebook & why you should consider Facebook a viable medium to run ad campaigns for your brand.

Incredible Targeting Option

Image Source: Facebook

  • Audience Feature Data: Facebook uses third-party data collected from Acxiom, Datalogix, and Epsilon to depict the features of the audience that include: lifestyle, household income, homeownership, household size, home market value, spending methods, retail spending, online purchases, purchase behavior. The data helps to narrow the target audience depending on their feature.

Basic Types Of Facebook Advertising

Here are the different types of Facebook advertising formats:

Video Ads & Image Ads

Video ads on Facebook are an excellent way to demonstrate your product features. You can use different types of video ads on Facebook. For example, short videos and GIFs are the video ads that quickly capture attention on a go, or you can create in-stream videos for longer watching.

Facebook allows you to run video ads in the news feed and stories or in-stream Facebook videos. Use video ads to depict your services or your product in action.

Video Ads & Image Ads

Image Source: Facebook

Image ads are cost-effective for advertising on Facebook. If you have a tight ad budget, you can opt for a high-quality image ad. Image ads help you draw users' attention towards your brand & also drive people to your website.

An easier way to start an image ad is to boost a post on your brand's Facebook profile with a good-quality image.

Carousel Ads & Slideshow Ads

A carousel ad allows placing up to ten images or videos inside a single advertisement, each of the carousel can link a specific product page. This ad gives the brand more creative space within an ad; you can highlight different products. With carousel ads, your brand can showcase details about a specific product or service, or promotion, or you can tell a story about your brand by creating one large panorama image using all the photos.

Carousel ads & Slideshow Ads

Image Source: Facebook

Slideshow ads on Facebook are a kind of video-like format, but it uses fewer data than videos. Use different stock images, still photos, or existing videos & music to create this type of Facebook ads. Since Slideshow ads require less data, people can watch these ads with slow internet speed as well.

Lead Ads & Collection Ads

Lead generation ad format assists in generating leads. You can use lead ads for your brand to gather newsletter subscriptions or sign-in users for trial or if you want to allow people to seek more information about your brand.

Facebook lead ads help businesses & brands collect users' contact information without them leave to social media.

Like carousel ads, collection ads are multi-type card advertisements. This format of paid ads on Facebook is available only for mobile devices. You can place five images or videos with clickable links.

Lead ads & Collection Ads

Image Source: Facebook

Collection ads make online shopping easy as it allows users to buy your products without leaving Facebook.

Dynamic Ads

Dynamic ads on Facebook automatically show the right products to users who have expressed interest in your website, app, or anywhere on the Internet. To start with dynamic ads, you have to work with Facebook pixel.

In dynamic ads Facebook will keep on testing different ad copy. It mismatches the ad creatives & measures how users are reacting to the display of the ad copy.

Source: Facebook

Upload your product catalog and set up your campaign as per your convenient duration.

Dynamic ads help find the right consumers for each product and ensure up-to-date pricing and availability. Dynamic ads significantly help in the increasing conversation.

With Statusbrew, you can manage the comments on your dynamic ads from a unified dashboard.

Learn How Facebook Dynamic Ads Are A GameChanger For Businesses

Facebook Advertising Performance Benchmarks

With a good understanding of Facebook advertising metrics, reaching your goals becomes more effortless. Check out the following terms to get a wholesome idea about advertising on Facebook:

Click-Through Rate (CTR)
CTR or Click Through is a Facebook advertising metric. It measures how often your users click on your ad & how many times your ad is displayed on the platform.

Your brand's ad campaign CTR is calculated by Facebook by dividing an advertisement's total number of clicks divided by the gross number of impressions and then multiplying it by hundred, and you'll get the CTR percentage. According to a study, a good Facebook CTR is between 2-5%.

Cost Per Click ( CPC)

CPC denotes the amount or the price you pay per click on your brand's Facebook advertising. Factors that impact CPC are such as clicks to visit another website, clicks to install an app, clicks on your brand's Facebook app, clicks to view a video on another website, call-to-action like 'Shop Now' click that helps the user to land on sale website.

You can optimize CPC if you manage your budget strategically & average cost per click for Facebook for all the industries is $1.72.

The cheapest clicks on Facebook is the apparel industry which is $0.45 per click; for travel & hospitality, it's $0.63, and for other retailers, it's $0.70

Cost Per Click

Image Source: Facebook

Cost Per Like (CPL)

CPL or cost per like denotes the prices marketers pay for each like on brands or business Facebook page, which comes from your Facebook ad. Make sure to optimize your CPL to cultivate a community for your brand & to grow your follower base. CPL tracks interactions of users with your ad that results in page likes.

CPL counts each likes when a user clicks the page likes button on your ad; it further counts likes when your user notices your advertising & later clicks the like button on your Brand's Facebook page.

As per the Facebook algorithm, Facebook counts any page like your profile is getting within 24 hours of your ad placement. You can optimize it by adjusting the attribution window in Facebook Ads Manager.

Cost Per Mile (CPM)

CPM is the price for 1,000 impressions on your Facebook ad. This is a standard metric used by the online advertising industry to measure the cost-effectiveness of an ad campaign on Facebook. CPM is used to compare the performance of ad publishers and campaigns.

Cost Per Action (CPA)

CPA denotes the price for each action a user takes on your website as a result of your Facebook ad. The act of your users can be a purchase, an app download, a newsletter sign-up, or one of several other conversions. The average CPA on Facebook across all industries is $18.68.

Relevance Score

Relevance score is gauged based on the positive and negative feedback on the ad to receive from the target audience. More positive interactions denote the higher the ad's relevance score. If your target users hide or report your ad, your relevance score will be lower. Ads have a relevance score between 1 and 10.

High relevance scores lower the cost of reaching people because the delivery system is designed to display the right content to the right people.

Advertisers should test ad creative options prior to running a campaign; they should use different combinations of image and copy with different audiences to understand the variety which can adhere to the highest relevance scores.

Ad Frequency

Ad frequency on the Facebook gauge the average number of times the users have seen your ad. Frequency is deliberated by dividing impressions by reach. An impression is, is the total number of times your ad was displayed on the platform & reach is the numeric of unique users who have seen your advertisement.

Connecting your ad account with Statusbrew, you can get the Facebook Paid Performance Report containing all your campaign level data depending on your different metrics and KPIs.

Best Ways To Advertise On Facebook To Minimise Cost

Facebook provides a greater reach, a wider audience, and custom ad prices that never waste when appropriately used.

Facebook ads, and most social media ad services for that matter, work on a per click basis. The prices, however, vary according to the audience, type of business, and a few other factors.

And since Facebook ad costs depend hugely on several variables, you should have a strategy to use the best ways to advertise on Facebook to minimize cost.

Use Specific Ads

The most important thing for you to do is to filter your audience to target the most appropriate customers for your products. You should design your ads in a manner that speaks to a specific group of people.

Use Specific Ads

Image Source: Facebook
With specific ads, you have a better chance that the target audience clicks and follows through, meaning that your ad didn't go to waste. While general ads could reach a bigger audience, specific ads have a better chance of appealing to the customers who need the product.

Moreover, specified ads are further probable of lowering your ad costs as Facebook reduces your ad costs if they feel that your ad is relevant to your target audience.

Cross Check Target Audience

After you have decided upon the audience you want to reach and designed your ad accordingly, you should cross-check your ad with other ads you have made for similar products or services and the audience they target.

Suppose you happen to overlap target audiences for several products and services. In that case, there is a high probability that you would be wasting valuable money and effort in pitching multiple products and services to one single customer.

Customers are going to settle for a single product or service. Thus, the other part of your effort goes to waste. You should therefore be able to ascertain that there is minimum overlapping while pitching products and services.

Custom Audience

Facebook’s custom audience ad targeting feature that allows brands to find existing audiences among people you know on the platform. It includes users or the followers whose contact information you know.

You can use email addresses, Facebook user IDs, or app user IDs or phone numbers, to generate & save the audience whom you would like to show your ads.

Facebook compares the contact information you submit with their own data and helps find your customers or leads.

  • To create a Custom Audience for your Facebook advertisement campaign:
  • Click on the Ads Manager’s Audience tab
  • Choose the option ‘Create a Custom Audience’

Season & Industry

Image Source: Facebook

Choose from five options to reach people: existing customers, leads, or users who have interacted with your brand or business on Facebook. Per ad account can create upto 500 Custom Audiences.

If your Custom Audiences list has 1000 people you should choose CPM bidding to ensure that your ad is reaching your target audience.

Lookalike Audience
Lookalike Audience is the subset of your brand’s Custom Audience list. The Lookalike Audience is your target audience that you have generated from a source.

The source can be Custom Audience, people who have visited your website or post-click landing page, mobile app data or followers of your page.

Facebook finds people who have similarities with your source audience, or similar to them or look alike. You have the flexibility to choose the size of your lookalike audience at the time of the ad creation process.

You can generate up to 500 lookalike audiences from a single source audience.

Saved Audience
On Facebook you can save an audience from your present or previous ad campaigns to use it for your upcoming ad campaigns. Generating a Saved Audience helps save your time as you don’t have to narrow down a target audience list for every campaign.

To create a Saved Audience list for a campaign, click on Ads Manager ‘Use a Saved Audience’ option and prepare an audience list from available targeting options. You can edit your Saved Audience on your Audiences Page.

Tools On Facebook

Several tools in Facebook helps to minimize your advertising cost. For example, there is Facebook Audience Overlap Tool. This tool lets you know if you have an overlapping audience, and if you do, the percentage of it.

This then allows you to make valuable changes in your ads and strategies to minimize these overlappings and reduce costs.

Facebook Pixel is another tool that lets you know a bit more about your customers; their demographic presence, their likes, dislikes, and their hobbies.

It further tells you about their consumption habits, which will help you place the customer based on a scale of importance you create.

Reinforce Your Advertising Effort On Facebook With Statusbrew

With Statusbrew, businesses can promote their organic posts connecting Facebook Ad accounts to the Statusbrew dashboard.

  • Visualize a complete timeline of all your ads and promotional posts with our easy-to-use calendar and reimagine content planning.

  • Quickly hide/delete or reply to Facebook ad comments, dynamic ad comments, Instagram ad comments as you please or automate the whole proccess.

  • Get in-depth insights into the performance of your content like organic v/s paid impressions, engagement, and much more.

Book a free demo with Statusbrew or start your free trial.

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Rajashree Goswami

Rajashree is a content creator & researcher at Statusbrew. She loves to create content that is expressive & communicative.