Despite the rollout of iOS 14 and its many updates towards advertising, using Facebook ads still remains a lucrative way for businesses to get more customers The social media platform has been around since 2004, and it’s one that most people use every day.
With over 2 billion active users worldwide, there is no doubt that this is an effective marketing tool. However, with so much competition out there, you need to make sure your adverts stand out from the crowd if you want them to work.
Here we look at some ways to maximise your budget and the factors that influence Facebook advertising costs in 2021 overall.
Why choose Facebook advertising at all?
This platform’s active userbase isn’t dying down, despite downfalls and fluctuations throughout the years. As competition continues to get tougher, and being heard online becomes more of a challenge, standing out against your competition comes down to exposure and pure visibility. And Facebook ads offer just that.
Thankfully, Facebook advertising costs are cheap. They’re also easy enough to set up, and they can help bring traffic to your website or blog when done correctly. Ultimately, if you have a product or service that you’re trying to and more eyes on online, then Facebook ads could be the perfect place to promote it.
How do Facebook ad campaigns work?
The first thing you’ll notice about Facebook’s ads interface when creating an advert is that everything looks very similar to Instagram. You’ve got three main tabs: ‘Create Ad’, ‘Manage’ and ‘View’. These will allow you to create different types of advertisements such as text, image, video and carousel.
Once created, these Facebook ads placements can be positioned on any Facebook Page via the ad auction system. Through this, you can also target specific audiences based on age, gender, location etc. How you choose to do this will depend on whether you’re after pure brand awareness or direct leads, and that’s where Facebook advertising costs can differ.
The many types of Facebook ad placements
There are two main categories of Facebook ads you can run through the Facebook Ads Manager: paid and organic. Paid means that you pay a fee to post content on Facebook and amplify it to certain audiences you wish to target.
Organic posts appear naturally in newsfeeds without paying anything, as it’s up to your own Facebook page’s visibility to get the content seen. Both methods have pros and cons, but each are just as powerful as the other for generating success online. The only caveat is that Facebook advertising costs are higher, but deliver more immediate results.
Facebook ads cost formats: CPC and CPM
If you choose to go down the paid route, you can either opt for cost per click (CPC) where advertisers bid on keywords relevant to their campaigns or cost per impression (CPM) where advertisers pay per impression.
In general, CPC tends to be cheaper than CPM because it requires less investment upfront. But, if you know exactly who you want to reach through your campaign, CPM might be better suited to your needs.
A note on cost per impression
On a side note when discussing the meaning of cost per impression – this term refers to the amount advertisers spend on an individual user when viewing their advert. CPM is calculated based on impressions – which is simply the number of times an advertiser’s ad appears on a page. It’s important to note that this figure doesn’t always directly correlate to leads.
There is no hard and fast way to know how much you will pay for a click on Facebook; there are some things you can do to maximise your cost overall. In the following sections, we’ll run through what you need to know to set up the cost of Facebook ads so that they work in your favour.
How much does Facebook advertising cost?
From 2017-2021 the cost of advertising on Facebook soared significantly, and we’re still experiencing this price hike. If you’re looking at marketing through Sponsored Posts on the platform, you should now prepare yourself to pay a minimum of $1.72 per click on average, with the highest spanning upwards of $3 per click. Obviously, this depends on the nature of your targeting and the industry you’re in, as some are more competitive than others.
When discussing the Facebook advertising costs, it all comes down to the cost per click and its overall efficiency. Some audiences can deliver a CPC of as little as $0.20, while others can significantly increase when targeting is more granular.
Overall, there are key primary factors you’ll need to keep in mind when it comes to understanding what’s influencing your Facebook ad spend:
- The target audience of your Facebook ad campaign
- Time of year (seasonality)
- Ad placements
- Quality of your creative (copy and visuals).
How your target audience influences your Facebook ads cost
As mentioned above, one of the biggest influencers of your Facebook ad costs is your targeted audience. The type of people you attract determines whether they’re likely to engage with your message or not. And, therefore, affects your Facebook ad spend and the amount you pay for an individual interaction.
As an example, finance and insurance industries attract the highest Facebook advertising costs, sitting at $3.77 per click – the highest out of any other vertical. Meanwhile, the cheapest categories fall under apparel ($0.45) and hospitality ($0.63), purely because of the accessibility of the target audience and the difficulty of conversions from them.
Seasonality and Facebook ad costs changes
The time of year you choose to run a Facebook ads campaign also changes the cost of your ads During peak season, such as Christmas, Easter, summer holidays etc., the price increases by around 10%. However, if you decide to advertise during off-peak times, such as winter months, then the cost is likely to decrease by 5% to 7%.
This means that choosing specific dates to promote certain products could save money over the long term. But, obviously, these savings come at the expense of missing out on potential sales.
Objectives for your Facebook ads campaign
The goals you have in place for Facebook ads also influence how much you’ll pay for each ad placement. For instance, if you want to drive traffic to your website, then you may find that you don’t necessarily need to pay too much for clicks. On the flip side, if you want to generate leads, you’ll probably need to invest more ad spend in your ad campaigns.
It’s essential that you add conversion tracking here to ensure you fully understand how your Facebook ads cost is influencing your ROI.
If you’re planning on trying to reach your target audience through an ad campaign, it’s likely your competitors are too. How they choose to use Facebook for their own ads also influences how much you will pay for yours. including how much their own advertising cost works. But most notably, you can also use their behaviour and results to inspire how much you’ll change your ad campaign.
For example, if you notice that your competitor has spent thousands of dollars promoting their product, but only generated a handful of likes, comments and shares, then there is a lot of improvement you can make in terms of how you choose to target. Most notably, their method was probably to gain attention and engagement without spending enough to trigger conversions.
You can always learn from someone else’s mistakes!
How an ad placement influences Facebook advertising cost
There are two main types of ad placement: right column and left column. RCs appear directly below a post, while LCs sit alongside posts. Both options offer different benefits depending on where you put them.
Advertisers often prefer placing their advertisements within the right column due to its high visibility. As well as being visible, this option offers a higher reach than the left column. This is where the cost may be high though, with each advertisement costing between $1-$2.50.
Meanwhile, the left column is less expensive than the right one, offering up to 50% cheaper Facebook ad costs. The downside? Only half of all users view content within the left column. So, unless you plan on targeting people who read articles or news feeds, there isn’t really enough value in using this method.
Your ad’s relevance dictates how much Facebook advertising costs
If your product is relevant to people, they will want to buy it; they will click on your ad and find out more, making conversions easier to get. However, your CPC would be much higher if you targeted the incorrect audience for your creative or completely misaligned your budget, and conversion rates would likely plummet. In this case, while not a direct price correlation, your Facebook advertising costs would mean they’re expensive and not so great for your ROI.
The quality of your creative dictates Facebook ads cost
When creating an advert through the Facebook ads system, brands must make sure they create engaging images and videos that grab the user’s attention. If you do not include any visual elements, then your audience won’t engage with your message.
As a result, you should spend some time researching which type of image works best for your business, and how Facebook advertisers like you are doing similar things. There are many tools available online that allow you to test various visuals before deciding whether or not to go ahead with them.
You could even try out Instagram stories, which are short video clips that disappear after 24 hours. These are perfect for showcasing products and services because they give you the chance to show off your work at no extra charge.
In addition to these features, other factors such as size, colour scheme and font style play a role when determining the price tag. However, keep in mind that the larger the file, the longer it takes to load. Therefore, smaller files tend to be quicker to download. All of these factors influence how much you will pay for Facebook ads.
How to set up your Facebook ads at the best CPC
In order to get the best CPC for your Facebook ads in 2021 , you need to know exactly how your ad budget and Facebook ad bidding works. To help you understand how to calculate your own prices, we’ve created a guide that explains everything from start to finish.
Step 1 – Set up your campaign
To begin setting up your first Facebook ad, follow these steps:
- Click ‘Create Campaign’ under ‘Campaign Manager’.
- Select ‘Businesses’ from the dropdown menu.
- Enter your name and email address into the fields provided. Choose your location.
- Set your target market by selecting either ‘People interested in…’ or ‘People located near…’.
- Next, select the number of days you wish to run your campaign for.
- Finally, choose your daily budget.
Once you have completed these steps, you will then see your initial settings. Click ‘Save Changes’ once you are happy with your choices.
Step 2 – Create your ad copy
Incorporate power words and emotional appeal that influences audiences enough for them to engage. Consider how you can relay to them that they need your products and services. However, you’ll have to do this in a very limited space and a handful of words (psst – that’s where our experts come in handy).
Now that you have selected who you want to reach, where they live and how long you plan to run your Facebook ads campaigns for, you’ll need to write your ad copy. This is the text that goes with your ad placement.
The most important thing here is to ensure that your ad has clear call-to-actions that encourage users to buy or get in touch.
For example, if you sell shoes, you may use CTAs like “Buy Now” or “Get 10% Off”. You also need to consider the language used in your ad. Make sure that it is simple but effective. Avoid using jargon and technical terms unless you really mean them.
If you don’t speak English fluently, plenty of translation apps can translate your text into different languages to help you target more Facebook users who may be interested in your offering.
Step 3 – Upload your creative assets
Once you have written your ad copy, uploaded all relevant information about your product/service and chosen your targeting options, you can upload your creatives. This can be done through the same process in the Ads Manager, and all prompts will direct you on how to create your ad sets.
After you upload your creative assets for your Facebook ads, you can preview them. If you find any errors, make changes until you are satisfied with the final version.
You can then add more images, videos, links and buttons to create an engaging advertisement. Remember to include calls-to-action, so people know what to click next!
Step 4 – Start running your campaign
After you have finished creating your winning ad, you can finally launch it. Just make sure you monitor the progress and tweak your advertising campaigns depending on your average Facebook CPC and overall ad objective.
A simple checklist for your setting up your advertising budget
There’s a lot to understand about ad performance, audience targeting, the average cost of Facebook advertising and everything beyond it. But to help you determine Facebook advertising costs that are appropriate for your needs, follow these steps:
1. Set your daily budget
Before you start planning your budget, you first need to decide how much you’d like to allocate every single day. Think about what you can afford as an ongoing Facebook advertising cost and whether it will deliver enough results.
2. Choose your target audience
Once you’ve decided how much you want to invest each day in Facebook advertising costs, you must choose between two types of targets – broad and specific. Again, incorporate everything we mentioned above when choosing who to zoom in on.
3. Decide if you’ll use dynamic content
Dynamic content refers to anything that updates itself as it interacts with users. For example, this could mean changing headlines, descriptions, pictures etc, depending on user behaviour. You may also wish to consider using video instead of static image posts. This will differ from one campaign to the next, especially if your ad objective is to get brand awareness vs. direct leads.
4. Create custom audiences
Custom Audiences allow you to target individuals by demographic data such as age, gender, location, interests, behaviours and even mobile phone numbers. They are great Facebook advertising tools for engaging existing fans and followers, but they aren’t always suitable for B2B companies looking to reach potential clients.
5. Implement remarketing campaigns
Remarketing lists let you reengage past customers with relevant adverts. If you haven’t already done so, you might find yourself missing some key information about your most valuable customers. By adding this info to your list, you can ensure that future messages contain all the necessary details. Facebook’s reporting features give you plenty of information on using lists like this, as does Google Ads and email marketing campaigns.
6. Optimise your landing pages
Landing pages are designed to engage those that click through to it from Facebook ads, Instagram ads or any other paid promotion. When creating these, make sure that you optimise them appropriately with good copy, calls to action, clear messaging and links back to your main site.
7. Test different formats
You don’t necessarily have to stick to just text and images. Try experimenting with videos, polls, games and more. In fact, Facebook video ads are becoming more and more popular as time goes on. These will also fluctuate and influence whether you pay lower Facebook advertising costs or higher.
Understanding how the Facebook ad auction works
Facebook has a bidding system for its advertising model, which means advertisers pay based on performance. The higher the bid price, the better chance you will have at reaching your audience through your Facebook advertising campaign.
When you set up your campaign, you should enter a maximum amount per day that you would like to spend. Then, when someone clicks through to your page, Facebook will automatically adjust the bids accordingly. This way, you won’t end up spending too much money each time someone visits your website.
How does Facebook determine my ROI?
Remember, there are many extraneous factors that go into determining whether or not your investment was successful. These include:
• How well did you perform compared to other competitors?
• Did you achieve your goals?
• What were the results from your previous campaigns?
• Were you able to convert visitors into leads?
• How much do Facebook ads cost in comparison to other alternatives?
How much should Facebook advertising costs be for your brand?
To help you track your success, Facebook provides detailed reports that show exactly how your campaign performed. We recommend coupling these with Google Analytics to fully understand how your entire campaign has benefited (or not) your bottom line.
Setting up your budget correctly is essential to ensuring that you’re getting the best return possible out of your marketing efforts. Here’s everything you need to know about setting a Facebook ads budget 1. Set a daily budget limit
The first thing you’ll want to do is decide how much you’d like to allocate towards Facebook ads every single day. Remember, if you exceed your daily budget, then you’ll incur additional fees. So make sure you keep within those limits.
If you’ve never used Facebook before, we suggest starting off with $10-$20/day until you feel comfortable enough to increase your budget. From there, you can decide whether it’s worth investing more Facebook ads cost, or if the baseline is enough.
How to get lower Facebook ad costs
If your budget is starting to warp and you’re hinging on spending too much for your campaign, here are our tips for reeling back the costs.
Put a limit on your ad auctions
Cap your bids on Facebook, as the platform has no idea what this data means to your business. That means it’s entirely up to you how you want to steer your campaign.
This is where having a social media expert can help you navigate the complexities. Use Facebook Insights to see who clicked on your post and why they visited your landing pages. You can use this information to improve future posts by tailoring content to specific audiences.
Create multiple versions of your ads so you can test various creative elements without incurring extra charges. For example, create one version that uses video and another that doesn’t. If you find that specific creatives work better than others, it may save you some cash down the road.
Finally, lower your maximum CPC or CPM bid so that Facebook starts looking for cheaper alternatives for your ad.
Putting it all together
At the end of the day, your Facebook ads campaign cost will differ from one brand to the next. Every business is different and so are its goals, budgets and audiences.
For these reasons, you need to make sure your strategy is completely tailored, not just a cookie-cutter version of what someone else is doing – especially if they aren’t in your industry.
Of course, if you need help, Edge’s social media marketing experts are always ready to help. We know Facebook like we know every last secret of using a smartphone, so get in touch with our specialists for support.