Facebook Advertising Costs - What Should you Budget to Market There
As the official Facebook for Business page puts it: “some people spend more on coffee each day than they do on their advertising campaign”. It’s not to say they go bankrupt on bean juice. Just that the short answer to how much facebook advertising costs is basically: it depends.
Of course, that’s not a good enough answer for digital marketers. If you’re about to embark on your first campaign on campaign, here’s exactly what you need to know. So first things first:
Why Use Facebook Ads?
1.3 Billion active users. Need we say more? Actually, there is more to add, as 400 new users still sign up to the platform every minute. Based on volume alone, it’d be crazy not to try your hand at advertising on Facebook.
But a large user base doesn’t always mean good conversions. And while it’s not as strong on Facebook as on, say, Instagram, you’re still getting 25% conversion rate in purchases for users who click a link.
It’s also worth noting that Facebook ads aren’t just for Facebook, the social media platform. You can use the Ad manager to publish to Instagram, Messenger, or the Audience Network (an ad network for mobile apps). There’s very few people you couldn’t reach by publishing on all four...
What Has Changed with Facebook Ad Costs?
Facebook became famous for its motto “move fast and break things”. It’s certainly evident with how often they update the advertising platform. Serious marketers should keep a close eye on minor changes, but the big ones tend to make the news.
For instance, in early 2018, the platform announced a new algorithm designed to de-emphasize posts by publishers. This meant less ads pushed to user feeds, and more organic content. This will have strong repercussions on the price of ads in the long term.
It’s also worth noting that if users spend less time on the platform, prices increase. The market shrinks when users scroll for two minutes instead of 20 each day. And usage declined by around 50 million hours per day in the last quarter of 2017.
What Other Factors Affect Facebook Advertising Costs?
Quite a lot of them, it turns out. Factors that could raise or lower your budget include:
The timing of your campaign: whether it’s summer or winter, morning or evening, or even a specific hour. If you’re familiar with Uber’s surge prices, the concept is the same.
The bidding strategy you choose: as seen in the paragraph above, average bids or bid limits could greatly influence the price of each impression.
Your ad placement: feed, right column, stories, marketplace, in stream video… There is a lot to choose from, but not all these billboard spaces are created equal. Instagram feeds and stories, for instance, tend to be a lot pricier.
Ad relevance: not something you control, the platform calculates the score for you. The algorithm looks at engagement clicks, and other factors to decide how much to charge you.
Your target audience: but don't be mistaken. Unless with traditional marketing where you’re competing when selling similar products, on Facebook, you are competing for the users’ attention. So if you market car hire in Melbourne, you’re also fighting for attention against all the other businesses targeting Melbournians.
How Do I Buy and Bid for Ads?
As we’ve seen above, buying ad space on Facebook starts by entering a huge auction. To make it work, you’ll have to decide how much you want to spend. Noteworthy: it doesn’t cost anything else to run ads on Facebook. Signing up is free, even for business pages, and there are no needed membership or service fees.
Now there are two options:
Automatic bid: Facebook chooses the bid amount for you. It will spend all your budget in order to maximize your result. Best for beginner marketers.
Manual bid: you tell Facebook the maximum you want to spend for each result.
Note that for the latter, you shouldn’t bid too low, as your campaign won’t get any exposure. And you shouldn’t worry about bidding too high, because Facebook will only charge you the lowest amount needed to deliver your ads.
What Kind of Price Ranges Am I Looking At?
Now let’s get down to brass tax. The numbers you’ll read below are based on an in-depth AdEspresso study that analyzed more than $300M of ad spend. The global average costs in USD circa 2018 are as follows:
Cost Per Click hovers around $0.35
The cost to get a like is around $0.23
For an app install, you’ll need to fork around $2.74
But - and it’s a big but- the prices vary hugely from country to country. In fact, Australia tops the list of the most expensive countries to buy CPC, reaching costs as high as 0,78 USD as you can see in the graph below.
Similarly, CPC per gender, time or objective also differ. And the biggest surprise here is that targeting link clinks is actually cheaper than impressions. At the end of 2017,
CPC for link clicks averages was $0,44
CPC for impressionss was a whopping $3,71
CPC for lead generations for reach: $3,71
CPC for conversions: $0,66
The costs also vary hugely based on your industry. For instance, in the US, selling an ad for people interested in travel will set you back more than for packaged goods.
This is possibly because more targeted audiences means more valuable consumer data. Facebook makes you pay a premium for groups whose interests are very specific (a particular holiday destination, for example).
Key Takeaways for Facebook Advertising Costs
To sum up everything we’ve learned so far, here are the most important tidbits about Facebook advertising costs and how to reduce them:
Facebook ads work on a bid system. Just because you splash out on your marketing doesn’t mean your ads will get seen.
Prices fluctuate drastically - generally, more targeted campaigns that use Facebook’s user data will cost more.
You can post to Facebook, apps that show ads from the Audience Network, or Instagram. The latter is consistently the most expensive to post to, so make sure you understand how to make the most of it.
Don’t try and cheat the system. If you want users to click on links, choose that as your main goal. It’s actually cheaper than paying per impression.
The quality of your ad has a lot to do with how often it will be seen. And don’t forget to look at the best Facebook ad practices for more info.
Facebook ads are a bit of a minefield, and sometimes overwhelming for beginners. But hopefully this primer will give you the confidence to get started, or at least start experimenting with the platform.