It’s incredibly hard to ignore the power of Facebook advertising in today's Digital Landscape. You simply cannot argue with the ability to put your brand, product or service in front of 2.41 billion monthly active users (as reported by statistia.com here).
One of the first questions you probably have when stepping into the digital marketing world, or researching if you should use an agency is “How much does it cost to advertise on Facebook?”.
A question that is commonly answered with another question (or many), such as: how much do you want to spend; what’s your budget; what’s your objective; do you want to brand awareness on a product or lead generation on a service...ect. And that’s understandable, as there are many things that determine the exact cost of a Facebook advert.
In this article I’ll provide some average costs for industries and explain how Facebook determines those costs.
The one most straightforward answer that you can get, are some average costs for industries, countries and campaign objectives. This can give you a very rough idea of how much it will cost to get a result on an advert when advertising to a certain demographic, such as a country or industry.
Before we jump into it, it’s important to realise that how much your adverts cost essentially boil down to a few things, so keep them in mind when considering Facebook Ads:
- what is the purpose/objective of this advert (awareness, traffic, conversion)
- what audience are you going after (demographic, psychographic)
- quality & relevancy of your advert (ultimately determined by Facebook)
- Facebook’s bidding system
Here are some Facebook advertising benchmarks
It’s important to realise that these are only averages, and when you are working with a professional or agency (see how to pick which is best for you here) then you can achieve much better results.
So what's an objective?
When creating a Facebook advert, you are presented with a variety of objectives to choose from. This will allow the Facebook algorithm to “optimise” how it spends your advertising budget. The idea is to spend it on people who are most likely to take the action (or objective) that you want them to take.
They are split into three main sections; Awareness, Consideration and Conversion.
It’s important to get this selection right, because it will drastically affect how your advert will perform in relation to your pre-defined KPIs. Each section has a unique set of ways you can employ to drive down the cost of your adverts results.
When used together, these can create incredibly powerful results that are both low cost and have massive scale. Typically, you would refer to that as a “funnel”, however funnels can be much more complicated or even much more simple than combining awareness, consideration and conversion adverts together.
Awareness - This is the main objective used to create familiarity with your brand. Letting people know you exist, telling existing customers you are still here and you’re launching a new product, what your brand stands for. Typically, video content performs very well here, as it’s more engaging and stimulating to watch than a static image.
Consideration - These types of ads allow you to serve brand touchpoints and optimise for some form of engagement or interaction with your brand. You can start to warm up your audience before you get them to buy. Take it a step further than familiarisation and recall. Give them something of value, in return for something you value, such as their contact details, engagements, installation of your app.
Conversion - Optimisation for sales. This is where you can see some return on investment very quickly, if you get this right you can drive down your costs and see your ROAS (return on ad spend) sky rocket. Typically this is the advert where you see a carousel of products, or a “buy now”, “shop now” button on the advert. Facebook will pick users on its platform that are most likely to purchase one of your products to serve your advert to.
How does Facebook choose my ad?
Facebook uses a bidding system to determine who it shows your advert to, and when.
As mentioned above there are many things that are taken into account when it comes to the price of your advert. But these are the factors that determine you winning the auction:
- will your advert provide a good experience to our users and make them happy with their choice to use Facebook as a social media platform
- how much are you willing to pay
- is someone likely to take the desired action that the advertiser wants
It’s important to note that Facebook will not always take the highest bid as it’s main deciding factor. They strive to provide value to their users, being a platform that has access to 2+ billion users they can afford that luxury.
When does Facebook charge me?
You are only charged for the number of conversions or the number of impressions your advert has received depending on what you choose when setting up your advert.
So how much does it really cost to advertise on Facebook?
Product market fit, supply, demand, competition, your budget, your ability to make use of the ads manager and other tools that can help you optimise and make customer centric and data driven decisions when it comes to Facebook advertising all influence this figure.
I would always recommend figuring out how much you can spend on the acquisition and retention of new and existing customers before stepping into Facebook advertising. Once you have that figured out you can do some research on industry averages and start from there. If you can figure out how to beat that average, and you’re getting a positive ROI then that’s great news.
Furthermore, consulting with an expert or agency can be invaluable when it comes to saving time & money in the field of Facebook Ads.