Facebook Advertising Cost: How To Balance Your Ad Budget?

How much does Facebook Advertising Cost? This is a question that many businesses are grappling with. It’s crucial to understand the costs and effectiveness of any platform before investing heavily. Don’t worry, let’s explore everything about Facebook Ad Costs in this article. I’ll cover the basics and delve into more advanced tips to give you a clearer picture of this high-potential, yet competitive platform.

facebook advertising cost
Facebook Advertising Cost: How To Balance Your Ad Budget?

How Much Does Facebook Advertising Cost In 2024?

‘There’s no one-size-fits-all answer to Facebook Advertising Cost’ is the common answer from most agencies and professional advertisers when asked about Facebook ad pricing. It’s impossible to provide a definitive figure because Facebook Advertising Cost fluctuates depending on numerous factors.

However, I’ve compiled the latest advertising metrics for 2024, sourced from AdCostly as of July 23, 2023. Let’s start with CPC.

Facebook Ad Cost in 2024: CPC

CPC, or Cost-Per-Click, is the amount you pay for each click on your Facebook ad. Last year, it averaged around $1.72, but this year it has significantly decreased. As of July 2024, the average CPC across all industries is approximately $0.70.

cpc
CPC

In my opinion, this is the best average CPC that Facebook has offered in the past year. For more competitive industries, CPC might be higher, but there are ways to lower this metric for your ads, so don’t worry too much yet. 

Facebook Advertising cost in 2024: CTR

Facebook Ads CTR (Click-Through-Rate), represents the percentage of people who click on your ad after seeing it. Last year, it was around 0.9%, but it has significantly increased in the first half of 2024 to about 3%, a rise of approximately 2%.

ctr
CTR

What does this mean? It suggests that all advertisers should strongly consider running conversion campaigns on Facebook. With such a high CTR, the opportunity to generate conversions and profit from your products through Facebook Ads is substantial. 

Facebook Ads cost: CPM

Facebook Ad CPM is cost-per-mille or cost per 1000. This represents how much you have to pay to show your ad to 1000 people on Facebook. Currently it’s ~$9.36. Last year it was ~$9.98. (according to Statista). 

cpm
CPM

CPM on Facebook has increased ~0.93% after one year. This is quite understandable to me, because the competition to display ads on Facebook is increasing. So you also need to carefully research competitors in the same industry and product type on Facebook before starting to advertise on this platform.

About CPA

CPA is cost-per-action, which represents the amount of money you need to pay for each customer action. It can be an add to cart, a click on a product on the website, or any customer action you want.

cpa
CPA

This number is currently around $4.09. In my opinion, this is an acceptable number. Although it has decreased slightly over time, however, with around $4 that you have obtained a specific (optional) customer action, this can be called very potential.

How Much Does Facebook Advertising Cost Per Month?

Next, many businesses are deeply concerned about monthly Facebook ad costs. This is a crucial factor in determining whether to use Facebook Ads as a primary advertising tool in their marketing strategy.

For small businesses with limited advertising budgets, it’s recommended to start with a monthly budget of $200 to $800. If more funds are available for professional advertising, businesses can increase their monthly budget to $1500 to $5000. Larger enterprises often allocate significantly more to paid advertising, ranging from $10,000 to $50,000 per month.

You can look at the monthly Facebook advertising costs table by industry below to estimate the cost of advertising for your product or service:

Industry Estimated Ad Cost For A Month(USD) Main points
Fashion $40 – $200 Highly competitive, heavily reliant on high-quality images and videos.
Cosmetics $30 – $160 Similar to fashion, requires investment in creative content.
Food & Beverage $20 – $120 Costs can increase during holidays or with special promotions.
Education $60 – $240 Wide target audience, requires specific targeting strategies.
Real Estate $80 – $400 High costs due to high product value and long customer lifecycles.
Travel $50 – $200 Depends on the travel season and type of service.
Technology $80 – $320 Specific target audience, requires in-depth and engaging content.
Financial Services $120 – $600 Highly competitive, requires strict adherence to advertising regulations.
E-commerce $60 – $280 Costs can increase during major shopping events.
Health & Beauty $30 – $160 Similar to cosmetics, requires investment in quality content and building trust.
Services $20 – $100 Generally lower costs than product-based industries, but requires effective local targeting.
Non-profits $12 – $60 Typically lower costs due to the nature of their work and may receive support from Facebook.

Note: The above summary table of costs by industry is for reference only.

Some Facebook Ad Cost Calculator For Advertiser

Some advertisers are wondering about the cost and want to calculate some indicators for their Facebook advertising campaign in advance. So the next content is Facebook Ad Cost Estimator Tools for you to use right now. I recommend to you the 4 best advertising cost calculators today including:

facebook ad cost calculator
Facebook Ad cost calculator

Madgicx

Madgicx offers a pretty comprehensive Facebook advertising cost estimator. It lets you input parameters like your campaign objective, budget, target audience, placements, and ad type to get a detailed cost estimate. In addition, Madgicx also provides deeper analysis of your ad performance and optimization suggestions.

I highly appreciate the friendly, easy-to-use interface, which provides a lot of detailed information and in-depth analysis.

However, Madgicx’s calculator may require you to register for an account to use all the features.

ConvoBoss

ConvoBoss focuses on estimating costs for Facebook Messenger ads campaigns. It helps you calculate the cost per message, per lead, and per conversion through Messenger.

It’s also quite good because it’s specialized for Messenger advertising, and the interface is simple and easy to use.

However, the biggest drawback of ConvoBoss’s calculator is that it doesn’t provide cost estimates for Facebook ad types other than Messenger.

Coefficient

Coefficient is an all-in-one marketing analytics tool, including Facebook ad cost estimates. It uses data from a variety of sources to provide more accurate estimates.

However, it can be more complicated for beginners, requiring integration with other platforms.

ToolKits

ToolKits offers a simple but useful set of Facebook ad cost calculators. You can estimate your cost per click (CPC), cost per thousand impressions (CPM), and cost per action (CPA).

While it’s free, easy to use, and provides quick estimates, it doesn’t offer as many in-depth analytics features as other tools.

Factors Affect Facebook Advertising Cost Right Now

Basically, Facebook advertising works on an auction model, where advertisers compete for display positions. You set a maximum budget for your ad and Facebook will try to distribute that budget evenly throughout the duration of your ad.

Your ad will participate in an auction and the system will decide where it will appear and the cost based on your budget and the effectiveness of the ad. You only pay for actual interactions with your ad and can choose to pay automatically or prepay. However, the amount you need to spend to buy ads on Facebook depends on key factors such as:

Audience

Audience is the first factor to consider when it comes to Facebook ad costs. Why? Simply put, Facebook’s suggested bid varies for different audience groups and types.

audience
Audience

This difference becomes even more pronounced when targeting high-income earners. You’ll likely need to spend at least $2 to $3 per action, and potentially up to $10 per lead (CPL) for this audience.

Expert advice: Experiment with your ads on different audience types. Track their performance in a comparison table and then focus your advertising on the highest-performing audiences.

Ad Objective

Ad objective directly impacts Facebook ad costs because:

  • Different objectives attract varying levels of competition: High-demand objectives like conversions often cost more due to increased competition among advertisers.
  • Facebook assigns different values to user actions: Conversion actions are generally more valuable than awareness actions, leading to higher costs for conversion-focused campaigns.
  • Facebook’s algorithm prioritizes ad delivery based on your objective: If you want reach, your ads will be shown to more people, potentially at a lower cost per impression. Conversion-focused campaigns may have higher costs per result due to targeting users more likely to convert.

Ad Placements

Certainly, the location you choose to advertise will cause the ad cost to change, and this change is due to: 

  • Visibility and demand: Placements with higher visibility, like News Feed or Instagram Stories, often have higher demand and therefore higher compared to less prominent placements like the right column or Audience Network costs.
  • Competition: Popular placements attract more advertisers, leading to increased competition and potentially higher bids to secure those spots.
  • Audience engagement: Placements with higher engagement rates (e.g., video ads in News Feed) may command a premium due to their potential for better results.

Ad Relevance and Ad Quality

Key Point: After you submit your ad, Facebook uses Machine Learning to assess it. It initially shows your ad to a limited audience and then evaluates their interactions to determine your ad’s relevance and quality.

ad relevance
Ad relevance

First, Ad Relevance focuses on your ad creative, message, call-to-action (CTA), and anything else visible to the audience. If your ad copy effectively engages the audience during this learning phase, your Ad Relevance score will be high.

Second, Ad Quality ensures your ad adheres to Meta Ads Policies, uses the correct video or image dimensions, and has clear, undistorted media files. In short, meet all of Facebook’s requirements.

Ad Bid

Ad Bid affects your entire advertising budget and costs. Here are some Ad Bid strategies that you MUST know:

  • Budget-Based Bidding: Maximize results within your set budget. ‘Lowest Cost’ targets the most actions for the least money, while ‘Highest Value’ prioritizes more valuable leads. ‘Cost Cap’ and ‘Minimum ROAS’ (Return on Ad Spend) options balance cost and results.
  • Goal-Based Bidding: Focus on achieving specific campaign goals. ‘Cost Cap’ sets a maximum cost, and ‘Minimum ROAS’ aims for a certain return on investment. It’s key to understand how these differ from budget-based strategies to optimize your Facebook ad spending.
  • Manual Bidding: Best for experienced advertisers who want hands-on control. Requires a strong understanding of the different bidding strategies, their pros, cons, and how they fit into your overall ad strategy.

Expert’s Recommend: If you’re new to Facebook Ads, you can start with the automatic bidding strategy. It’s a great way to learn the ropes. Once you’re confident in your understanding of your target audience, your ads, and budget management, you can explore ‘Manual Bidding’. With this option, you set your own bid amounts. The key is to find a bid that’s just high enough to outbid competitors while still delivering the results you want. 

Time of year and day

Of course, ad costs fluctuate based on the time of day and events throughout the year. This is primarily because audience demand for purchases and ad interactions changes over time.

For example, when I run conversion campaigns, I often increase my budget around 7 PM and pause underperforming campaigns. This is when I notice a slight shift in audience behavior, with higher purchase intent, making it a good time to compete.

Additionally, I recommend that brands advertising food and beverages target times before meals or holidays. These are periods when the audience’s desire for food and drink increases.

Tips To Make Facebook Advertising Cost Cheaper In 2024

For the final part of this article, I focus on analyzing some good tips to improve your ads as well as reduce your advertising costs on Facebook. Specifically, these tips are:

Optimize your content

“Content is king” is a well-known phrase in marketing, and it holds true for Facebook Advertising. Compelling, focused content that resonates with your audience and addresses their needs will lead to increased effectiveness and conversions. This, in turn, can significantly lower your ad costs.

Additionally, incorporating enticing offers and subtle, well-placed calls to action within your ad content can also make your advertising more affordable. However, always A/B test to identify the highest-performing ad variations.

Monitor Ad Performance diligently

Unlike creative content creation, managing ad performance requires diligence from Facebook advertisers. If you’re truly dedicated and closely monitor your campaigns, you’ll gain valuable insights.

First, your costs can spike unexpectedly at various times. If it gets too expensive, you can immediately pause the ad or lower your budget. Conversely, if you see a favorable cost, you can increase your budget and continue monitoring audience actions.

This demands diligence and close attention when managing ad campaigns. For a large number of ads, you can utilize Facebook’s automated Campaign Budget Optimization (CBO) feature.

campaign budget optimization
Campaign budget optimization (CBO)

Bidding strategy 

I have shared about bidding strategies in the previous section. Here, I want you to pay attention to choosing the right bidding strategy.

Based on your advertising goals and budget, choose the right strategy. If you are just starting out, use automatic bidding. Once you have experience, you can switch to manual bidding to better control costs.

Next, you need to monitor the performance of your advertising campaign and adjust bids when necessary. Use Facebook’s analytics tools to measure performance and improve your ads whenever needed.

Pay attention to advertising time

For advertising time, it’s entirely up to you. You need to track both your audience’s engagement with your Facebook Page and their interactions with your ads over time.

set up ad scheduling for better advertising time
Set up Ad Scheduling for better advertising time

You can use Meta Business Suite, a fantastic free tool from Facebook, to monitor engagement and schedule posts, ads, and more. Maintain your ads and posts during peak engagement times to ensure maximum audience reach.

Additionally, within Meta Ads Manager, you can control when your ad campaigns start and stop running.

Understand your niche, winning ads

Understanding your niche and identifying winning ads is crucial for Facebook advertising. Not all products or services are suitable for advertising on this platform, and even those that are may not be profitable.

To achieve profitability, you need to understand your niche winning and apply specific skills to discover ads. I’ve shared extensive information on these concepts and strategies in my Facebook Ads Blog. Refer to them for further guidance.

Use A/B Test

A/B testing is one of the most valuable tools Facebook offers advertisers. It helps optimize costs even before you submit and launch your ads.

ab test button
A/B Test button

In Meta Ads Manager, simply click “A/B Test” and create two identical copies of your ad. The goal is to optimize costs, so change only one element between the copies.

For example, to optimize Ad Placements, make that the only difference between the two versions. This helps you identify placements that are both cost-effective and high-performing. Repeat this process for other elements to find the most effective options, or to determine the winning ad – the Ad Copy with the highest performance.

The Last Word

In summary, while Facebook Advertising Cost can be high and competition fierce, Facebook Ads remain an incredibly powerful and effective marketing platform. If you have a limited budget, you can start small and invest in learning valuable insights. 

On the other hand, if you’re confident in your budget, consider exploring Facebook Agency Account For Rent, a service offered by SpeedX Agency. We guarantee to maximize the value of every dollar you spend on advertising. Thanks for reading this and good luck with Facebook Ads!

Author

  • Phung Thai Hoc

    Phung Thai Hoc is a digital marketing expert (content marketing; social marketing; ppc;...) with more than 10 years of experience and founder of SpeedX Agency. He has successfully implemented hundreds of projects, each project bringing in 2 to 3 times more revenue than normal. In addition, he is also trying to share his knowledge with everyone to optimize marketing campaigns

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