How Much Do Facebook Ads Cost & Their Benefits
How Much Do Facebook Ads Cost [Answered]
Did you know that Facebook is one of the most visited websites? The site boasts a whopping 2.2 billion monthly and close to 1.5 billion daily active users, a trend that is expected to keep growing over the years. With such huge traffic, it’s safe to say that this social media giant is one of the best venues to create demand for your products or services, through advertising. It's no wonder why so many users are searching for "how much do facebook ads cost" on Google. They want a straight forward answer to questions that require several factors covered in this blog.
Facebook advertising is an investment that demands in-depth evaluation in order to get the most out of your marketing efforts. For this reason, it’ll be wise if you first understand how much do Facebook ads cost and the factors that impact the cost.
To make this entire process easy, the Digital Shift team has developed a Facebook advertising cost calculator tool. If you're in a hurry you try our free facebook ads calculator tool straight away. It's really easy to use, all you have to do it enter in your targets and it will instantly calculate your Facebook ad cost requirements.
Facebook Advertising Cost Broken Down
According to a recent report by one of the Facebook Marketing Partners, the cost of advertising on Facebook is determined on two criteria: cost per click (CPC) and cost per thousand impressions (CPM). On average, CPC costs $0.26 while CPM costs $7.19.
With CPC you pay when someone clicks on your ad, while with CPM you pay to show your ad to 1,000 people regardless of how many people will interact with your ad.
But don’t be quick to start your Facebook ads with these rates plastered in your mind. There are a few crucial factors that dictate your Facebook ad cost. They include:
1. Your Bid
Facebook advertising works by auctioning a specific ad space, where the winner isn’t necessarily the bidder with the highest monetary value. The winner of the auction is the advertiser whose ad creates the most value to the targeted user. Nevertheless, you still have to place a monetary bid to show your interest.
There are two main ways to bid for your ads: automatic and manual bidding. If you choose automatic bidding, Facebook sets the bid amount for you with the aim of getting you the most engagements at the best price. The automatic bid option is always recommended when you’re unsure of how much you want to bid.
With the manual bidding option, you’ll personally set the maximum amount you’re willing to spend to get the desired results. When you bid too low, your ad may not get the exposure it deserves, meaning you won’t reach your sales goals.
Facebook always encourage marketers to focus on Return on Investment (ROI) rather than the lowest cost.
2. Ad Quality and Relevance
Facebook determines the quality and relevance of your ads based on the number of positive impressions (likes or views) as well as negative feedbacks.
Facebook will show your ads more if your relevance score is high. You’ll also pay less to reach more of your target customers. The platform also provides a relevance score metric to help you gauge how relevant your ads are to the audience.
3. Estimated Action Rates
When starting a Facebook campaign, you need to have a goal in mind. It can be site conversions or clicks; this can be referred to as the estimated action rate. By setting a goal, Facebook will show your ad to the people who are likely to take the targeted action.
Although Facebook isn’t clear enough on how this affects your ad cost, it’s expected that the higher your estimated action rate is, the lower the cost of advertising.
If your ad has a low estimated action rate, Facebook may compensate by increasing your bid, if you had selected the “automatic” bid option. This increases the odds of your ads being shown to the target audience, thereby increasing the estimated action rate.
4. Your Target Audience
The general demographic of your target audience has a huge impact on the cost of your Facebook campaign. The higher the competition among marketers, the higher the cost of advertising.
The subject demographics include; age, location, gender, and language. Additionally, audience attributes such as interests and behaviours also factor in the demographic influencing ads pricing. It’s recommended that you experiment with various audiences in order to find one that falls within your budget.
5. Time of the Year
Similar to any other businesses, Facebook advertising has its own peak and offseasons. During the peak seasons such as holidays and end-year festivities, the advertising cost shoots up due to the increase in the number of advertisers, leading to high competition.
So, if you’re looking to cut down the cost of advertising, try running campaigns when there are no popular holidays. But still advertising during holidays can be worthwhile because you get more engagement.
6. Placement
You can manually choose where you want your ads to appear or let Facebook decide it for you. In any case, the location of your ad affects your CPC and/or CPM.
Positions for ads on Facebook include; newsfeed, desktop’s right column, and Audience Network.
Since Instagram is a subsidiary of Facebook, you can also choose your ads to appear on Instagram’s newsfeed. According to Facebook, this gives you more opportunities to reach your targeted customer as well as help reduce the average cost per result of your ad.
While this seems like a good deal, you have to consider whether your target consumers are active on Instagram before investing in this plan.
7. Ad Optimization
Ad optimization is closely linked to your ad relevance and estimated action rate. Your choice of optimization shows Facebook who to show your ads to.
For example, when you choose to optimize for clicks, Facebook shows your ad to the audience who are more likely to click. As a result, this affects your estimated action rate and relevance score. The higher the relevance score and/or estimated action rate, the less you’ll pay.
If you fail to optimize your ad for the result you want, Facebook won’t show your campaign to people who would act on it positively. Therefore, you’ll end up paying more for the results.
8. Your Industry
Different industries are charged differently for advertising on Facebook. So, the product or service you’re selling has a lot to do with the cost of your ads. For example, if you’re offering plumbing services, you’ll obviously be charged higher than a marketer advertising their e-book course on Facebook.
Tips for Cutting Down Facebook Costs
To many marketers, the cost of Facebook advertising is worthwhile; others, however, may find it a little bit expensive. In either case, wouldn’t it be nice to lower your Facebook ad costs, despite the amount you’re willing to spend?
Besides, it’s possible to reduce the cost of advertising without compromising on the quality and success of your campaigns.
So, here are a few tips to help you cut down on Facebook advertising costs:
Split Test
Split testing allows you to lower your CPC by allowing you to determine what your audience prefers to see in your campaigns. Therefore, ensure you make different versions of your ad and monitor their performance. This will help increase your ROI and conversion rates.
Utilize Retargeting
Retargeting means advertising to a “warm” audience – those who have already interacted with your Facebook page. Advertising to them increases your click-through rate, which lowers your CPC.
A good example of retargeting is sending a follow-up ad to users who had previously watched your video.
Hire an Advertiser
If you’re new to Facebook advertising, it can be overwhelming trying to get the results you want without blowing up your budget. In such a case, it’d be wise to leverage the expertise of an experienced advertiser to help you create effective ads at a reasonable price.
Top Benefits of Facebook Ads
Now let’s delve into reasons why Facebook advertising should be a top priority in your marketing strategy list.
1. Laser-Focus Advertising
Facebook ads allow you to narrow down your ad focus to the audience who are likely to be interested in your products or services.
Unlike the brick-and-mortar advertising that often fails to attract a specific audience, the platform gives you an insight into audience demographics, behaviors, and interests. This enables you to design your ads in a more accurate alignment to your audience.
2. Connect with More Audience
With billions of active users every day, advertising on Facebook is your best bet if you want to reach out to more audience.
It can also be a viable option if you want to expand your brand by targeting international clients. Most traditional advertising methods don’t make it easy to reach the audience beyond your locale.
Moreover, when you factor in the possibility of your target audience sharing your ad to their network of friends, you’ll notice that advertising on Facebook can significantly increase your reach.
3. Extensive Analytics
From Facebook’s Advert Manager Section, you can keep track of the performance of your ads. It allows you to see how much you’ve spent and earned as well as the conversion metrics.
With this data, you can make adjustments to your ads to make them more effective and achieve the desired results.
4. Goes Beyond Text
Facebook gives you the power to creatively craft your adverts. You’re not limited to text only; you can explore your creativity using videos and pictures to showcase your products.
This allows you to capture your audience’s attention and reach out to more customers.
5. Cost Effective
Compared to advertising using conventional methods, Facebook is more affordable. You don’t have to spend a lot of money designing ads or creating long-form content like in traditional advertising strategies.
Moreover, with Facebook, it’s possible to reach a huge population of your audience, for just a few dollars. It becomes even more affordable with the fact that you can lower the amount you spend on advertising on Facebook, without hurting the success of your ads.
6. Call to Action
Facebook allows you to include a call-to-action button on your ad such as Book Now, Contact Us, and Sign Up, among others. These buttons are a good way of capturing leads as well as creating an emailing list.
7. Constant Feedback From the Audience
Customer’s feedback is essential in streamlining products or services to meet the needs of the consumers. Using Facebook ads, you can collect your customers’ views and concerns through the Like and Comment sections.
These sections serve as the point of interaction where you can answer queries and respond to grievances made about your product. Additionally, feedback from your customers often contain keywords that you can use to optimize your page content so as to improve your SEO ranking.
Comments from your customers can also serve as testimonials, thereby increasing your customer retention rate.
8. Complements Your Organic Strategy
Having a Facebook page for your business is an organic strategy to reach more audience. But, not everyone will see your regular posts and updates including those who may have liked your page.
You’ll need to use Facebook campaigns if you want to appear on the newsfeed of a wider audience and to make sure all your warm audience sees your posts.
9. Drives Off-Line Sales
When a customer is attracted to your product after seeing an ad on Facebook, they’ll most probably visit your store. This happens if your store is within their reach.
10. Drive Repeat Business
Facebook has a feature that allows you to import the contact of your audience from your email list to your Facebook. This allows you to advertise to people who are more likely to buy from your business.
How Much Do Facebook Ads Cost: Final Word
The answer to how much do Facebook ads cost shouldn’t be prioritized. Instead, try to determine your ROI when advertising on Facebook. If you can accurately establish your ROI, you may as well slash down the cost of running Facebook campaigns while still getting the results you want.
Don't forget to check our our Facebook Ads management pricing and services, or try our free facebook ads calculator tool. Simply answer four questions to calculate your Facebook ad cost to reach your goals.
