preloader

What Facebook Advertising Costs in 2023: A Complete Guide

Last updated on 

What Facebook Advertising Costs in 2023

Table of Contents

Facebook is a established digital marketing channel and hosts millions of different businesses around the world. The social platform currently has the world’s largest user base and features a highly advanced advertising suite with tons of different features to help businesses find their customers among this massive crowd. There’s no argue on Facebook being a trusted place for almost any business to advertise; 7 million advertisers actively use the platform for promotion and this number is growing by the day.

facebook advertising costs

But for any business owner looking to adopt Facebook in its marketing plan, there’s always the question of how much Facebook advertising costs especially with the ever-increasing competition between advertisers for user’s attention. We’ll try answering this question and explaining what actually determines you promotion costs on the platform and how you could keep down and get the most bang for the buck.

Why Facebook advertising?

We’ve reached a point where it’s really easy to answer this question. Facebook has been the #1 online social platform for as long as most of us could remember, and with having Instagram on its side, it simply provides the largest audience size you could possibly find anywhere on the Internet.

We’re looking at over three billion people users all around the world actively using Facebook for content, social interactions, news and events, shopping, etc. What gives Facebook an even bigger edge is its state-of-the-art advertising suite. The company has impressively harnessed the power of its gigantic user base for advertisers by accumulating enormous amounts of user data and developing advanced systems and algorithms to process and take advantage of this information.

why facebook advertising

Facebook gives you an unparalleled control over almost every aspect of your advertising efforts. Hyper flexibility and accuracy in audience segmentation and targeting is among Facebook’s strongest advantages. You can get extensively broad or extremely granular with your target audience and categorize them based on hundreds of different factors and be confident that your ads will be shown to the right people with really small margins for error. Additionally, Facebook Ads is equipped with dozens of campaign creation and optimization tools and features to further streamline the process of advertising and remove guesswork from the job.

Simply put, Facebook gives you almost everything you need to find prospects among a giant crowd. The only thing remaining is how you use it, and that’s actually what greatly influences how much you’re going to pay for finding customers on the platform.

How much does Facebook advertising cost?

Advertising costs on Facebook is measured based on the bidding model, primarily how much advertisers are going to pay on average for every click (CPC) and for every 1000 impressions (CPM). For Facebook, these numbers are around $0.4 and $14.4 respectively.

How much does Facebook advertising cost

There are also other models, including cost-per-engagement which costs $0.12, and cost-per-lead which costs $19.7 on average. Remember that these are all average and several distinct factors could make your Facebook ad spend fluctuate higher and lower than these numbers. We’ll go through these factors, but first let’s talk about how Facebook’s ad auction system works.

How do Facebook Ads auction work?

It’s crucial to get a full grasp on how Facebook handles its ad auctions to optimize Facebook Ads costs. Auctions are pretty common among major advertising platforms. In an ad auction, advertisers bid against each other for advertisement placements. The advertiser with the highest bids wins the auction and gets to show its ad to the target audience.

To help you better understand the concept, we skip the ad creation process where you prepare your ad creatives, target audience, scheduling, etc. Once your ads (or campaigns) are ready to be served, they will enter an auction for your selected placement automatically and multiple factors determine whether they’ll win or lose. The most important ones are your budget and bid.

  • Budget: The overall amount you’re willing to spend on your campaign. There are two budget types on Facebook: Daily budget and Lifetime budget.
  • Bid: How much you’re willing to spend on an ad placement. Bids could be set manually or by Facebook based on your budget and ad run-time.

You’ll never spend more money than the amount you’ve set for your budget. An important thing to know is that although the highest bidder wins the auction, it will always spend just a penny more than the second-highest bidder. For example, if your bid is set to $3 and the nearest competitor bid is $2.6, you win the auction but you’ll pay $2.7 for the placement.

How do Facebook Ads auction work

Price isn’t the only factor that determines the auction’s outcome. Otherwise, Facebook and Instagram would be filled with ads from businesses who beat other advertisers with large bids. In recent years, Facebook has heavily focused on bringing value to users and show them ads that they actually find relevant. To reach this goal, an ad’s total value is considered in auctions, which demonstrates how likely it is for your audience to find your ads relevant and interact with it. Here’s are the factors that determine your ad’s total value:

  • Bid: Since this is an auction, the amount you’re willing to spend to secure the placement is a major factor. Two primary bidding strategies on Facebook are automatic bidding (known as Target Cost Bid Strategy), and manual bidding (AKA Lowest Cost Bid Strategy). In the automatic strategy, Facebook helps you achieve your business goal with the lowest cost per action possible by spending your budget efficiently. Manual bidding is only available for app installs, lead generation, and product catalog sale campaigns.
  • Estimated action rates: Facebook estimates how many people will engage with your ad or convert from it. In other words, it’s the probability that showing your ads to users will lead to to your desired outcome.
  • Ad quality: Facebook will determine the quality of your ad based on user feedback, and assessments of whether or not your ads have low-quality attributes like withholding information, engagement baits, irrelevant post-click landing page, etc.

What determines your Facebook ads costs

Aside from the three main determining factors in Facebook ad auctions, there are other important parameters and attributes that could influence the amount of money you’re going to pay for your ads to be served on Facebook:

  • Objective: There are three main objectives for ad campaigns on Facebook: Awareness, consideration, and conversion. Each of these main objectives have different specific subcategories like brand awareness or engagement. These goals have different values that determine how much they will cost. Goals with higher values like conversions generate immediate revenue for the advertisers and consequently cost higher than goals like brand awareness.
  • Target audience: The size of your target audience could vary greatly based on the geographic, demographic, interest, and behavior filters you set, and it impacts your advertising costs. Targeting a more specific audience costs you more, but increases your chances of achieving your selected goal. Targeting a broad audience may cost less, but could negatively impacts performance since you may attract low-value interactions.
What determines your Facebook ads costs
  • Ad placement: Your ads can appear on many places across Facebook’s network which also includes Instagram and Facebook Audience Network. These placements consist of Instagram, Instagram Stories, Facebook newsfeed, Facebook right column, Messenger, and Audience Network. Each of them cost differently and you should select the one’s the better fit your business objective and budget.
  • Quality: The quality of your ads is a very important factor that could help you win auctions even with lower bids than the highest-bidding competitor. If your ads score a high relevance and engagement score and get a good assessment from the Ad Relevance Diagnostics, you can reduce your Facebook advertising costs significantly. Following well-proven tactics for creating high-quality ads and following Facebook’s guidelines is a good start to ace this factor. A great practice is monitoring high performing ads from advertisers in your industry with a Facebook Ads spy tool and get inspiration from winning campaigns and latest trend in Facebook advertising.

Conclusion

Facebook advertising seems like a no-brainer for businesses of almost any size and industry looking to reach their potential customers with relative ease and reasonable costs. The platform is highly advanced in terms of advertising tools and features and boasts a massive user base that no other social app could compete with. Price always remains a hot discussion topic among Facebook advertisers and even though it’s been slowly increasing over the years, it’s still one of the most reasonable methods of digital marketing.

FAQs

How much does Facebook advertising cost?

On average, Facebook Ads cost $0.3 to $0.5 per click and $14.4 per 1000 impressions.

How much does a Facebook ad cost per day?

The amount of your daily ad spend on Facebook depends on the daily budget limit you set for your campaigns and it will never exceed the amount you enter.

Why are Facebook ads so expensive?

Facebook advertising is actually among the most reasonably priced digital marketing channels. It’s important to know that several variables influence your ad spend and it’s crucial to optimize your campaigns to get the best results from your budget.

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts