Facebook Ads Cost: Is It Worth Advertising In?
As a business owner exploring Facebook Advertising the first time, it’s normal to wonder how much Facebook Ads cost and if it’s worth investing in. After all, you are going to shell out some money when you start bidding for your business’ ads. So, how much does it really cost?
The answer is, “it depends.” Several factors contribute to computing how much every result costs you. However, one thing’s for sure; Facebook won’t let you spend more than your set ad budget. That’s the beauty of Facebook Ads—you set your budget, and Facebook will do the work.
The average costs for FB ads
As mentioned, there’s no uniform cost for Facebook Ads, as every industry differs, and there are so many more factors to consider. But to give you an overview, here are some remarkable numbers to provide you with some ideas.
Hootsuite reported that the average Facebook ads cost is $0.27 per click. If measured by cost per thousand impressions (CPM), the average cost is $7.19.
While AdEspresso claimed that the CPC for all countries is $0.97 on average. With $1.10 CPC for the US.
These numbers are continually changing; you can never really tell how much your CPC is unless you tried it yourself.
What will define your Facebook Ads Cost
All other variables aside, the two main things that will determine your FB ads cost are your budget and your bid.
The budget refers to the fixed amount of money you want to spend on a single ad or an entire campaign. Facebook even allows you to set the budget on a campaign daily or in its entirety
Bid, on the other hand, refers to the amount you are willing to shell out in landing an ad placement. If you don’t place a bid, Facebook will estimate it based on your budget and campaign duration.
Factors that affect the Facebook Ads costs
Here are the attributes that help you define how much your Facebook ads will cost.
1. Target Audience
The audience you target has a significant effect on your FB ads cost. The more you become specific to the type of people you want to reach, the higher the cost will be.
The audience from Facebook is so diluted that you need to find the exact ones that will click through your ads because they are genuinely interested. Facebook allows you to set the demographic profile you want to target, and the more you thin down the audience, the higher it costs since you can reach them almost instantly through your ads.
2. Ad objective
When placing an ad, Facebook will ask you what your marketing objective is. The categories to choose from include:
- Brand awareness
- App Installs
- Video Views
- Lead Generation
- Store Visits
- Product Catalog Sales
The more significant your objective is, the higher the costs will be. Anything that will convert sales will cost more than clicks and views.
3. Ad budget
The budget you set affects the overall bid amount you place. No matter how much it is, it has a significant impact on your ad bids, performance, and generated results.
The higher your budget is, the more likely you are to meet your ad objectives. But you can still make do with a limited budget. You just have to be more strategic in planning what your ads will be.
4. Ad bid
Having a higher bid against other businesses doesn’t guarantee successful ad placement. Sure it does amp up the chances of getting shown, but Facebook depends on the presented highest value. Facebook wants to ensure that they help advertisers get results from the right audience, while the audience reaps positive experience from those ads.
The factors that Facebook considers include:
How much you are willing to shell out for every user’s interaction with your ad.
- Estimated action rate
This refers to the users’ likelihood to interact with your ads—whether by clicking through, viewing, installing, or purchasing.
- Ad quality and relevance
The better the quality your ad has, the more likely it is to become successful. This refers to the user’s feedback with your ads—if they are negative or positive.
When bidding for an ad, your campaign will be pitted against competitors targeting the same audience. Whichever shows the highest present value will win the auction.
5. Ad placement
There are several areas to place your ads in, and all costs vary. Here are where Facebook ads appear:
- Instant article
- In-stream video
- Right column
- Messenger Inbox
- Messenger Sponsored messages
- Audience Network
- Rewarded video
- In-stream video
Instagram placement costs higher than those of Facebook’s. It is reported that the average CPC for FB ads is $0.30 less than Instagram.
6. The time to advertise
During peak times or seasons, the competition gets tighter. With this in mind, placing advertisements on special holidays like Thanksgiving, Black Friday, Cyber Monday, Christmas, and New Year can increase the costs of your Facebook ads.
In addition to this, the specific times of the day you want your ads shown also impact the overall costs.
7. Your industry
Your business’ industry has an impact on how much your ads are going to cost you. It’s fair to say that the higher your products’ costs are, the more likely it will cost you more. However, that’s not always the case.
Here are some CPC data gathered by Salesforce Advertising Index in Q3 2015 in various industries:
- Entertainment – $0.16
- Automotive – $0.18
- Food & Beverage – $0.19
- Retail – $0.25
- Technology – $0.40
- Education – $0.44
- E-commerce – $0.51
- Professional services – $1.01
8. Optimization for Ad delivery
Upon placing your advertisement, you will be prompted to choose your ad optimization. Just click on the “Show Advanced Options” below “Budget & Schedule,” and you will find the tick box for “optimization for Ad delivery.”
The option you choose will dictate which users Facebook will show your ads to.
- Link Clicks
Facebook will target the users who are more likely to click through
Facebook will show your ads to people as many times as possible.
- Daily Unique Search
Facebook will deliver ads to people up to once a day.
Your chosen option impacts your costs because all the actions made in your ads contribute to your relevance score and estimated action rate. Ensure that you choose the right optimization to reap the demanded action from users.
Are Facebook Ads worth the investment?
Yes, Facebook marketing is undeniably promising for businesses across all industries. With 7.7 billion active Facebook users as of Q2 2020, your brand is just one ad (or a few) away from reaching your target market and generating conversions. With a proven high return on investment (ROI), it is a must-try marketing strategy to bolster your sales.
If you want to dive into an extensive Facebook Ad tutorial, here are some well-recommended online courses from Skill Success you should check out: