With its versatility and widespread use, Facebook has become an effective channel for businesses of all shapes and sizes to connect with current and potential customers. Many of these businesses have decided to take their Facebook strategy a step further with Facebook advertising. Facebook advertising works so well because it allows businesses to tap into a massive network with relevancy. But just how much does it cost to advertise on Facebook? Let’s take a closer look at Facebook ad pricing to help you get a grasp on cost.
How Does Facebook Calculate Cost?
Facebook uses a similar pricing model for its ads that search engines use (for search engine marketing campaigns). Facebook allows you to base your advertising costs on:
Cost per Impressions (CPM)
This is how many people your ad gets displayed in front of. It is ideal for businesses who want to create brand awareness and want the most eyes on their ad as possible.
Cost per Click (CPC)
Cost per click means you’ll only pay for conversions, which is or when a user clicks the link on your ad. This is ideal for businesses who want to drive more traffic to their website.
Cost per Action (CPA)
With CPA, you get charged only for specific actions users take after seeing your ad, such as liking, claiming an offer, or installing an app. This model is more expensive than the other options, but yields a higher return on investment.
Is There an Average Cost of Facebook Advertising?
Facebook advertising works a bit like an auction. When setting your advertising budget, Facebook will ask you to input a cap on how much you’re willing to spend on a particular ad. Since Facebook regulates how often and how many ads users see, if you get outbid then your ad won’t get top billing. This particular feature makes it difficult to give a hard answer on the average cost of advertising on Facebook, but it’s a factor none the less.
Average advertising costs are also directly affected by the audience you choose to target. Keep in mind that the people pooled into your target market (based on parameters you’ve set) will be targeted by other advertisers as well, and they won’t be limited to only competing businesses. The best way to counteract the fierce competition is to be sure your ad is carefully targeted at a relevant audience.
How to Gauge Facebook Ad Costs
Relevance and Engagement Scores
Two useful metrics Facebook provides to gauge how well your ad is performing is the relevance and engagement score. This is calculated by how many people interact with your ad (clicking on it) as opposed to how many react negatively to it (clicking on a button indicating they don’t want to see the ad in the future). The higher your relevance score, the less you’ll pay for your ad space.
Also consider that the time of year has an impact on how successful, and pricey, your Facebook advertising is. The holidays can be an expensive time to advertise on any social media platform. A good Facebook advertising tip: If every store in the country will be having a sale (Black Friday, Labor Day, Memorial Day) you’re going to pay a premium to get your ad seen.
When carried out properly, Facebook advertising has the potential to bring new leads and customers to your business at a low cost. Take a look at your budget, audience, and what you have to offer on Facebook, to see if you should add Facebook advertising to your marketing toolbox.