“How much will it cost?” is usually the first question a business owner asks when they’re considering a new advertising route. If you’re considering advertising on Facebook, you’re probably wondering what it’ll cost. Unfortunately, the answer that most people, articles, and online resources will give you is “well, it depends.” Today, we’re here to provide you with a better answer than that.
So How Much Does it Cost?
Let’s talk about units. The amount you’re spending on advertising can be measured by CPC (cost per click) or CPM (cost per thousand impressions). The average Facebook CPC is only $0.27. The average CPM is $7.19. This is incredibly cost-effective. The average Google Ads cost per click is around $2. However, we typically see CPCs that are much higher than that.
But… it isn’t that simple.
Everyone who told you “it depends” was telling you the truth. The costs of Facebook advertising do depend on. Here are some of the factors:
- Your Company’s Industry
- Budget and Bid Type
- Quality of Ad
- Ad Goals
Types of Ad Goals and What They Cost
Facebook offers multiple different ad goals. These goals have various key performance indicators and are shown to the people most likely to help you reach your goal. That means your ad could be shown to people who often click links, people who frequently call numbers they see in ads or people who frequently purchase from ads. The audience your ads are shown to can drastically alter the cost.
Types of Ad Objectives
- Brand awareness
- Local awareness
- App Installs
- Video Views
- Lead Generation
- Product Catalog Sales
- Store Visits
The Facebook Ad Auction
Unlike Google Ads, ad placement doesn’t go to the highest bidder. Instead, the placement goes to the ad with the highest value. So how is ad value calculated? It’s based on three things: your advertising bid, your ad quality and relevance, and the estimated action rates. Estimated action rates are how likely Facebook thinks a person is to interact with your ad. Your ad will be placed in an auction, and the ad with the highest score across the three categories will get the ad placement.
How Your Audience Affects Costs
Your audience directly correlates to how much it costs to show your ads. A problem people often run into is too broad of an audience. For example, suppose you own a restaurant and display ads to people interested in restaurants. In that case, you aren’t just showing ads to people who like restaurants. Instead, you’re showing ads to anyone who has ever been interested in a restaurant, people who look at pictures of their friends at restaurants, and people who watch shows like “Kitchen Nightmares.” This leaves you spending money to show ads to people with almost no chance of visiting your business.
Facebook and Ad Quality
Facebook is a very picky advertising platform. The Facebook platform is somewhat like an online diary. People go, catch up with friends, and mindlessly browse. This means your ad copy has to fit the mood of the platform. Your ad needs to be something people will enjoy seeing while they scroll. It needs to be visually appealing, pique user interest, or jolt someone into action.
Your Industry’s Impact on Cost
The industry you serve affects ad costs. In the same way, lawyers have some of the highest prices per click on Google Ads. Facebook has industries that charge more. The most expensive sectors tend to be technology, professional services, and E-commerce. The least costly are entertainment, food and beverage, and automotive.
How Do I Lower my Ad Costs?
The best way to lower your ad costs is to hire a Facebook ad professional. If you’re new to Facebook ads, you will spend a lot of time and money on ads that aren’t optimized while you learn the best strategies. However, by partnering with a professional Facebook advertising team like Contractor Advertising, you’ll be saving yourself time and money with Facebook ads.