When it comes to paid advertising, especially on social media, Facebook has made a name for itself as one of the most popular options. This isn’t surprising – with over 2.8 billion monthly users, it’s a great platform for advertisers to market their products to their target audience.
The question, however, is how much will this endeavour cost you? Sadly, there isn’t a clear answer. It depends very much on factors like your goals, your business, your audience, and your available ad spend. This isn’t a one-size-fits-all scenario; it’s more like Cinderella, where you need to find the perfect shoe for you.
That doesn’t mean all hope is lost, though! I run a paid ads agency called Snowball Creations, so I spend a lot of my time determining how much the Facebook ad cost will be. By now, I know the key factors that influence this decision, and I want to share them with you so that you can determine how much Facebook Ads will cost your business specifically.
Understanding Facebook's auction system
Facebook works on an auction-based system, similar to Google Ads. This means that you bid for ad space within the platform. You’re going up against competitors hoping to also get that sweet number one spot. Whether or not you win the bid will depend on things like your ad spend, your bid strategy, and your ad score.
Every time someone does happen to click on your ad, you will pay for that click. How much you pay is luckily determined by you – although the more you are willing to pay, the better the odds of landing that ad spot and getting someone to click on your ad. However, it’s not just your budget that plays a role in this – your ad quality can also determine where your ads get shown and to whom.
If this sounds confusing, I don’t blame you. It is a lot to take in. And while this post and other resources like my YouTube channel should make the process easier, you can also hire a Facebook Ads agency to do the heavy lifting for you! We can make the Facebook ad auction work in your favour.
Key factors influencing Facebook ad costs
As mentioned, the reason why Facebook Ads cost differ so vastly between businesses is that there are so many factors that play a role in what you will need to pay. Some of these include:
- Target audience specificity: the more specific or niche your audience, the higher your costs will be, because of their value to you as an advertiser. On the other hand, a broad audience will have lower costs, but you might not get quality users or many conversions. It’s a game of balance, as with most paid ads.
- Ad objective: do you want to drive website traffic? Increase brand awareness? Generate leads? Get sales? Your ads will depend on what your ultimate goal is, so this will naturally impact your cost as well.
- Ad format: as with your ad objective, your ad format also plays a role in what you will pay. For example, video ads tend to have higher engagement than single-image or text ads, so they will cost you more.
- Competition and industry: since Facebook Ads work on a bidding system, there are external factors that also influence your fees. If you are in a high-competition industry with a lot of demand, this will increase your costs. Similarly, if your industry is something with a high lifetime value, such as the real estate industry, your ad fees will also be higher.
- Ad placement: everyone is vying to be in the ideal Facebook ad placement. In other words, they want a feed post, rather than another type of post. Getting your ad placed in an ideal spot will cost you more.
- Seasonality or special events: Facebook Ads costs aren’t static; they change all the time. And they especially change with specific events like Black Friday or Christmas, which often yield higher costs.
Strategies for making the most of your ad spend
Now that you know which factors influence your budget, it’s time to understand how you can make the most of your ad spend. It doesn’t help to have a massive budget if you aren’t using it effectively. Some of these tips may even help you achieve a lower Facebook advertising cost.
Here’s what you can do:
- Set clear objectives: you need to know what your goal is so that you can spend your budget in ways that align with your goal. This will also help you determine which ads to invest in and which ones to cull.
- Get specific with your audience: a bigger target audience isn’t always better. Sure, it will show your product to more people, but if those people aren’t interested in your product, you’re wasting money. Facebook has sophisticated targeting algorithms that consider your audience’s age, interests, and demographics, to ensure that your ad gets shown to people who have the highest likelihood of clicking on it.
- Always A/B test: by now, my motto should be to always A/B test, since I bring it up every chance I get. Test different audiences, copies, and creatives to see which ad campaign performs the best.
- Improve: so, you’ve A/B tested, and now you have data on which ads perform best. Don’t just leave it at that! Use that data to do further tests. Invest more in ads that work, and get rid of those that don’t. Each round of your ad campaign should improve upon the information you gained from the previous round.
- Adopt a data-driven approach: I get that you think you have all the answers when it comes to your audience – we all do. We think we know what they like. But assumptions kill creativity. Instead, look at data to determine how you should run your ads.
Final words
If you’re considering running Facebook Ads but you’re not sure how much the venture will cost you, I hope that this post gave you some valuable insights. I wish I could spit out a magic number and tell you that’s what you should spend on Facebook Ads, but I can’t. And besides, doing so would limit you.
Sure, there’s a minimum ad spend you need for Facebook Ads, but once your ads start making you money, you can scale them to make you even more money. If you have any questions or you’re ready to take the next step and run Facebook Ads, fill in the form below to get in touch with my ads agency.