Advertising on Facebook has become one of the most-used strategies in the marketer’s handbook today. With Facebook being the leading platform on social media, it’s easy to see why a business would employ a Facebook ads company and choose to include Facebook advertising in their marketing strategy. But how much does it cost to advertise on Facebook? And is the cost of Facebook ads worth it for your business?
As you scour the internet for answers, you’ll find that the question “how much do Facebook ads cost?” is a loaded one – and the answer can be tricky. A Facebook ads expert can only give you a recommended budget, but not the true cost of running the ads. That is because Facebook ads pricing differs based on a number of factors – and because of the Facebook ad auction feature.
Today, we’ll answer the question of how much are Facebook ads and discuss what factors dictate how much Facebook ads cost. We’ll also take a quick look at the Facebook for Business Suite and how you can use the feature to set up ads for your business.
Why Should Businesses Invest in Facebook Advertising?
Facebook still holds the largest number of users among all social platforms. The social media giant reported 1.82 billion daily active users and 2.74 billion monthly active users in October 2020, which corresponds to a 12 percent increase year over year.
As the leader of the pack, Facebook offers distinct advantages for any Facebook advertising company or Facebook ads expert:
1. Its massive population ensures that you’ll find your target audience on the platform.
2. It has low budget thresholds for Facebook advertising cost in terms of cost-per-click (Facebook ads CPC) and cost-per-1000-impressions (Facebook ads CPM), among other factors, that make it more cost-effective for small businesses as well as large enterprises to scale.
3. It offers superior targeting options, which allows any Facebook advertising company or Facebook advertising expert to get granular with who they want to see their ads.
4. It owns Instagram, making it easier for a Facebook ads company to reach younger audiences through cross-channel marketing using the Facebook for Business platform.
Advertising only works if you get in front of your audience. With Facebook being the undisputed leader in social media, it’s easy to say that your audience, no matter how niche, is on Facebook.
The Basics of Facebook Advertising
Aside from its vast user base, Facebook for Business also has unique proprietary tracking capabilities that make it an ideal platform for social advertising. Let’s take a look at these capabilities as we give a brief introduction to the Facebook Business Suite.
Introduction to Facebook for Business and Ads Manager
The Facebook Business Suite contains important tools that allow any business, Facebook advertising expert, Facebook advertising agency or anyone offering Facebook advertising services to manage their presence or their clients on Facebook and Instagram. It contains tools that allow you to view page activity, manage responses in your inbox and create and schedule posts for your Facebook and Instagram accounts.
Inside the Facebook Business Suite lies an important tool that manages your Facebook ads: the aptly named Facebook Ads Manager. Through the Ads Manager tool, you can:
• Create and set up Facebook and Instagram ad campaigns
• Create and manage ads and ad sets
• Manage your Facebook ads budget by minimizing Facebook ads CPC and Facebook ads CPM
• Optimize Facebook ads and ad campaigns through better targeting
• A/B test Facebook ad campaigns
• View insights on campaign performance
Types of Facebook Ads
From inside the Facebook Ads Manager app, you can build different types of ads depending on your campaign objectives. Your choices include:
• Image ads
• Video ads
• Video poll
• Instant experience
• Slideshow ads
• Lead ads
• Dynamic ads
• Messenger ads
• Stories ads
• Playable ads
How to Access Facebook Ads Manager
To access Facebook Ads Manager, visit the panel on the left side of your computer screen and click on Ad Center. On mobile, tap on the burger menu on the top right section of the Facebook App, tap on “Also from Facebook” and then on “Ads Manager.”
Alternatively, you can also download the Facebook Ads Manager app on the Google Play Store and Apple App Store.
How Much Do Facebook Ads Cost?
Figures for average costs exist online and can be used as a benchmark for Facebook ads pricing. According to WordStream, the average Facebook ads CPC across all industries is $1.72 while the average Facebook ads CPM is $9.8 according to growth marketing consultant Karola Karlson.
But how much are Facebook ads, really? As any Facebook ads expert will tell you, the true cost of Facebook ads may differ from the average cost. It is made more complicated by the fact that Facebook uses an auction system for ad placement. Within the Facebook ad auction system, a Facebook advertising company can place their bids and compete with another Facebook ads company to have their ads shown to their target audience.
But merely placing a bid won’t guarantee ad performance. Facebook also looks at the relevance of your ad to determine the best ad to display on a user’s timeline. Ad relevance here refers to ad quality and estimated action rate, which is the probability of getting the desired outcome when the ad is shown.
Several other factors affect the performance of Facebook ads on its Facebook ad auction system, which also impacts Facebook ads pricing. Make sure you consider these factors when setting your Facebook ads budget:
• Ad quality
• Ad placement
Everything boils down to extreme competition. Just like supply and demand, as more advertisers push to get their ads shown, the cost of ads tends to swell. This is why ads for some industries cost more than others and why the cost of Facebook ads tend to increase during the holidays. For this reason, Thrive social media strategist Justin Hinojosa recommends monitoring these pricing changes constantly to optimize Facebook ads performance.
According to Hinojosa, “pricing changes should always be monitored and utilized to make educated optimization efforts toward audience segments with the highest return on investment (ROI).”
How Much Should You Pay for Facebook Ads?
In the previous section, we established an answer to the question “how much are Facebook ads?”. But for many businesses, the question that really matters is “how much should I pay to advertise on Facebook?” which is a matter of determining a budget that works for you.
According to Emily Bower, Thrive social media strategist and Facebook advertising expert, the best place to start when building your budget is by looking at historical data. Industry benchmarks offer plenty of information to help you establish your budget.
But when no data is available, you will have to build your own database from scratch. Run multiple ad campaigns, collect and analyze information and A/B test your ads to give you sufficient data you can use to optimize Facebook ads.
Utilizing industry benchmarks is a good place to get started,” said Bower. “Keep in mind that if a company is starting from a blank slate with social advertising, they [should] be willing to invest several months into traffic and A/B testing to collect the data needed to fuel a successful campaign.”
As you focus on building an effective ad strategy, remember that an optimized campaign takes a significant amount of time and investment to build, especially if you’re only starting out.
A/B test your ads and calculate your ROI using a Facebook ad cost calculator. A Facebook ad cost calculator is a tool you can use to estimate the cost of your campaign. A quick Google search for “Facebook ad cost calculator” will generate plenty of results and give you an idea of how much your Facebook ads budget should be. But there’s really no simple answer to how much a business should spend on Facebook ads.
A business should always keep in mind that paid social media campaigns are an investment in learning how your targeted audience reacts [to] your business and products,” Hinojosa explained. “It will take a few months to get a solid understanding of what works. From there, budget allocations are [built up] towards what is driving the highest return on ad spend (RoAS).”
Find the right approach that generates the most returns. A $1,000 campaign that returns $1,500 in revenue is way better than spending just $200 with only $100 in returns.
Determine Your Objective, Start Small and Go From There
In this blog, we answered questions like “how much do Facebook ads cost?” and “how much does it cost to advertise on Facebook?”. We also briefly talked about Facebook for Business and how the bidding system affects Facebook advertising cost.
But the thing to remember is, nothing is constant when it comes to Facebook advertising cost. As for how much you should spend on Facebook ads, Thrive’s Emily Bower offered a simple piece of advice:
Determine your company’s goal for social advertising. If a small, local business wants to give Facebook advertising a try, feel free to start small, ideally $500 per month. This is enough to run a small campaign and get a taste for how advertising can help overall business objectives,” Bower shared.
If a company is interested in diving in to gain data quickly, the cost should be at least $2,000 per month,” Bower added. “Already established and looking to scale? Then you already know what your target spend amount [should be].”
Advertising your business on Facebook is one of the best ways to establish your brand as an industry leader. Using Facebook’s ad platform, you don’t have to be a Facebook advertising agency to gain access to a wider audience.
Facebook offers special tools you can use to maximize ad placement by optimizing your bidding strategy. But as we learned earlier, setting an optimized budget can be complicated. Without the proper knowledge and expertise, you might end up with an underperforming ad, overspend on your campaign or end up spending way too much with little results. Work with an experienced Facebook ads agency to help you build optimized campaigns.
Thrive is a Facebook advertising agency that helps you share the right message to the right people on Facebook. Our Facebook ads agency offers Facebook advertising services geared toward helping you maximize ad placement while minimizing your budget.
Our Facebook ads agency uses excellent pricing models that help your business gauge how much to invest in initial ad campaigns to set a benchmark for your bidding strategy. Optimize your ad strategy today with Thrive’s Facebook advertising services. Start a conversation with us today by filling out this form or by giving us a call at 866-908-4748.