We have previously discussed the 07 tips to reduce CPC on Facebook ads, but how much does Facebook advertising cost in real life?
The answer is, it depends. It depends on a lot of factors, and the cost of each ad can fluctuate a lot– it can be as high as $20 and as low as 60 cents per ad. There are over 1.6 billion people connected to Facebook worldwide, and your ad costs can vary according to the day, month, time, geolocation, and every other factor.
Maybe a better approach could help you get to the maximum audience in your budget. But will it actually bring conversions? Is investing a lump sum amount on a Facebook ad going to get you any fruitful results?
Facebook ads have an average CPC of about $1.72 per click and CPM (cost per thousand views) of around $11.20.
But wait, the discussion doesn’t end here!
Above I have mentioned that it depends, and in this post, you will find out the factors on which Facebook advertising cost depends, how much money do you need to invest (though these are rough estimates), and whether the outcome is worth the price.
Factors Affecting Costs Of Facebook Ads
The following factors decide how much money are you going to invest in your Facebook ad campaigns from your pocket:
1. Your Bidding Type
The first and foremost thing affecting the ad cost is the auction and the bid. Interestingly, ad value matters more than your bidding cost. So, Facebook does not guarantee better results for the highest bidder.
Facebook aims for two things while advertising:
1. Helping advertisers to reach their desired audience.
2. Creating a relevant and familiar environment for the viewers.
One can only meet the above two criteria if they add value to their ads. When Facebook compares two ads in bidding, the one which seems more relevant and engaging takes a more favorable spot. The following points determine if an ad carries the value:
1. Your total bid.
2. The quality and relevance of your ads.
3. An estimation of viewers’ action rates.
The advertisement with the best combination of all three points wins the online market. Also, there are two types of bids- manual and automatic.
Automatic: If you are a newbie, and unsure about how much to invest, opt for this option. In this, Facebook sets the bidding for you to get the best audience reach and engagement.
Manual: In this option, you can decide the maximum amount that you will spend on your bidding based on your knowledge (ex., $3 per click).
2. Marketing Objective
You don’t need to market your services in front of EVERYONE. Optimize your advertising campaign based on your marketing goal. Let me explain how it affects your ad costs with an example.
Suppose you own a startup, and your main aim is to get maximum clicks on your new website.
Now Facebook has to choose between two types of audiences. The first one seldom clicks on an ad, but when they do, they are more likely to purchase. The second one clicks on ads more often but rarely makes a purchase.
If you display your ad in front of the first category of audience, there is a very tiny probability of getting clicks. Whereas, if you market your ads only in front of the second type of audience, you will get more instant clicks, which was the main agenda behind your campaign.
There are three types of ad objectives:
Awareness: When you want your brand to stay on the top of your audiences’ minds, Facebook offers you exposure among the maximum number of audiences in your niche.
Consideration: These ads make people start thinking about the services that you provide.
Conversion: Facebook displays these ads only in front of the viewers who are more likely to convert into consumers.
Based on your ad objective, there are three types of ad budgets.
Click on the Budget & Schedule > Show Advanced Options > Optimization for Ad Delivery. Here you can choose the type of advertisement that you want based on your marketing goals.
3. Type Of Audience
The type of audience that you choose affects your ad cost to a LARGE extent. The more relevant your audience is, the lower your total cost. Also, when several marketers are trying to reach out to the same set of audience, your ads become a bit expensive.
You own an online store for women’s ethnic dresses, so you decide to target all women available online.
Is it a good idea? Definitely, not!
When you select the category for all women, you get to display your ads to every female irrespective of their region, age group, clothing choices, and everything else.
This way, you miss out on all those male audiences who might be interested in gifting something to their ladies from your shop. Also, not every woman is interested in buying dresses online, so reaching out to only the people who have shown interest in the category of women’s ethnic dresses will get you more clicks and conversions on your website.
Also, running this campaign for ladies aged 20-30 years will be more expensive as compared to the girls aged 10-17 because more websites are competing to sell their ethnic apparel to the people belonging in the former age group, resulting in increased competition.
Apart from age, the changing trends also lead to a major fluctuation in your Facebook advertising cost along with the following factors:
- Interests and Behavior
- Connections with other apps.
Note: There are as many as 350 attributes for the type of audience that you want to target. I would advise you to try and test the combination of attributes that work best for your best.
4. Ad Placement
The ad placement decides the position on which Facebook will display your ad to its audience. There are the following locations for ad placement:
2. Instant Articles
3. In-stream video
4. Right column
If there is more competition for a particular placement, it becomes more expensive.
You just started with an online gift shop, and you want to get more potential leads on it. You opt for a News feeds ad campaign as it comes with the option for CTA buttons and also reaches a lot of viewers.
Let’s say you gain a lot of customers on your site after the initial campaign, and now you want to retarget them. As every ad placement has different dimensions and you only want to show them the logo of your brand, so you opt for the right column ads. This time, the ads will cost you more (right column ads are more expensive than the News Feed ads). But since you don’t need much ad space or CTA buttons, so you go for this plan.
A few months later, you decide to remarket your brand. This time, you go for a more cost-effective solution- Instant Articles, because you already have a sound reach in the online market.
Note: Facebook recommends its marketers to allow Facebook to place their advertisements on both- Facebook and Instagram, as it can reduce the average cost per result of your ads.
5. Quality of your Content
Facebook is VERY picky when it comes to the quality of content that you are displaying to its audience. Why?
Here’s a thing- Facebook is not a go-to platform for people to buy stuff. It is somewhat synonymous with a person’s online diary where they can share their personal life.
People, basically, get to see things on Facebook regularly and don’t pay attention to something unless it looks extremely relevant and catchy to them. Any regular advertisement that the folks aren’t interested in will escalate its cost in no time. The higher your ad’s relevance, the more audience you get on it, and the lesser is your overall cost for your campaign.
Will an image with a good logo, alluring image, and a catchy headline serve the purpose? No. Definitely, not.
To make a visually appealing ad, you need to fulfill the following criteria:
1. Triggering emotion into a viewer.
2. Causing them to take action.
3. Making them share the content.
4. Grabbing the eyeballs of everyone scrolling down.
Relevance Score of Facebook-
As mentioned earlier, the relevance of your ads matters a lot in determining the price. This score ranges from 1-10. According to Facebook:
Thus, the relevance score of your ads is very crucial in determining its total cost. Higher scores get cheaper bids. So if you intend to reduce your Facebook ads cost, consider improving your relevance score as much as you can.
6. Time of Bidding
You need to consider the time of the year when you are going to release your campaign. When more advertisers are targeting the same audience, the overall cost of the bid increases automatically.
During the peak times of the year, the number of customers increases for some products and services, and they get various options to choose from during this time. It means you have more competition, so you need to pay more.
Some of the key times of the year when Facebook advertising cost is high are:
- End of The Season
- End of the Year
- Season Beginnings
- Sports Events
When you are planning to release your campaigns in or around the above mentioned times of the year, be mentally prepared for the price hikes. Also, when you release your campaigns during the off-seasons, you don’t have many competitors, so the prices of your ads drop drastically.
You can also keep an eye on the type of ads that your competitors are running online using ad intelligence tools like PowerAdSpy, Adplexity, Anstrex, Adespresso, SemRush, etc.
7. Industry and Niche
It’s no brainer that Facebook advertising cost differs A LOT according to your preferred industry and niche of ads. Think about it this way- the cost of advertising your Gucci bag will obviously be higher than the cost of advertising a 30-days yoga sessions package.
When more audiences flock towards the same industry or product, the competition increases, and so is the cost of the advertisement.
Here’s the CPC and Other Benchmarks by Industry for Facebook in 2019
Over To You
Now that was a lengthy discussion on Facebook ads optimization, though we barely touched the surface. Optimizing and utilizing that ad space on Facebook is, indeed, beneficial for any online vendor, irrespective of their niche and goals. But one thing that keeps them thinking and rethinking whether or not to advertise is the Facebook advertising cost.
Finding out an estimate on your ads will be simple once you read all the points mentioned above thoroughly. Is there anything I have missed? Do you have any questions in your mind? Let me know in the comments below!