The Facebook advertising cost has always been one of the lowest of all advertising channels.
It allowed for a lot of unknown entrepreneurs to be able to scale their businesses without having to sacrifice all their savings.
Here’s a little exercise I crafted using the Business Manager for the Montreal region:
If you put 600$ throughout a month (20$/day) on advertising on Facebook with no interests, between 22 000 and 110 000 people will see the ad DAILY. Of course, those are just estimates so results may vary.
Let’s compare; for television (does anyone still watch TV?), the CPM (how much it costs for 1000 people to see it) is 25$. So let’s say 50 000 people see the ad on television in ONE DAY, it costs you 1250$. That’s 6150% more expensive than social media.
I’m not making this up… isn’t that amazing?
But overall, saying exactly how much Facebook advertising costs is a tricky question. With the unbelievable amount of tweaking and targeting you can do and the different objectives to choose from to perfect your ads, a click can cost 25$ or 6 cents.
A dentist lead that can potentially get you a ROAS (Return On Ad Spend) of $300 is surely worth more than a click to read an article that’s not guaranteed to bring you any revenue. You get the point.
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How much does Facebook advertising cost in 2020?
In order to really define it, let’s dive into different industry benchmarks and analyze specific metrics that impact Facebook advertising costs.
Most current studies show that a click on Facebook costs between $0.50 and $2.00.
Let’s take a close look at Wordstream’s study:
As we can see, the average CPC (Cost-Per-Click) on Facebook is $1.72 across all industries.
But like I said previously, not all clicks are created equal.
A click for automobile services/car buying ($2.24 per click on average) doesn’t weigh the same as a click for apparel ($0.45 per click on average) simply because of the price of the end product.
Once again, these results may vary and should be taken with a grain of salt, but at least now we have a ballpark to compare.
We can now dive deeper into what influences the cost of a Facebook ad and help you define what YOUR Facebook advertising cost would look like.
Factors that influence Facebook advertising cost and how to lower it
1 – The ad objective
Do you want more reach? Impressions? Clicks? Leads? Purchases? ATC (Add-To-Cart)? Each ad objective has different KPIs and is shown to different people based on different outcomes.
Compulsive online shoppers are more likely to be targeted by Purchase Ads than picky people who just add items to their carts.
This is just how Facebook’s algorithm works. It will always select the people that are more likely to answer your call to action. If you want traffic to your website, Facebook will show your ad to people that click faster than their shadow.
If you want leads or purchases, your Facebook ad cost will be more expensive, but Facebook will show your ad to people that are more likely to convert.
In general, there are fewer people that are likely to convert for the second objective than the first one as it demands more commitment and audiences will be smaller.
Let’s see the potential reach for different objectives:
As we can see, the smaller your audience is, the higher Facebook advertising cost will be. This is true almost all the time except in extremely well-timed (Boxing Day, Black Friday) and ultra-targeted campaigns (showing honeymoon destinations to recently engaged couples).
Here, it’s explained by the effort demanded by the desired objective.
Brand Awareness will make sure a lot of people SEE your ad on Facebook, but not necessarily take action upon it. Very low effort for users.
For traffic, Facebook will target users that are more likely to CLICK on your ad and visit your website. Not a huge commitment if your ad is well crafted, but still superior to the first one.
Finally, optimizing for conversions like purchases and leads is ultimately the highest effort you can ask from users, hence the much smaller estimated daily reach.
2 – Your bidding type and the amount you spend
Facebook works like an auction. If Facebook showed all ads “equally” relative to their budget, the social media platform would be an absolute cluster (some might even say there’s already too much advertising ?) and well, their user count would slowly go down to zero.
This is actually an extremely good thing, as you don’t need to be the guy with the most money to win the auction. The advertising spot is instead given to the ads with the most value.
According to Facebook’s guidelines, they aim for two particular objectives with the ads they present:
#1 – Creating value for advertisers by helping them reach and get results from people in their target audiences
#2 – Providing positive, relevant experiences for people using Facebook, Instagram or Audience Network
So instead of simply throwing bags of money at Facebook like Leo…
…take these 3 things into account to lower your Facebook advertising cost:
1- Advertiser bid
The monetary bid you make on your ad. You can either choose a daily budget without a stopping date or a lifetime budget for your campaign that will stop when you desire. None is better than the other, it just depends on your objective and your timeline.
2- Quality & relevance
This one is based on two things. First, the feedback from users that saw interacted with your ads. Do they skip it, like it, watch it for 2 seconds or the worse… report it? Second, Facebook’s own perception and how good they think your ad will be to the public.
3- Estimated action rate
The estimated action rate is calculated by how likely a user is to complete your chosen objective as per Facebook.
The person with the highest score off of these 3 things wins the auction. One interesting thing to note is that Facebook makes sure you won’t spend more than a cent more than your competitor. That means if you set your bid at $10 per day for ad placement and your competitor’s highest bid is $4.88, you’ll pay $4.89.
You can either choose manual or automatic bidding. Automatic bidding will always aim to get the most conversions from your selected objective for the best price. With the manual bidding, you choose what that conversion is worth to you. Whatever you choose, your top priority should always be your ROI.
3 – The audience
Is it wide or narrow? Where do you advertise? What interests are you targeting?
The audience is damn important when it comes to lowering your Facebook advertising cost. The more people relate to your ads, the lower your cost, simple as that.
In most cases, targeting isn’t just about choosing 1 or 2 interests and hope for the best. Let’s take an example.
You sell kitchen knives so logically, you choose cooking as the first interest. Because you’re feeling fancy, you add interest like “kitchen supplies” and you start your ad.
Nope. If you do that, you’re likely to target anyone that has ever searched for a recipe online, anyone that’s ever looking for new plates at IKEA and even non-cooks that only like watching Tasty videos.
If you want to target people that could actually use good knives, put yourself in their shoes and stack up to other interests related to stuff like cooking school, stay-at-home mom/dad, other specific cooking items, chefs, restaurant owners, etc.
Your audience will get smaller and smaller the more you ad interests, but it should convert better.
What I recommend is to test well-researched interests by groups of 5 and split them into ad sets to see which ones convert better.
Also, don’t forget about retargeting in your strategy if you really want to get the conversion.
4 – The quality of your Facebook ad
Needless to say, this is probably the most important part of your ad, followed by your audience. If your creative, copy and targeting aren’t good, don’t expect good results.
The main thing with Facebook is that it’s a social platform first and foremost. People don’t (usually) go there expecting to buy products and services. It’s not search based like Google AdWords, so you have to make the most out of every opportunity.
This starts with your creativity. You have to catch the attention and curiosity of viewers with a well-designed creative because it’s the first thing people see.
Your ads have to be able to spark interest in the blink of an eye (generally to striking visuals, graphic design or great video editing), or to invoke an emotion (generally through good storytelling, showing people smiling/sad/the desired emotion) or to push someone into action (with a well-crafted headline and CTA).
If your ad is not good enough, your Relevance Score will be low, and Facebook will show your ad to fewer and fewer people.
5 – The industry
Is the niche extremely specific of your product/service appeals to a large mass? The price of your product will also play a big factor here. Facebook ads cost will be higher if you’re selling designer clothes instead of affordable basic t-shirts.
You can clearly see how your industry affects your Facebook ads cost in the Wordstream image earlier in this article.
6 – Your ad placement
There’s a lot of ad placements to choose from on Facebook.
Here are all the available Facebook ad placements in 2020:
- Right column
- Instant Articles
- In-stream video
- Sponsored messages
- Rewarded video
- In-stream video
As you can see in this graph by AdsEspresso, Instagram ads are, in general, more expensive than Facebook ads in 2017. This is also what we’ve experienced recently with our clients, so it’s safe to say this still the case today.
This is not an exact science, though.
It really depends on your ad objective, the creation of your ad and the industry you’re targeting. For example, during our PumpUp advertising campaign, our best results came from Instagram story ads with cost per downloads for the app as low as $0.02.
Make sure to test all placements to really know what’s working for you and bring your cost down.
So there you have it, the cost of Facebook ads. As you probably anticipated it, it’s a complicated cost to define because it depends on so many variables. The best thing you can do is to make sure you do your best work concerning the 5 points in this article and you will see your cost go down in a minute.
To summarize, the cost of a click on Facebook hovers between $0.50 and $2.00 depending on the industry. Factors like the ad objective, bidding type and amount spent, audience, ad quality and ad placement also play a big part in defining your cost.