Facebook Advertising Cost — An Up to date Guide

Consumer Acquisition
5 min readNov 18, 2019

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Facebook doesn’t charge flat advertising rates. Instead, advertisers bid to compete for space in target audiences’ feeds. There’s no minimum monthly spend, but the trick is to bid high enough to make ad buys worthwhile. Start by setting a daily budget (you can run campaigns continuously or specify start and end dates). Then bid against other advertisers or allow Facebook to optimize your bid for you.

After 500 impressions, ads are given a Relevance Score based on bid size, ad quality, relevance to the intended audience, and the likelihood of conversion. As an ad’s relevance score climbs due to user responses, the cost to advertise goes down. Advertisers whose ads score highest and beat out competing ads are charged based on all bid amounts received. Not on their own bids.

Facebook Advertising Cost Types

Cost Per Click (CPC)

Advertisers pay for each click an ad receives. This is the default option on Facebook. It’s a good place to start since you’ll pay only when viewers are interested enough to take the desired action. According to , in Q4 2017, the average CPC in the U.S. was $1.10. In , the average was $1.86. Depending on your campaign objective, CPC can fall anywhere within a range of a few cents to a dollar or more.

Cost Per Mille (CPM)

Advertisers pay for 1,000 impressions, or each time an ad appears 1,000 times. If your goal is brand awareness, this is a good option. The average CPM in Q3 2016 was $7.19. If you begin with CPC and you’re seeing strong click-through rates, it may be worth switching to this model. If impressions go up and clicks go down, you can always revert back to CPC.

Cost Per View (CPV)

Cost Per Action (CPA)

With CPA, you’ll pay for conversions, or any action taken on your website after clicking the ad (e.g., following your blog, downloading content, or RSVPing for an event.) CPA tends to be higher because conversions are much rarer than either clicks or impressions, but it also produces more qualified leads.

Cost Per Like (CPL)

Advertisers pay for every Facebook page like that results from a user clicking an ad. This pricing model is one of the lower-cost models available, and it’s ideal for businesses looking to grow their Facebook following so their content can appear in followers’ news feeds at no charge. In Q4 2016, the average cost in the U.S. was $0.20.

Cost Per Mobile App Install (CPI)

What Influences Facebook Ad Costs?

Objective

Creating an ad campaign in Facebook Ads Manager begins with choosing a marketing objective in one of three categories: Awareness, Consideration, and Conversion. Average ad costs largely depend on the likelihood an ad will meet its objective.

Bidding Type and Amount

Facebook offers both manual and automatic bidding. Manual bidding allows you to set a bid cap. But you might not be charged the entire amount if it’s high enough to be competitive. However, if you select automatic bidding, Facebook may spend your entire budgeted amount. Although, you’ll also see better results for your ad spend. Facebook has a $1 minimum daily budget, but the odds favor advertisers willing to pay more for their ads.

Audience

Ad Quality

Poor quality ads (poor visuals, too much text, etc.) not only fail to perform well but also damage brands and degrade the Facebook user experience. If Facebook deems an ad low quality, it will charge more for the ad to discourage its use.

Ad Placement

Advertisers can pay to place ads in 13 different locations including the desktop and/or mobile news feed, desktop right-hand column, Instagram mobile news feed, Messenger, and the Audience Network (outside the platform). Limiting ad placement to a single location can result in a higher average cost. Instagram ads tend to cost more, but they also see higher engagement rates.

Optimizations

Industry

Can You Advertise on Facebook for Free?

You can promote your business at no cost on Facebook by establishing a robust presence and networking through friends and Facebook groups. But, paying to advertise greatly expands your potential reach and allows you to target very specific types of users.

If ROAS is high enough for ads designed to drive engagement, you can recoup the cost of placing ads by way of resulting new business.

ROAS = (# of new customers acquired from campaign x LTV of a new customer) — cost of ad campaign

Advertisers can use the Facebook Pixel tool to track conversions, such as website signups, downloads, and sales. Or they can use the Facebook SDK to measure the success of app ads. Then they can calculate ROAS as a ratio: for example, for every $1 spent on a Facebook ad campaign, $5 worth of revenue was generated.

Do Facebook Video Ads Cost More?

Surprisingly, no-at least not relative to static image ads.

Video Generates More Impressions Than Single-Image Ads

In its collected over the course of 173 BrandEffect studies, which included analysis of data Facebook video ads, Nielsen found that video ads are particularly effective at boosting ad recall, brand awareness, and purchase consideration. Facebook users who watched 10 seconds or less of video accounted for 65–74% of total campaign value. And even those who watched less than three seconds (or not at all) were affected by the ad.

Video, Therefore, Has Lower CPC

All this audience engagement translates to a lower CPC for advertisers. The cost difference can be dramatic. In one advertiser’s video ad vs. image ad experiment, cost per lead for the video ad was $3.75. Which was far lower than for the image ad ($14.22).

How to Lower Your Facebook Ad Cost

Don’t explode your budget in pursuit of campaign goals. Follow these guidelines to keep your ad costs in check.

1. Target a More Specific Audience

2. Employ Bid Caps

Limiting what you’ll spend per click, view, action, etc., will give you greater control over your ad spend. You may sacrifice results, however, by not giving Facebook algorithms the flexibility to determine where and when ads should appear for maximum impact regardless of average cost.

3. Minimize Audience Overlap

Facebook’s Audience Overlap tool will show you where those trouble spots are. Then you can prioritize your audience list by size or campaign goal, or use exclusion targeting, to minimize the impact.

4. Test New Creative

5. Use Segmentation

6. Leverage Video Content

For all the reasons stated above-more interest and engagement, greater impact, and lower-cost-video ads should be a major emphasis of any Facebook ad campaign. You’ll create a more memorable user experience and get much more for your spend if you use a medium that allows for more creativity, breaks through the clutter, and easily distinguishes brands.

How to Scale Facebook Ad Campaigns in a Cost-Efficient Way

Thanks to Facebook advertising, startups with limited budgets have the same opportunity as established players to build awareness and propel growth. Regardless of the growth stage, all Facebook advertisers are focused on taking full advantage of the platform’s capabilities, tools, and potential value while controlling their advertising costs.

After $1 billion in social media ad buys and 300,000 videos created and deployed across Facebook, Instagram, and Google, we’ve fine-tuned the formula for running high-impact campaigns with minimal ad spend. If you’re looking for affordable world-class creative at scale, together with in-depth social advertising expertise, check out some of our case studies and testimonials . Or contact us today .

Originally published at https://www.consumeracquisition.com.

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Consumer Acquisition

Founded in 2013, Consumer Acquisition offers the first end-to-end user acquisition solution with a creative marketplace for ad creation for Google & Facebook.