How Much Does It Cost To Advertise On Facebook?
Do want to know how much it costs to advertise on Facebook?
Do you have specific goals you want to achieve with your Facebook advertising budget?
If you're looking for a quick ballpark figure on how much it costs to advertise on Facebook, here you go:
The cost per click (CPC) for Facebook advertising is on average $0.27 per click.
On the other hand, the cost per thousand impressions (CPM), according to Hootsuite, costs about $7.19.
CPM is simply the cost per impression or the amount of money you pay to potentially reach 1,000 people.
Now that you have an idea of what an average cost of a Facebook ad is, there is a lot more to learn about Facebook ad costs even for a seasoned marketer.
Therefore, in this article, you will learn why it benefits you and your brand to invest in Facebook ads.
You will also learn how Facebook determines how much you pay for your targeted campaigns and much more.
Let's get started.
Table Of Contents
#1. Why Should You Buy A Facebook Ad?
#2. How Much Does A Facebook Advertising Cost?
#3. How the Facebook Ad Auction Affects Ad Cost
#4. What Determines How Much You Pay For A Facebook Ad?
#5. Conclusion
#1. Why Should You Buy A Facebook Ad?
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With Facebook, you pay to play.
The main reason you need to advertise on Facebook is that the platform's algorithm has been making it hard for any brand to get traction from its organic marketing efforts on its business page.
As it stands now, less than 0.5 percent of your fans, on average, will see your updates on your Facebook business page.
Ouch!
But here is the deal:
Facebook ads work.
Though many swear by Instagram ads, Facebook ads are a MUST if you want your target audience to discover your business.
However, recognizing the awesome power of the social media platform, millions of savvy marketers globally are gladly advertising on Facebook.
And the numbers prove it.
How big is the number?
According to Statista, “In the second quarter of 2020, Facebook stated that nine million active advertisers were using the social networking platform to promote their products and services, up from 7 million advertisers in the first quarter of the previous year”.
With over 9 million active advertisers on the platform, outsourced social media management agencies are cutting the cost of your Facebook ads spend as you expand your reach on the social platform.
Moreover, Facebook ads boost your overall digital marketing efforts by increasing your brand awareness, attracting leads, and converting users into customers.
Here's the good news:
You don’t even need a big budget to start getting results.
With just about $50, your campaign can reach 5,000 to 10,000 people.
Also, you can narrow your campaign to a tiny segment of your target audience.
It gets better.
Here are other reasons why you should not ignore advertising on Facebook.
#1: Your Target Audience Is On Facebook
How many users does Facebook have?
Statista, reports that Facebook is the biggest social network worldwide and has over 2.7 billion monthly active users as of the second quarter of 2020.
Active users are those who have logged in to Facebook during the last 30 day
During the last reported quarter, the company stated that 3.14 billion people were using at least one of the company's core products (Facebook, WhatsApp, Instagram, or Messenger) each month.
With a user base of 2.7 billion monthly active users, Facebook is providing businesses with the largest advertising opportunity since search.
Having said that:
Your target audience is among the 2.7 billion monthly active users on Facebook that your competitors are marketing to.
But how do you find them?
You’ll find out in reason #3.
#2: Facebook Ads Are Cheap
Look at the graph above for a moment.
Do you see how Facebook Ads compare with the other social media and traditional marketing platforms?
With the COVID-19 global pandemic, more people are at home and on social media.
The more eyeballs that are on Facebook, the more of your target audience that is on the platform to see your ads.
Facebook CPM has gone down drastically!
With a CPM cut of more than 50% during this global pandemic, you can reach as twice as many people for the same amount of money.
#3: Facebook Is The Best At Targeting Your Target Audience
Facebook ads let you target users by location, demographics, age, gender, interests, behavior, languages, or locations and connections.
You can pretty much target any segment of your buyer persona and layer them upon each other. This helps you reduce questionable, out-of-market clickers.
Facebook’s ad targeting options are above board. On Facebook, you can target users by:
- Age
- Gender
- Interests
- Connections
- Relationship Status
- Languages
- Education
You can use each option to target any segment of your audience.
However, most marketers focus on location, age, gender, and interests.
#4: Facebook Ad Re-marketing Increases Sales
Facebook re-marketing or re-targeting is the act of running ads targeted to past visitors who have seen your campaign.
Using Facebook's tracking cookie or pixel, you can identify visitors who did not take your specified action.
You can run an ad targeted at their behavior.
Re-marketing is a proven tactic for enticing customers who escaped your sales funnel to come back and convert.
This strategy works wonders because the target audience has already seen your campaign, and they are more likely to be interested in your products or services at some level.
#5: Facebook Ads Generate Qualified Leads
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Use Facebook Lead Ads to generate leads.
The app includes an in-browser Instant Form that visitors to your campaign can fill out.
Facebook pre-fills parts of your instant form based on information users already shared on Facebook.
The information could include their name, email address, and phone number.
This strategy increases the number of completed forms and works especially well on mobile phones.
By advertising on Facebook, your page acts like a landing page where you include a lead capture form.
#2. How Much Does A Facebook Advertising Cost?
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A great approach to Facebook Ads is to think about how you can make your budget deliver the best results for your brand.
However, Facebook advertising costs is not the same for every industry.
The average CPC is $1.86. Apparel is the cheapest industry, with a 45-cent CPC.
On the other hand, the most expensive industries are finance and insurance, with a $3.77 CPC.
However, Ad campaigns that are focused on earning likes or getting an app download can expect to pay $1.07 per like and $5.47 per download, on average, respectively.
Facebook Cost Types
The cost of your Facebook ad will depend on many factors, like ad placement, target market, industry, location, and more.
Let's break the pricing models highlighted above:
Cost-per-Click (CPC)
Using the cost-per-click pricing model, advertisers pay only when a Facebook user clicks their ad.
This type of ad works best if the goal is to encourage users to click away from Facebook to the advertisers' website or landing page.
For this type of advertising, the common call to action (CTA) that a user clicks on may include - “Learn More”, “Shop Now” and “Sign Up".
The average for Facebook CPC ads is $1.86 across all industries.
Now:
CPCs by industry go from as little as 45 cents for apparel to $3.77 CPC for finance and insurance.
When compared to Google, Facebook's cost-per-click is more affordable.
For example, the average CPC on Google Ads is $2.69. And there are many industries and categories with CPCs of over $5.
This pricing model is a great fit for those wanting to send users to a landing page.
Cost-per-Mille (CPM)
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Another common pricing strategy is Cost-per-mille (CPM).
CPM means the cost of 1,000 impressions.
When compared to CPC ads, CPM is often a lower-cost alternative.
When compared to CPC ads, CPM is often a lower-cost alternative.
That said:
Since impressions do not translate into user interactions, CPM marketing pricing is best used for growing brand awareness.
Facebook ads' cost per 1,000 impressions across all industries is $11.20.
That equals only 1 cent per impression.
The price you pay depends on your target market and how competitive the bidding for that audience is.
In other words, the cost of your ad goes up or down based on how competitive your target audience is in your chosen location.
CPM is the best advertising model for creating brand awareness.
Cost-per-View (CPV)
Cost-Per-View, or CPV, is an advertising model that charges for the campaign based on the number of views or engagements a video ad receives.
CPV advertising opportunities provide a platform for brands looking to expand awareness.
How CPV differs from CPM advertising
What distinguishes CPV from Cost-Per-Impression (CPM) is that it requires deliberate attention from the user viewing the video ad.
CPV is excellent for brands that use video content to achieve their marketing goal with their target audience.
Unlike Youtube that counts a video view after 30 seconds, a video only has to run for just 3 seconds for Facebook to consider it a view.
If more than 3 seconds is best for your message and audience, you may consider a different pricing package.
How much you pay for a CPV depends on the quality of the video, location, and your target audience.
The CPV can range anywhere between $0.01 to $0.2.
Since it is not easy to figure out the effectiveness of a CPV cost structure, many savvy marketers use click-through rate (CTR) to measure the effectiveness of the ad.
This model is best for a brand with a powerful message that wants to grab the attention of its target audience with a video
Cost-per-Action (CPA)
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CPA stands for cost per action.
It is also known as cost per conversion.
This is the price you pay for not only a user clicking on your Facebook ad but taking an action on your website.
An action could be a purchase, a newsletter sign-up, an app download, or one of several other conversions.
However, Facebook advertisers set the action they want to be charged for and not the platform.
The advertiser can set the actions to include newsletter sign-ups or app downloads.
The action could also include online purchases tracked via the Facebook pixel.
This Facebook advertising model is usually the most expensive pricing model.
Look:
The average CPA for Facebook ads is $18.68.
The way Facebook has structured its CPA may be complex to the casual observer.
With CPA cost pricing, you can go from a low of just $7.85 for the education industry to a high of $55.21 for technology, per action.
Therefore, to be cost-effective, the value of your audience’s action should be more than than the CPA.
If it is not, your campaign will yield a negative return.
In summary, this pricing model is best for advertisers that link clicks to download an app or register for an event.
Cost-Per-Like (CPL)
Cost-Per-Like or CPL for short simply means an advertising pricing model that is used to evaluate the effectiveness of a social media campaign on Facebook.
For example, a brand could pay for signup from a customer who’s interested in the offer the brand is promoting.
This model also the Cost per Lead.
Interestingly, Cost per Lead or CPL is directly related to CPS services.
How so?
With CPS, the brand pays for each validated lead that Facebook has generated.
Cost-per-like pricing is similar to Cost-Per-Click. With CPC, you pay for the click but with CPL, you pay for “like” your business’ Facebook page.
The cost is on the low side and a good fit for businesses that are new to Facebook and looking to build brand awareness.
Now:
To be highly effective with CPL, you'll need to be consistently active on your Facebook business page.
It should be noted that paying for Facebook 'likes' won’t boost a brand's awareness unless Facebook business pages are used consistently.
Okay:
How much should you pay for CPL?
The average CPL for Facebook ads is 12 to16 cents.
Though those are low prices to pay for a Facebook ad, the value you get from CPL is brand awareness.
That's it.
It does not convert to direct revenue like a CPA.
Therefore, CPL is best for advertisers that want more Facebook 'likes' for their business page.
#3. How The Facebook Ad Auction Affects Ad Cost
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It is important to understand how Facebook ads auctions work and how they affect your advertising costs.
Having a good knowledge of how Facebook bid auction works, helps you optimize your Facebook ad costs.
How does the Facebook bidding auction work?
Facebook explains:
"For each ad impression, our ad auction system selects the best ads to run based on the ads' maximum bids and ad performance.
All ads on Facebook compete against each other in this process, and the ads that our system determines are most likely to be successful will win the auction".
In simple English, Facebook is saying that the campaign that bids the highest doesn't necessarily win their advertising space.
In other words, the positive experience of the user on their platform is more important than money.
So the winner of the bid is the campaign that would provide the best overall value to the user.
Factors that determine who wins Facebook's ad bidding war:
Bid:
A bid is the amount of money you are willing to pay for a user to interact with your ad.
The amount of money you bid is one of the most powerful strategies for boosting the performance of your ad.
It impacts the success of your ad and the overall results of your social media advertising campaign.
Ad relevance:
Before awarding you the bid, Facebook wants to know which ad best serves its targeted audience.
Is it your ad?
The kinds of experience users have with your ad, whether positive or negative determines its quality and relevance.
With a high-quality ad and relevance score, you can boost the effectiveness and success of your ad on Facebook auctions.
Projected ad success:
Project ad success is Facebook's estimation of which ad is most likely to get the most conversions or engagement. It demonstrates the likelihood of users engaging with your ad.
For instance, by clicking on your ad or downloading your app.
To win a competitive ad, your campaign needs a high estimated action rate.
That means quality and relevant ads for your audience.
After considering those 3 factors, if your ad is away with the highest total value Facebook shows your ad.
Now:
After your ad has been live for a while and users are engaging with it, Facebook will review the ad’s high quality and may even reduce the price while increasing the reach
#4. What Determines How Much You Pay For A Facebook Ad?
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Such factors include your country, age range of target audience, gender, and where the ad will appear on the Facebook platform.
Here are other factors that may affect how much you pay for your Facebook ads.
Industry
The industry that your brand is targetting affects your costs.
As we have already seen in this article, the price difference between apparel and technology companies is like the difference between day and night.
A makeup business targeting young ladies may have a lower advertising cost than a computer manufacturer selling their latest model.
WordStream ran a study on the advertising cost per click for different industries it represents.
It found out that $1.72 CPC is the average across all industries.
Among the industries surveyed, the cheapest is apparel with a low of $0.45 CPC and the highest is finance and insurance with a CPC of $3.77.
Time of year
The time of the year that you advertise on Facebook has a great impact on your costs.
November and December are the busiest time of the year with the highest competition for ad space.
During these peak times, there is more competition for ads, and it costs more as a result.
If you are planning to advertise on Facebook during the holiday season, here are the key events to plan for:
- Thanksgiving Day
- Black Friday
- Cyber Monday
- Christmas
- Post-Holiday Sales
- New Year’s Eve
- Thanksgiving Day
- Black Friday
- Cyber Monday
Therefore, if your brand works on an annual budget, keep this increase in mind.
Objective
Choose your objectives based on what you want to achieve.
Your Facebook ad objective is simply what you want people to do when they see your ads.
Do you want to show your website to people interested in your business?
Your objective is to create ads that encourage people to visit your website.
Here are the three broader categories, or goals, that your ad objectives may fall under.
Awareness Objective:
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With awareness objectives, you have two choices - brand awareness and reach.
Let's learn more about what you accomplish with brand awareness.
Brand Awareness
As the name implies, use this objective to create awareness for your brand.
You want your audience to know your brand and not necessarily engaging with your content, click through, opt-in, or purchase.
This objective will help you reach people that are more likely to pay attention to your campaign.
Companies like Coca-Cola or McDonald’s that have huge advertising budgets can easily spend to put their brand in front of mind with consumers.
They are not necessarily looking to generate web traffic, leads, or sales but brand awareness.
On the other hand, smaller businesses with small advertising budgets might find this type of objective valueless and a waste of money.
Reach
An ad objective focused on reach gets your ad seen by as many people as possible within your target audience and budget limitations.
If you want to reach as many people as possible within a small target audience, reach an objective can help you achieve your goal.
Even if the objective is to visit your website, watch your video, or convert on your website.
Consideration
There are many types of Consideration objectives. They include Traffic, Engagement, App Installs, Video Views, Lead Generation, and Messages.
You’ll pay in Call-Per-Action.
Consideration objectives get people to consider or think about your business and look for more information.
For instance, Joe's BBQ has a website that tells its story and lists some of its delicious and unique offerings.
With the Traffic objective, they can create a campaign that encourages people to visit their site to learn more.
Use this type of objective to engage with an audience that is a little familiar with your products or services and would like to learn more.
Conversion
This is the final stage of your sales funnel.
The Conversion objective encourages people interested in your business to buy or use your products or services.
Now:
If Joe's BBQ has opened a few new restaurants, using the Store Visits objective, the restaurant can create a campaign to encourage potential customers to stop by their nearest shop.
The Conversions include catalog sales and store visits.
You’ll pay for this in Cost-Per-Conversion or CPM.
Conclusion
Facebook ads are great for building brand awareness and generating leads.
With an average CPC of $1.72 and an average CPM of $11.20, the ads are generally considered affordable.
With Facebook ads, marketers can manage their costs while advertisers set their budgets.
No doubt you appreciate the awesome audience targeting the platforms afford.
It is the best marketing platform for advertisers who have a detailed understanding of their buyer persona.
Having said that:
Facebook advertising is not for the faint at heart.
So, what if you want to take advantage of Facebook advertising but don’t have the time for the learning curve?
Would you drop your core business and enroll in Facebook Blueprint?
Of course not!
Therefore, if you want to reap the benefits of advertising on Facebook is the most effective way, consider hiring our outsourced social media management services. ( Learn about social media management here)
Our team can create, manage and maintain your FB ads campaign for you while you focus on running your small business. Schedule a free consultation today.
For professional help in managing your Facebook ad campaigns and other social media accounts, contact us online or call us at +234 080 331 75396 to supercharge your online marketing!
WhatsApp us at: +234 080 331 75396 or +234 080 579 37786
