Chances are, if you’ve thought about advertising on Facebook at all, your thoughts have resulted in one burning question…
“How much does Facebook advertising cost?”
Often, for many marketers, this question is answered with an “it depends.” While the pricing does vary per person, here we’re going to break it down and give you an overview of each of the factors associated with the cost of Facebook advertising. This general overview will help you create a Facebook Advertising strategy that performs well within your budget.
Facebook Will Never Charge You More Than it Needs To
This may sound confusing, yet the truth is Facebook will never charge you more than it needs to in terms of reaching your target audience. If you set a daily spend for $10 a day, it will never cost you more than $10. However, the amount you spend WILL directly affect the ROI you receive from the Facebook ads. There are multiple optimizations you can make for your ad to ensure that it gets the best results for your budget and business. These results, combined with the initial budget will also affect overall cost and ROI of your campaign.
Facebook Ads Breakdown
We’ve all heard about the Facebook Algorithm, but how does that algorithm affect Facebook advertising?
Much like Facebook how uses an algorithm to determine which posts show up on a users feed, it also uses an algorithm to determine where and how often an ad gets shown. This ad specific algorithm allows advertisers to reach a precise target market, and deliver ads that create a positive experience for the users.
Once an ad is created, Facebook then holds an “auction” for the ad. This auction identifies how much you will need to pay to get your ad shown in a specific space and before the desired amount of people. The overall amount of money you put into your ad does not determine how much the bid will cost. In fact, if you have an ad that has $10 behind it, versus an ad that has $100 behind it, both ads will be able to obtain a placement at the same price until they run out of spend. Facebook created this algorithm to get the best content shown first, no matter the amount placed behind the ad.
Facebook auctions also utilize advertiser bids. In short, the advertiser bid is the exact amount that you are willing to pay for an ad. This bid is used by Facebook to gain a better understanding of how much you want your ad to be shown. Each bid can be set manually or automatically. However, it’s best to start out with automatic bids until you fully understand the Facebook advertising platform.
Automatic bid amounts are bids determined by Facebook. When bidding, Facebook will keep your overall budget in mind and try to get the best results for that amount.
With the Facebook auction system in mind, let’s dive into some important factors to consider when evaluating the costs of your Facebook ad.
Time of Year
The timing of your campaign can have a huge effect on the price of your ads. For example, advertising during the holidays is one of the most expensive times to advertise, as peak shopping seasons and holidays have every advertiser eager to buy ads and increase sales. Because of the high amount of competition, Facebook must increase advertising prices to meet supply and demand.
The most expensive months for Facebook advertising are October, November, and December. With holidays like Christmas, Thanksgiving, Cyber Monday, New Years, and Black Friday being those with the highest advertising prices. If your product sales are not affected by the time of year, it may be beneficial to spend less in the fall/winter seasons and dedicated a larger budget to the spring/summer seasons.
When should you advertise in fall/winter?
If the revenue you earn per sales during the fall/winter months is more than what you would be receiving without paying for Facebook ads, then its beneficial to advertise all year round, even when the costs of ads spike.
Choose Your Audience Wisely
Audience targeting can have a drastic effect on the performance and cost of a Facebook ad. Audience targeting allows ads to be targeted according to gender, age, interest, income, behaviors, and even connections. Using just one or more of these factors can help you create the perfect target audience for your brand.
It’s important to know your brand’s consumers extremely well to target the correct audience efficiently. Reaching people who resonate with your content will keep your Facebook advertising prices from skyrocketing. However, it’s important to keep in mind that some audiences are more expensive than others. Audiences that are extremely competitive, or that reside in the US will undoubtedly have a higher price tag than those who are less targeted.
Overall, the better you know your target audience, the less it will cost to achieve great results.
Pro Tip: Look for Audience Overlap
If you are testing multiple audiences, then it may be beneficial to check for audience overlap. Bidding on audiences that are similar may cause you to bid against yourself and in return raise the cost of your advertising. Not only may the same person see the ad more than once, but you’re also paying more to connect with that person because you are competing internally.
Having little or no audience overlap will eliminate internal competition and allow you to more accurately split-test audiences.
Use the Facebook Audience Overlap Tool to determine if your audiences are overlapping significantly. If they are, choose the audience that is most relevant to your brand and marketing goals.
Much like target audience, relevance ensures that the people who are seeing your ads WANT to see them. The quality of your ad and the level of interest your audience expresses upon seeing it have a direct effect on your relevance score. When calculating an ad’s relevance score, Facebook uses metrics like reactions, link clicks, comments, and playbacks to determine what your ads score will be.
To achieve a high relevance score, it’s important that your ad and product is relevant to your target audience. Take notice if your audience is liking the ad, sharing the post, and ultimately clicking through to purchase. The higher your relevance score, the lower your CPC (cost per click) and overall cost of advertising.
What’s a good relevance score?
Any score between 5-10. Ads which perform with a relevance score of 8-10 usually have the lowest CPC.
Facebook Pixel is code that you place on your website. It helps you track conversions from Facebook ads. While this may not directly affect your advertising costs, using the information that the Facebook pixel gathers for you can set your campaigns up for success and ensure that you aren’t paying any more than you have to. By simply entering a few lines of code on your website, you’ll gain access to loads of information about your clients.
Not only can it track who your clients are but it also gives you insights into what they’re interested in, where they live, household data, earnings, purchases and so much more. Knowing these specific details about your consumers can help you better target people who are more likely to buy your product. The Facebook pixel also allows you to track which ads are performing the best and have the most significant ROI.
Related: Top Facebook Advertising Hacks
When trying to keep your advertising costs low on Facebook, it’s imperative that you include video as a part of your advertising strategy. Because the Facebook algorithm favors video, the cost per Video ad is significantly lower than that of a carousel or single image ad for the same audience. Videos are also a great way to arise emotion and build a connection with your audience. This connection will engage your consumers and result in them reacting to your ad. These positive reactions will improve the relevance score and lower the cost.
For those on a budget, Facebook has its own slideshow creation tool that can be utilized to create quick videos that perform well with the algorithm.
Facebook is one of the most cost-effective ways to build brand awareness and reach your target audience. Its endless amount data makes it possible to continually learn about your customers and allows you to curate content specifically for them. Because the algorithm is frequently updated, Facebook enables businesses to stay ahead of the curve and remain relevant without having to spend a fortune. By working to regularly improve your audience selection, relevance scores, and content, you can create a Facebook advertising strategy that works well for your company and budget.
Now, back to the burning question… how much does Facebook advertising cost?
The answer is that it varies for everybody. However, keep in mind that if you build a high performing Facebook advertising strategy, you’ll be able to make a lot more than you spend.