How Much Does Facebook Advertising Cost in 2024? (2024)

What determines Facebook advertising costs?

Likepay-per-click (PPC) advertisingcosts onGoogle Ads, a variety of factors impact your Facebook advertising costs. If you want to build a realistic budget for your business, then you need to understand how these factors influence the cost of Facebook ads.

The eight factors that determine how much Facebook ads cost include:

1. Audience
2. Ad Budget
3. Ad Bid
4. Ad Objective
5. Ad Placement
6. Ad Quality
7. Season
8. Industry

Learn more about each of these factors now:

1. Audience

An in-depth study by AdEspresso on Facebook advertising costs revealed that your target audience has a significant impact on the prices of your Facebook ads. Whether you’re focusing on a specific age, gender, or interest, you can expect a shift in your ad expenses.

For example, if your ad campaign targets women, your CPC may increase by $0.55. That’s $0.15 more than if your ad campaign targeted men. When you look at age, ads that target individuals 55-65 years or older tend to have substantially higher costs than campaigns focusing on users 25-34 years old.

That’s because Facebook only has26 million usersbetween the ages of 55 and 64. While that may seem like a high number, it doesn’t come close to the more than 58 million people (between the ages of 25 and 34) that use Facebook.

When you advertise on Facebook, you can alsotarget specific interests or audience attributes, including:

• Outdoor recreation
• Meditation
• Philanthropy
• College football
• Commuters
• And more

This useful feature can impact how much it costs your business to advertise on Facebook, as you may target high-value attributes or broad interests. For example, if you target frequent travelers, versus frequent international travelers, you have a broad audience that may incur additional expenses.

While high-value attributes can help you reach your specific market, broad interests can inflate your target audience with low-value users. Since these users often click on your ads, but don’t act on your calls-to-action (CTAs), targeting them can result in a low-performing campaign.

Focus your campaign on the people that matter and offer the most value to your business. You don’t want to pay for clicks or views that offer zero value when it comes to your long-term goals, like driving a sale or generating a lead.

2. Ad budget

When you launch an ad campaign on Facebook, you set an advertising budget.

No matter your budget, whether it’s $200 or $800 per month, it will impact how much Facebook advertising costs your business. If you set a budget of $200, that affects your ad bids, ad performance, and the overall results of your social media advertising campaign.

As an example, if your company launches an ad campaign with a $100 monthly budget, you may set a maximum bid of $1 per click. As theaverage CPC for Facebook adsis $0.94, it’s easy to see that your bid isn’t competitive and will probably result in a low number of impressions and clicks.

Not to mention, social media strategists recommend a daily budget of at least $5 for businesses. If you’re spending $5 a day on your campaign, however, you’ll use up your $100 budget by day 20. With this amount of funding, you don’t have the money to even run your ad campaign for the month.

While a large ad spend provides your business with additional flexibility, you can still make a small budget work for your company. Your company decision-makers need to realize, however, that a low ad budget provides fewer conversions because of its performance limitations.

3. Ad bid

Your ad bid also impacts the cost of Facebook ads. Facebook offers a few bidding strategies, including:

• Lowest cost bid strategy: This option, also known as automatic bidding, helps your business achieve the lowest possible cost per click or action. It also aims to make efficient use of your budget, which is why companies tend to start with this strategy.

• Target cost bid strategy: This option, also known as manual bidding, works to reach your desired cost per click or action. You can only use this strategy for app install, conversion, lead generation, or product catalog sale campaigns.

Depending on your bid strategy, as well as bid amount, you may have higher or lower Facebook advertising costs. In most cases, manual bidding comes with higher advertising costs, while automatic bidding tends to make the most of your budget.

Before you decide on a bidding strategy, it’s vital that you understandhow the ad auction workson Facebook. When you understand the algorithm behind the company’s advertising services, you can build a better ad strategy and advertising budget.

In an ad auction, Facebook rates each bidder (and their ad) withthese three factors:

• Bid:A bid is how much you’re willing to pay for a user to interact with your ad. For example, you may bid $1.50 for every click. According to Facebook, your bid isone of the most powerful toolsfor improving your ad’s performance.

• Estimated action rates:Your estimated action rates demonstrates the likelihood of users to interact with your ads, like by clicking on your ad or downloading your app. For a competitive ad, you need a high estimated action rate, which means creating a relevant ad for your audience.

• Ad quality and relevance:The positive and negative interactions of users with your ad determine its quality and relevance. A high ad quality and relevance score can improve the success of your ad in auctions.

If your ad comes away with the highest total value (based on the above three factors), you win the auction. In response, Facebook shows your ad, rather than a competitor’s, to the person in your target audience.

While an aggressive bid can increase your total value, it also raises your Facebook advertising costs. That’s why your business wants to focus on creating a relevant, high-quality ad first. Then, you can assess your bidding strategy and bid investment.

4. Ad objective

When you create an ad on Facebook, you need to choose one of the following main ad objectives:

Once you pick your main objective, you need to select a specific goal:

• Awareness
• Consideration
• Conversions

In most cases, more valuable ad goals, like a store visit or product purchase, lead to higher ad costs. That’s because these actions, like a product purchase, have immediate value for businesses. A product catalog sale, for example, generates immediate revenue for your company.

As you build your ad campaign, however, it’s important to remember the value of brand awareness and consideration. When you reach and connect with users in the early stages of the buying funnel, you can grow their interest in your brand and move them further down the sales funnel, resulting in a purchase.

Even though this action occurs later, it offers your business real and tangible value. It can also decrease your Facebook advertising costs, as most companies pay less for awareness- and consideration-related goals than for conversion-related goals.

The only difference is the turnaround time for a conversion. With a conversation-related goal, you connect immediately with a user looking to buy. In comparison, users in the awareness and consideration stage need a little more time before converting.

5. Ad placement

Ad placement also shapes the cost of Facebook ads. With Facebook, your ads can appear in six spots:

• Instagram
• Instagram Stories
• Facebook desktop newsfeed
• Facebook right column
• Facebook Messenger
• Audience Network

When it comes to social media advertising, Facebook offers a competitive advantage with its ownership of Instagram. Via Facebook, you can create Facebook and Instagram ads with ease, which saves your team time.

Instagram

Instagram maintains the highest CPC when it comes to Facebook advertising costs. On average, companies spend an additional$0.80 per clickto appear on Instagram. For Instagram Stories, the CPC increase is around $0.78.

Facebook

The average CPC for ads on Facebook is around $0.30 less than Instagram. It offers a versatile platform for advertising your business. Your ads can appear not only on Facebook, but also Facebook Messenger, a popular messaging app for the social media network.

Audience Network

TheAudience Network, which allows your ads to appear on websites and mobile apps, maintains an even lower CPC than Facebook and Instagram. In most cases, companies spend an additional $0.20 (based on the average advertising cost for Facebook) per click.

While you can modify where your Facebook ad appears, Facebook recommendsAutomatic Placements. This tool allows the social media platform’s delivery system to make the most of your ad spend byplacing your advertisem*ntson platforms that offer the most potential for results.

If you want to reduce your Facebook advertising costs, however, you can turn off this feature. When you turn Automatic Placements off, you enable your team to select where you want your ad to appear, whether on Facebook, Instagram, or the Audience Network.

6. Ad quality

The quality and relevance of your ads (as rated by Facebook) also affects how much Facebook advertising costs your business. If you create ads with a highrelevance and engagement score, you will see lower ad costs.

Hootsuitedemonstrated the powerof an ad’s quality or relevance score in a recent study. The company created two versions of the same ad: one with a relevance and engagement score of 2.9 and another with a relevance and engagement score of 8.

The low-scoring ad had an average CPC of $0.14, while the high-scoring ad’s CPC was $0.03.

When it comes to your relevance and engagement score, your ads can receive a rating between 1 and 10. Ten is the best possible score, while one is the worst possible score. Facebook assigns a relevance and engagement score based on positive and negative ad feedback.

If you want to make the most of your ad spend on Facebook, it’s critical for your team to create ads with high relevance and engagement scores. For the best results, monitor your relevance and engagement score on a routine basis.

Access your relevance and engagement scoreswith the following steps:

• Go toAds Manager
• Select the ad you want to view
• Choose theColumnsdropdown menu
• ClickCustomize Columns
• SelectRelevance Score
• HitApply
• View yourRelevance and Engagement Score

Keep in mind that Facebookrequires around 500 ad impressionsor views before assigning a score.

As long as your ad is live, Facebook will continue to monitor user interactions, determining if it’s relevant. That’s why you need to check-in and adjust your ad to feedback regularly. With this proactive approach, you can improve the performance, results, and costs of your Facebook advertising campaign.

7. Season

The time of year can also impact how much Facebook ads are.

In peak shopping seasons, businesses tend to spend more on advertising. The increased demand for ad space results in a competitive marketplace, which can lead to aggressive bids and bigger campaign budgets that inflate the cost of advertising on Facebook.

A few of the most expensive days to advertise on Facebook include:

• Thanksgiving
• Black Friday
• Cyber Monday
• Christmas
• Boxing Day
• New Year’s Eve
• New Year’s Day

While seasonal factors can increase your Facebook ad costs, your business probably wants to take advantage of increased demand from consumers. In response, you may increase your budget for those high-demand months or audit your ad strategy to improve the quality of your ads.

8. Industry

While the average cost of Facebook ads is $0.94, you can gain more insight into your expected Facebook advertising costs by looking at the average price of Facebook ads for your industry. This data offers a more accurate estimate, which can help your team build yoursocial media marketing budget.

Find out how much Facebook ads cost in your industry below:

Depending on your industry, Facebook advertising can offer a cost-effective option for building brand awareness, generating leads, driving conversions, and more. Even if you’re in a competitive market, like consumer services, you can benefit from a social media strategy.

Competitors in your industry advertise on the social media platform because they get results from it, whether it’s more followers on their social media page, purchases from their online store, or calls to their physical location.

It’s also helpful to mention that these prices for Facebook advertising are averages.

That’s why you should only use these numbers as benchmarks for your business. When you adopt this perspective, your team and company’s decision makers can approach your campaign with realistic expectations.

Are Facebook advertising costs worth the price?

For the majority of companies, the answer is yes. In fact, 81% of businesses say they are happy with the ROI they receive from Facebook ads.

For companies that can generate a return on investment from Facebook ads (which can take trial and error), Facebook advertising is worth the price.

Tools that can improve your ad campaign targeting, likeAdTechFX via MarketingCloudFX, can help your business improve its paid advertising performance by reaching the audience members closest to your ideal client.

Get better results from your Facebook ads

Looking to improve your ad campaign performance, as well as decrease your Facebook advertising costs?

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