How Much Do Facebook Ads Cost | 2024 Ultimate Guide
How much do facebook ads cost?
How much facebook ads costs is a subjective question, like any marketing activity, it comes down to your industry, competition, how and when ad is shown and of course how well your ads are optimised. In this article we will look at how much facebook ads cost, what the average agency management fee is and how you can optimse your audience, targeting and bigging in a bid to lower ad costs.
Facebook is the worlds largest social media platform, Marketers can reach a total potential audience of 2.249 billion users through Facebook ads as of April 2023. This represents 108 million more potential users compared to April 2022.
As such it has the most advanced social media marketing technology. Facebook Ads are an integral part of many small business’s marketing strategy, and for good reason this social media bohemouth allows for targeting based on age, gender, profession and interests. This means that your ad can be shown to the exact demographic that is likely to commission your product or service.
How Much Do Facebook Ads Cost?
Facebook provides advertisers with several different pricing models for their ads:
Cost Per Click (CPC) - You pay each time someone clicks on your ad. The average CPC for Facebook ads across all industries is around €0.92
Cost Per 1,000 Impressions (CPM) - You pay per 1,000 views/impressions of your ad. The average CPM is around €9.91
Cost Per Lead (CPL) - You pay per new lead generated from your Facebook ad campaign. The average CPL is €8.77
Pricing can vary significantly based on factors like audience targeting, ad relevance, industry competition, and bidding strategy. Highly competitive industries like legal services tend to have higher CPCs around €3.08, while less competitive niches may pay under €0.50 per click.
How is Ad Cost Determined?
Facebook runs an ad auction system to determine how much advertisers need to bid to have their ads shown to specific audiences. Several factors go into this auction:
Bid Amount
Your maximum bid amount for the desired user action (click, impression, etc).
Estimated Action Rates
How likely Facebook deems users are to take the action you bid on.
Ad Relevance/Quality
An assessment of your ad's relevance to users based on interests, demographics, and expected user experience.
With higher bids, better estimated action rates, and more relevant ads scoring higher overall, Facebook then charges you the minimum amount required to beat the next highest scored opportunity for that user.
How Does the Facebook Ad Auction Work?
When multiple businesses bid to display ads to the same targeted audience on Facebook, an auction takes place behind the scenes. The ad auction considers three key components:
Bid Amount
The maximum you are willing to pay per result (click, impression, etc). Higher bids increase your score.
Estimated Action Rates
How likely Facebook deems a user is to complete your desired action like clicking your ad. Relevance optimised ads score higher.
Ad Relevance/Quality
An assessment factoring in positive/negative feedback on your ad's quality and relevance to the targeted audience.
Facebook calculates an overall score for each ad opportunity, with the highest scored ad winning the opportunity to be displayed to that user. You only pay the minimum amount required to beat the next highest scored opportunity.
What Are the Different Bid Strategies for Meta Ads?
Facebook provides several automated and manual bidding options:
For most advertisers, the lowest cost or target cost strategies make the most sense to stay within a maximum desired cost per acquisition.
What is Average CPC for Facebook Ads?
The overall average cost per click (CPC) for Facebook ads across all industries is €0.94.
However, CPCs can vary greatly based on factors like audience, ad placement, and industry competitiveness. Highly competitive industries like legal services see CPCs around €3.08 on average, while less competitive niches may pay under €0.50 per click.
Here are some average Facebook ad CPCs by industry as of February 2024:
Your actual CPC will depend on your specific business, offer, audience targeting, ad quality, and bidding strategy.
Average CPM for Facebook Ads
While many advertisers bid based on CPC, impressions-based pricing through CPM bidding is also common for brand awareness and video view campaigns.
The overall average CPM for Facebook ads across all verticals is €9.88 as of February 2024.
Similar to CPC, CPMs can vary drastically by factors like industry competition, ad quality, and audience. More competitive industries tend to have higher CPMs:
Here is the data in a table format:
If you are running impressions-based campaigns focused on video views or brand awareness, be prepared for average CPMs in these ranges based on your specific business.
Average Cost Per Lead for Facebook Ads
While CPC and CPM pricing are common, some businesses, particularly in B2B, may focus on cost per lead (CPL) pricing for campaigns aimed at generating leads.
The average CPL for Facebook lead ads across all industries is €8.60 as of February 2024 data.
Similar to other pricing models, your actual CPL can vary significantly based on your industry competitiveness, offer attractiveness, audience targeting, and ad creative. More competitive B2B industries tend to have higher CPLs, sometimes exceeding €50 per lead for high-value offers.
What Factors Determine Overall Facebook Ad Costs?
There are several key factors that will impact how much you end up paying for Facebook ads:
Industry
As shown in the pricing examples, some industries are far more competitive for ad auctions than others, driving up costs.
Audience Targeting
Narrower, more specific audiences can reduce competition and costs. Broader audiences mean more competition.
Ad Relevance/Quality
Ads with high relevance and engagement scores see lower overall costs in Facebook's auction system.
Bidding Strategy
Using a lowest cost or manual target cost bid strategy can help control maximum costs paid.
Ad Placements
With over 2 million active advertisers on Facebook, the platform offers a vast array of ad placement options to reach your desired audience effectively. From the immersive world of Instagram Reels to the bustling Facebook Marketplace, businesses can leverage multiple formats to maximize their advertising impact.
Instagram Reels
Organic Instagram Reels boast a staggering potential advertising audience of 697.1 million users. This short-form video content format allows brands to showcase their products or services engagingly, tapping into the ever-growing trend of vertical video consumption.
Facebook Stories
With a potential reach of 1.25 billion users, Facebook Stories offer a unique opportunity for businesses to capture their audience's attention with immersive, full-screen experiences. These disappearing stories create a sense of urgency and exclusivity, making them an ideal platform for time-sensitive promotions or behind-the-scenes glimpses.
Facebook Search Results
With 733.1 million potential users searching on Facebook, advertising in search results presents a golden opportunity to connect with consumers actively seeking products or services like yours. By strategically placing ads within search results, businesses can increase visibility and drive conversions from highly motivated audiences.
Facebook Marketplace
Facebook Marketplace, with its potential reach of 495.7 million users, is a thriving hub for local commerce. By advertising on this platform, businesses can target consumers in their immediate vicinity, promoting their offerings to a highly relevant and engaged audience.
Messenger Ads
Personalised Engagement at ScaleFacebook's Messenger platform offers a direct line of communication with potential customers, allowing businesses to deliver highly personalised ad experiences. With the increasing popularity of conversational commerce, Messenger ads provide an avenue for seamless interactions and customer support.
With these diverse placement options, businesses can craft tailored advertising strategies that resonate with their target audiences, driving engagement, conversions, and ultimately, success in the dynamic world of social media marketing.
Top Tips to Reduce Facebook Ad Costs in 2024
Leverage these tips to minimise what you pay for results on Facebook ads:
1. Focus your audience targeting with detailed demographics, interests, behaviors, and custom audiences. More specific audiences equal less competition.
2. Create engaging ads with strong copy and creative to maximise your relevance score and quality rating. Video Content invariably works better than static content.
3. Test different bid strategies like target cost to have maximum control over costs.
4. Consider ad placements like Facebook's audience network to reduce competition.
5. Schedule ads around off-peak times and seasons to avoid spikes in competition.
6. Retarget warm audiences like website visitors who are lower in the funnel and less costly to convert.
7. A/B test creative variations to identify top performing assets without wasting spend.
By taking a strategic approach to Facebook ad optimisation, smart advertisers can reduce their costs per result while still driving efficient conversions and sales.
FAQs
Here are some frequently asked questions about the costs of advertising on Facebook:
How much do Facebook ads cost per day?
Facebook has no minimum daily ad spend requirement. Your daily costs will depend on your budget, bid strategy, and volume of users you're targeting. €5-20 per day is a typical budget range for smaller advertisers.
Why are Facebook ads so expensive?
Costs on Facebook rise when your targeting is too broad or your industry is very competitive. Healthcare, finance, and legal are among the most expensive verticals for Facebook advertising currently.
Is €1 a day enough for Facebook ads?
While you can technically run ads for €1 per day on Facebook, such a small budget is unrealistic to reach a meaningful audience or drive noticeable results. Plan for at least a €5-10 per day minimum. Bare in mind the average Cost Per Lead is around €9 , so a spend of €1 per day is unlikely to yield much.
Should you spend more on Facebook ads or Google ads?
There is no one-size-fits-all answer, as each ad platform has advantages. Facebook excels at visual Discovery-based prospecting, while Google is stronger for intent-based search advertising.
How much should you spend per month on Facebook ads?
Most small businesses allocate €1,000 - €3,000 per month for Facebook advertising, while larger organisations commonly spend €10,000 - €30,000 per month or more depending on their goals.
