Facebook advertising costs range widely and are dependent on many factors, including your industry, location, and objectives. With more businesses paying for Facebook ads and Facebook limiting the number of ads they show, quality and targeting is crucial.
Facebook ads can benefit any business size. There is a range of targeting options, and the ROI for any ad is easily calculated. Additionally, your ad budget is adjustable, so your maximum will be honored and can be changed whenever you want.
Let us go through key terms that you’ll see in Facebook ads and strategies to optimize budget-wise:
Facebook advertising definitions
You will only pay for your campaign goal but it’s possible that an ad can be interacted with in other ways. For example, boosting a post for engagement still creates a subtle Like button that users can click. You’ll only get charged for the post engagement. Even if your campaign goal isn’t to charge for impressions, you can still see what the average cost per 1000 impressions is.
- Cost Per Click (CPC): If your campaign is set to charge for clicks (users have to click on an ad), then the CPC will be your metric. The average is $1.72 CPC.
- Cost Per Like (CPL): Used in Like campaigns, the CPL is used when a user clicks Like when presented with an ad.
- Cost Per Mille (CPM): Cost per 1000 impressions. This is most often measured for brand awareness.
- Cost Per Action (CPA): For campaigns with specific actions in place, like an App Install, CPA is measured per action. The user will need to click the button for you to be charged.
- Relevance Score: Applicable only to ads, this estimated metric is on a scale of 1 to 10. It’s only shown after your ad has received more than 500 impressions and is based on how your audience is responding to the ad.
- Frequency: An estimation of how often a user sees your ad. This number is calculated by the total impressions divided by reach (total unique users). High numbers may indicate ad fatigue.
Setting a Facebook advertising budget
At the beginning of any budget-setting session, outline your goals for a specific campaign. Do you want to increase your Fan count or do you want to increase your website shop conversions?
This will lead you towards the decision of your objective. As we previously mentioned before, objectives have varied costs.
When creating your campaign for the first time, set a lower budget, so that you can see how the ad performs.
Your ad is going to be up against thousands of other ads at the same time. You can set a bid strategy of a lower cost which Facebook will determine for you. For a target cost, you’ll set an amount and Facebook will bid around that target. This can be costly in the short term but more stable in the long term.
If you find that you’re paying more during a certain time range, it may be useful to set a schedule for the ad. This option is only available for lifetime budgets.
For example, advertising for a happy hour won’t be as successful at 3 am as at 1 pm when customers are making decisions for their evening plans.
Finally, determine your ad copy and creative. You may not have to pay Facebook for this but developing your own ad copy and creative costs time and money on your end. If you’ve put in the effort to develop ads, optimize the images and edit the placement. Your ad won’t be universally successful across all of Facebook’s advertising network so you shouldn’t worry about making one-size-fits-all media.
Lower your Facebook advertising costs
Getting started in Facebook ads is a game of trial and error. Your company may have more successful ads on Instagram Stories than on the Facebook Newsfeed. But some things are universal when it comes to lowering costs.
Create multiple audiences
An undefined wide audience will not be as receptive to your ad as a well-targeted one. Your audience is one of the most important parts of your Facebook ad. The more segmented your audience is, the more success you’ll have in figuring out how they respond to your ads. You can access your saved audiences in the Audiences tab of Ads Manager.
There are a few ways of creating an audience on Facebook:
- Target audience: While you’re creating your ad campaign, you can add demographic restrictions to your audience.
- Custom audience: Create and save an audience that is made of past customers or website visitors. The website visitor audience requires a Facebook Pixel and is most successful in retargeting campaigns.
- Lookalike audience: Taking your existing audiences, Facebook will find people that are similar to the audience you selected.
In one campaign, you can have several ad sets. For each variation, you can review how much budget to distribute. Having several, variable audiences gives you more options on who to target.
Use Facebook’s Audience Overlap tool to determine if your audiences have too much overlap in your ads. You can access this in the Audiences section of your Ads Manager. Select any of the saved audiences to compare them. This is most helpful when you’re running multiple ads at the same time and don’t want your followers to get tired of seeing the same video over and over again.
A/B split test your ads
To find out what works best for you, use the A/B feature. To reach it, select a campaign objective and create a split test. This is a great way to get your feet wet in advertising without spending too much money.
Facebook will automatically A/B test your ads for you based on creative, delivery optimization, audience, and placement. When you’re setting it up, you’ll have the ability to set your budget, the split (even or weighted), the schedule and the duration.
Once the test is complete, Facebook will email you with the results. There’s also an option to end the test early if a winner is determined before the duration is reached.
Adjust your creative
Facebook is a visual-first platform for advertising. Images and videos work well when browsing through your Newsfeed. Users tend to see creative content first and then look at the associated copy. Use this to your advantage by improving your media and optimizing it for the placement you want.
If you choose a single image format for your ad, you have the option to upload up to six images. Facebook will then test the images for you in the form of A/B testing. Each image becomes its own ad and you’ll be able to see how each image performs. With multiple images, the budget will adjust itself to favor the best-performing one.
Factors that affect the cost
There are quite a few factors that affect the overall advertising cost on Facebook. When you’re setting up a budget, keep the following major factors in mind. Other factors that may affect cost include your country, audience age ranges, gender, and ad placement.
A crafts business targeting hobbyists may have a lower advertising cost than an obscure commercial agriculture tool.
Time of year
When you advertise or run your campaign on Facebook has a great impact on your costs. When Q4 and the holiday season comes around, you’ll find yourself competing with many more businesses, which will increase your costs.
Your campaign objectives matter. An app install often costs more than a post-engagement because it requires more buy-in from the user.
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