In today’s world, digital advertising has become a very important aspect for every business and brand. The widespread use of social media means that they are one of the best places for any business to market themselves. Facebook remains one of the most popular social media platforms. And it’s obvious that any business would consider advertising on it. Which raises questions about Facebook advertising costs.
If you’ve just started your business and are considering advertising on Facebook, you no doubt have the question “How much does Facebook advertising costs?” on your mind.
The answer is simple: It depends.
That might sound like a frustrating, vague answer. We understand. However, you don’t need to worry. In this post, we will try to break the answer down to give you a better understanding into Facebook advertising costs.
The reason why the answer to the question of Facebook advertising costs is usually “It depends” is because there are many factors that influence the cost. That much is obvious, I’m sure.
However, it doesn’t still mean that we can’t find a baseline to start from.
Hootsuite has a detailed post about Facebook advertising cost that gives us all the information we need. We can measure the average Facebook advertising costs in two ways. The first is by measuring the cost per click (CPC) – which will cost you about $0.27 on average. The second is to measure by using cost per thousand impressions (CPM) and for this measure, it averages at around $7.19.
These are the average figures. What they are not is the amount you will actually be paying. At the end of the day, like we said earlier, a number of different factors will influence the exact amount that you will need to pay.
There are various different factors that will all play a part in how much advertising on Facebook will cost for you. The main factors are:
Below, we will take a proper look into each one of these factors and how they influence your ultimate Facebook advertising costs.
When you’re advertising on Facebook, the platform allows you to to choose different objectives/goals for your ad campaign.
Each goal, and subsequently, each type of add has its own different key performance indicators (KPI) and will be shown to different people. It all depends on the specific outcome you’re hoping for for your brand.
The objective you choose for your brand will drastically affect your cost.
In Facebook, the types of ad objectives available are:
Awareness: Brands that want to build awareness for themselves will need to choose from this category and Facebook will work to build awareness and interest for your product/service.
Consideration: This for companies that want to their audience to engage with their brand and their website. Here, Facebook will aim to increase traffic for your website, get more downloads for your apps and generate leads.
Conversions: Conversion ads are used when you’re trying to up your sales. With this goal, Facebook will push people to carry out specific actions or purchase the products and services you are offering.
Depending on what you are looking for your brand, and what it the main reason you are launching an advertising campaign, you will need to choose from one of the many different options Facebook allows for advertising on it’s platform.
Look at this comparison:
Each of these different campaigns have the same lifetime budget, as you can see. But the Estimated Daily Reach is different for each one different goal. Brand Awareness gets the highest and Conversions gets the lowest – this is because it’s easier to show an ad to someone and make them aware of your brand than it is to have them go to your website or your online store and make a purchase.
So, keep your overall goals in mind when you’re considering how much you want to spend on Facebook advertising. The costs will inevitably be different depending on what you want.
The second factor that will influence how much Facebook advertising will cost you is the auction and your bid. Facebook has an ad auction system and unlike real auctions, in the Facebook advertising platform, the advertising spot won’t automatically go to the highest bidder. Instead, it will all depend on ad value. This might sound a bit confusing, but we can try to clear it up.
According to Facebook themselves, they aim for two things when they show ads:
In Facebook’s own words, the best way for them to do this is to...
“...hold an auction in which both interests are represented. That way, advertisers are reaching people receptive to their ads and users are seeing something they’re interested in. This is different than a traditional auction because the winner isn’t the ad with the highest monetary bid, but the ad that creates the most overall value.”
So, what goes into creating ‘value’?
During the ad auction part of the process, your ad will be compared with other similar ads. The winner will be advertiser whose ad combines all three of these and provides value.
Facebook provides two ways for you to bid on your ads: Automatic and Manual.
If you choose the automatic bidding option, Facebook will set your bid for you to get the most actions for the best price. If you pick Manual bidding, however, you will input how much you decide a result is worth to you.
Facebook encourages you to bid with ROI in mind instead of the lowest cost. By bidding true to what an action is worth to you and your brand, you stand to gain more. Obviously, the higher your bid, the more access you will have to people who will ultimately increase your brand’s overall success.
The audience who will receive your ads on their Facebook feed are obviously very important. So, it goes without saying that the audience you pick to have your ads shown to will have an important role to play in determining your ultimate Facebook advertising costs.
The rule of thumb here is:
The more specific and relevant the audience is, the lower your cost will be.
For example, say you are a digital marketing company and you want to run an ad about your SEO services. You choose people who are interested in/looking for digital marketing services as your audience.
While this may sound like a good idea at first glance, you need to realize that “interested in/looking for digital marketing services” is potentially a massive number of people. It will include everyone who might have shown an interest in the topic. Anyone who has visited a digital marketing website/Facebook page, everyone who has looked into creating a website, anyone who owns a business, even.
You can narrow your audience down and select the audience that are looking for the exact service you’re providing. The good news is that there are over 300 audience attributes Facebook provides for you to choose from and they can be mixed and matched. The bad news? It will take a while before you can master selecting the right attributes to target the exact audience you want.
Along with the audience you pick, the quality of your ad on Facebook is one of the things you will need to fine tune to reduce your Facebook advertising costs.
Facebook is a thoroughly personal social media platform, where users can customize a number of things so that their feed only displays information that is relevant to them and they can follow the pages and the people they want. This means that Facebook users will not much like low-effort ads appearing on their feed and they are more likely to scroll past it than actually pay any attention to it.
Because of this, you need to create ads that visually appealing and interesting. In addition, they must be able to...
Simple ads with your logo, a headline and some flavor text will do you no good. In fact, they might actually end up harming your brand.
Facebook has an ad relevance score that it takes into account so that it can provide it’s users with relevant content. It’s rated from 1-10 and the higher your relevance score is, the less it will cost to be delivered.
“Relevance score is calculated based on the positive and negative feedback we expect an ad to receive from its target audience. The more positive interactions we expect an ad to receive, the higher the ad’s relevance score will be. (Positive indicators vary depending on the ad’s objective, but may include video views, conversions, etc.) The more times we expect people to hide or report an ad, the lower its score will be.
Ads receive a relevance score between 1 and 10, with 10 being the highest. The score is updated as people interact and provide feedback on the ad. Ads with guaranteed delivery — like those bought through reach and frequency — are not impacted by relevance score. Relevance score has a smaller impact on cost and delivery in brand awareness campaigns, since those ads are optimized for reaching people, rather than driving a specific action like installs.”
One of the best ways for you to cut down your Facebook advertising costs is to increase your relevance score.
I’m sure we don’t need to tell you this, but we will. It’s obvious that a business selling a luxury cars and a business that is providing a house cleaning service will have different costs per results. As such, the industry that you’re working in and the particular product that you’re selling will influence the cost of your ad in a significant way.
Make sure you keep both your industry and the product or service you’re providing when you’re thinking about your Facebook advertising costs.
Sure, you can of course tackle doing your Facebook advertising all by yourself. However, you will need some trial and error and time before you will ultimately perfect advertising on Facebook’s advertising platform.
However, you don’t need to do it by yourself. You can get yourself a marketing service to do the hard part of the job for you for a relatively low cost and provide you a greater overall return on your investment. If you don’t want to take unnecessary risks with Facebook’s complicated advertising platform and don’t want to waste precious time trying to figure out all the nuances of the process, you can always contact us at RankToday.
We will ensure that you get the lowest Facebook advertising costs and the greatest return on investment.
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