Everything You Need to Know About Facebook Ads Cost.

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Let’s talk about what Facebook Ads Cost. But first, a quick fact. Did you know that Facebook has 2.8 billion monthly active users?

Of those monthly users, 1.84 billion use this social media platform daily. To put it simply, your target audience is using Facebook and if you’re not seizing the opportunity to get in front of these potential customers on Facebook, you are missing out.

When you combine Facebook’s laser-sharp targeting capabilities, cost-effectiveness, and re-targeting features, you have a recipe for marketing success.

Now that you know what an advertising goldmine this platform is, you might be wondering how much Facebook ads cost.

Well, that is a loaded question with many determining factors.

Trying to navigate advertising on Facebook and the costs associated with it can feel intimidating and overwhelming.

Luckily, we are here to help you understand what Facebook ads cost, and how to get the most bang for your buck.

The Facebook Ad Auction

To determine which ads are shown to which people, Facebook created an ad auction. When you create an ad, Facebook uses the information you provided in the ad creation process to place your ad in front of the people who are most likely to interact with it.

When creating your Facebook advertisements, you can set parameters that best fit your business’s needs, including:

  • Budget. Facebook provides you the opportunity to set a budget of your choosing. Your budget can be the maximum amount you’re willing to spend daily or throughout the life of your campaign. You also set a bid, which is the maximum amount you want to spend when someone sees your ad or takes your preferred action (click, impression, app install, etc.). You have the option to spend anywhere from a few dollars a day to tens of thousands.

     

  • Audience. Here, you’ll choose who you want to see your ad. Hone in on your ideal audience by selecting preferences such as gender, age, location, interests, previous actions, and device type. Carefully narrowing in on an audience for your product or service will increase the likelihood of people seeing and engaging with your ads.

     

  • Creative. Lastly, you decide what you’d like your ad to look like. Running ads without five-star creative is as useful as a screen door on a submarine. When your ad contains captivating, creative graphics and videos, you’re far more likely to be noticed. On the other hand, when your ads contain boring, mundane creatives, they’re more likely to get lost in the endless scroll and advertising “noise”.

After carefully selecting your ad’s budget, audience, and creative, your ad is ready to head into the ad auction. Here, Facebook’s world-class learning technologies will thoughtfully determine who will see your ad.

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What Factors Determine a Higher or Lower ad Cost?

Even if you were to spend the same amount of money on two different campaigns, you may notice significantly different results. Several factors contribute to this variation in outcomes. For example, AdCostly conducted a large study that shows the nuances of advertising on Facebook and what actually contributes to the differences in ad cost.

facebook ads cost - no limit creatives

*Recreated graphic. Original info provided by AdCostly

As you can see in the graph above, the average cost per click (CPC) for a “website click” or “website conversion” campaign differs significantly depending on which country you are advertising in. As of April 2021, the worldwide average CPC on Facebook is $0.97.

However, it can cost as little as $0.01 per click in Mexico and Pakistan or up to $1.60 per click in Korea.

The top 5 variables that contribute to Facebook ads cost are:

1. Target Audience and Industry.

Who and how many people you’re targeting can greatly influence your ad costs. If your strategy is to target all women over the age of 18 who live in Los Angeles, you’re essentially shooting in the dark. When you narrow down your audience using interests and advanced targeting options, you are more likely to get a higher number of conversions and you’ll experience lower ad costs. In addition, you’ll find that more competitive and concentrated industries will have higher ad costs. This is simply because more ads are competing against each other in the auction.

2. Time of Year

Supply and demand affect Facebook ad costs. If you’re advertising during a busier time of the year, you may experience higher costs than other times. A good rule of thumb is to ramp up your budget during major holidays throughout the year. Because of sales, discounts, and increased purchasing, you’ll be working with major competition around the following holidays:

    1. Black Friday/Cyber Monday
    2. Christmas
    3. Mother’s Day
    4. Labor Day/Back to school sales
    5. Valentine’s Day
    6. 4th quarter of the year

3. Ad Placement

Where your ad appears on Facebook influences the cost. Don’t bail on an ad placement solely because it has the highest cost because it may also generate the most clicks and engagement. Test your ad placement to see what works best with your audience. Using the Automatic Placements option allows Facebook to choose the placements that your ad is expected to achieve the best results. You also have the choice to hand-select from the following placements:

    1. Only on mobile devices, desktop computers, or both
    2. On Facebook: newsfeeds, right-hand column, Instant Articles, integrated videos
    3. On Instagram: newsfeeds, in Stories
    4. Within Facebook’s partner audience networks

4. Ad Quality

The quality and relevance diagnostics of your ads also affect your ad costs. The better quality of your campaigns, the lower costs and better results you’ll see while advertising on Facebook. To see how your ads are ranking for quality and relevance, visit the Facebook Ads Manager.

5. Types and Objectives

The type of ads such as static, carousel, video, or Instant Experience will affect the cost of your campaigns. In addition, the objective, or the result you’d like to achieve from your ad, contribute to ad costs. Some examples of Facebook’s ad objective options include website traffic, clicks, app installs, lead generation, and more.

Average Cost of Facebook Ads
by Industry

According to Facebook, the average cost-per-click for Facebook ads across all industries is $1.72. However, this average is skewed due to the large variety of ad costs across different industries. Wordstream released a report of the average cost of Facebook ads by industry broken down by Facebook’s different metrics. Here’s what they found:

 

Industry

Average Click-through Rate (CTR)

Average Cost-per-Click (CPC)

Average Conversion Rate (CR)

Average Cost-per-Action (CPA)

Beauty and Fitness

1.02%

$1.85

11.65%

$38.33

Business and Industrial

0.89%

$2.48

10.65%

$23.80

Finance

0.58%

$3.89

8.98%

$41.28

Food and Drink

1.20%

$0.42

3.98%

$12.91

Hobbies and Leisure

0.93%

$0.68

2.91%

$21.99

Home and Garden

0.71%

$2.78

7.02%

$44.23

Internet and Telecom

0.68%

$3.07

10.03%

$29.95

Jobs and Education

0.55%

$2.11

12.82%

$18.36

News

1.05%

$1.11

2.15%

$56.89

People and Society

0.85%

$2.01

5.62%

$33.21

Pets and Animals

1.68%

$0.61

3.27%

$15.29

Real Estate

0.98%

$1.81

10.67%

$16.52

Science

0.45%

$1.33

11.04%

$12.67

Overall Average

0.89%

$1.86

7.75%

$28.11

Improve Your Facebook Ads Costs

Don’t fret if you are coming in above average on Facebook ad costs in your industry. There are adjustments and improvements that you can make to decrease your ad costs and increase your results. Here are 5 actionable items you can implement right now to lower your advertising costs:

 

  1. Narrow in your audience. As we mentioned earlier, if you are targeting a wide-open audience, you are likely taking a shot in the dark. By narrowing in who you’re targeting, you are reducing the amount of competition that is trying to reach the same group and increasing the relevancy of your audience. Less competition means lower advertising costs. However, be aware that if you go TOO narrow, Facebook will charge you a premium for reaching that audience because they know that they are likely to be very engaged. Try to reach a happy middle ground.
     
  2. Use bid caps. Implement rules and bid caps to avoid spending more than you’re comfortable with on an ad level. For example, you can set up a rule saying you don’t want a specific ad to spend more than X amount per day.

  3. Don’t compete with yourself! When you are running multiple campaigns to the same audience, your ads are going into the ad auction together. Meaning, your ads are possibly competing against each other and increasing the cost of your ads. Use Facebook’s Audience Overlap Tool to check to see if you’re doubling up in the ad auction.

  4. Test and refresh creatives. We have found that simply switching up your ad’s image or video can drastically affect overall performance. Testing different creatives and refreshing creatives frequently can avoid ad fatigue and can recapture the attention of your audience.

  5. Utilize a Facebook Pixel. Facebook Pixels not only identify your website visitors right down to their Facebook Page but also collect a plethora of data on your visitors. How much money do they make? Do they have children? Do they travel frequently? Are they homeowners? What is a purchase they’ve made recently? You can use this wealth of data and information to re-target your visitors with copy and creative perfectly curated for them.

Ready to Get Started?

Whether you are just getting started with Facebook advertising or you’re a vetted Facebook marketer, it is always important to understand the costs associated. You should always know what your budget is going toward and how you can stretch your advertising dollar even further. Using these tips and tricks, you are sure to get the best results for your budget.


Now that you know all about Facebook ads costs, it is time to get started! The first step is obtaining top-notch creatives for your ads. We can help! At No Limit Creatives, we provide all of the custom graphic and video designs you need for one low monthly rate. It’s time to take your agency, e-commerce brand, or small business to a whole new level. Click here to get started.

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