If you’ve ever wondered how much Facebook ads cost, if anyone has ever told you how they spend N1000 and N5000 on adverts, then you must know by now how tricky this question is. And depending on who you’re asking, you definitely will get a tricky answer that might leave you feeling more confused.
The truth about Facebook ads cost is that Mark and his team made it as simple as going to the kiosk down the street and buying either a big tin of milk or a small sachet of milk. And we both know that while the big tin can last you a month, the small sachet can get you only 1 cup of tea. Doesn’t go more than that.
So if you put aside N1000 as your Facebook budget, so be it. Facebook will never charge you more than that. However, you need to ask yourself these questions,
How long do I want my advert to run?
How many people will it reach?
How much should I spend to achieve this?
Will it deliver the kind of result I want?
The above questions are what we will be answering in this article.
First, you need to know that Facebook doesn’t charge you a flat fee. It charges you on a pay per click and/or a pay per result basis from your planned budget. If anyone clicks your advert link, like your advert, comment on your advert, or share your advert, you get charged for the various actions and this charge is deducted from your budget.
So while I cannot tell you exactly how much Facebook ads cost, the below benchmark will go a long way in guiding you.
A report from AdEspresso’s study on Facebook ads Cost from 2016, shows that;
The Average Cost Per Click (CPC) on Facebook is about $0.35 globally, but for adverts from the US, it is about $0.28.
The average cost per like for an Ad is $0.23 in the U.S.
The average cost per app installation is $2.74 in the U.S.
Does this mean that you should make your budget heavy? Not necessarily. Sometimes, businesses or individuals with a bigger budget might not have a successful Ad when compared with what some businesses and companies with a lower budget, achieve.
According to Facebook:
When showing ads, we try to balance two things:
- Creating value for advertisers by helping them reach and get results from people in their target audiences.
- Providing positive, relevant experiences for people using Facebook or/and Instagram.
1. Creating Value for Advertisers
Now Facebook achieves this by holding an auction, where both the interests of the advertiser and the target audience are met. Advertisers will reach the exact people they want to reach, and users will see the exact kind of ads they are interested in.
So you see, the best ad result isn’t about how big your ad budget is, it is about the value you’re giving to your audience. The better the value, the better the response.
Billions of adverts from both big and small businesses go out every day. Facebook has different locations where they show your ad to its users. If one of these locations becomes free, then those who have placed their ads will have them batched by Facebook, and then they hold an auction. The winner of the auction will have their ads placed in the vacant spot, to help them reach more people.
This auction for advertising space is not won by having a huge budget. It is won by ensuring your ad has good value for your target audience.
Facebook determines your ad value with these three factors:
- Advertiser bid – This is all about how interested you are in showing your ad.
- Ad quality and relevance – This is determined by how interested Facebook thinks a person will be when they see your ad.
- Estimated action rates – This is determined by how likely Facebook thinks a person will click on your ad and take the necessary action.
Now the interesting part is that, once the auction is won, Facebook will charge the winning ad a minimum amount. You won’t be paying the maximum amount.
A. How interested are you in showing your ad? (Your Bid)
The amount you bid for your auction is what tells Facebook how serious you are about advertising. When creating your Facebook advert, you can either set your bid to automatic, or input it manually.
If you choose automatic, Facebook will do it’s best to maximize your ad reach and result, so that you get the best from your ad.
If you choose the manual bid, you’re telling Facebook the exact amount to use to ensure you get what you want. But if you bid too low, you won’t get the exposure and result you want. Feel free to bid high. You might still end up paying the lowest amount.
However, I usually say it is better to use the automatic bid.
B. What is Your Ad Quality?
How interested will your target audience be when they see your ad?
Facebook provides relevance score metrics in your Ad Manager. If your ad relevance score is high, Facebook will help you reach more of your target audience while paying less.
C. What is Your Ad’s Estimated Action Rates?
Will your target audience take action on your ad?
Facebook measures this by using previous actions of your target audience on similar ads. For example, If you are advertising wigs, Facebook will check your target market to see how they responded to previous wig adverts. Did they view the ad? Did they click through to make a purchase?
If your estimated action rate is low, Facebook will charge you more, to help you win the bid and reach more people. So that even if the response is low, with more reach, you might get what you want out of your ads.
2. Who and how many people you are trying to reach
Who do you want to target? Are there so many other people who will fit the profile of this person?
Knowing who you want to target and how many of such people you want to target will influence your Facebook cost. The reason is simply that a lot of people are fighting for the attention of this same audience. If there is strong competition for that audience, Facebook will charge you more.
The location of your target audience also plays a big role in deciding how much Facebook will charge you.
For example, if you’re in Nigeria you will pay more if you target a US audience, than when you target an audience in Namibia, Nigeria, or Ghana. If you’re in the Us, you will pay less if you target US audience.
Outside of location, other details that might affect your advertising budget are;
More specific demographics, interests, or behaviours
Connections (with your Facebook Page, app, or event)
It is always best to experiment with different audiences and find the one that works best for your business.
3. National/Global Events. Time of the Year.
Certain national/global events come up yearly. Like Valentine, Easter, Mother’s day, children’s day, Christmas, Muslim celebrations, independence day celebrations etc.
During these events, a lot of businesses have goods and services they sell to make the event fun and memorable. But since there is a tough competition for the budget people have put aside for the celebrations, a lot of businesses run adverts so they can be in front of these people and get their share of the budget. In times like this, Facebook ads cost go up, so you need to increase your budget.
4. Placement of Advert.
Facebook has made placement a sweet thing to see. It excites you because you know your advert will reach a lot of people, whenever they are on Facebook.
Below is a list of some of the locations where Facebook will display your ads;
Facebook’s desktop News Feed
Facebook’s desktop right column
Facebook’s mobile News Feed
Instagram’s mobile News Feed
Video Streaming Feed
When you allow Facebook to place your ads in all these places, it can reduce the average cost per result. This means you spend less for more reach.
5. Return on Investment (ROI).
When you run Facebook ads, you’re doing it for one reason only. To get results in your business. The result you get is broken into 2.
1. Return on Investment (Finance)
This is done by businesses/individuals who want to make sales. So you run an advert that should help you sell to your target audience.
If you spend 5000 for this advert and 10 people buy your product at 3000 per person, it means you made 6 times return on investment.
But if you sell nothing, then you make no return at all.
So if you’re advertising this same product or service during the holidays, you will need to pay more if you want to see returns. If your sales skyrocket, great. Keep at it. If it falls, then you should pause your advertising so that you do not completely lose out.
2. Return on Investment (Social)
Social return on investment means getting your target audience to engage with your posts or/and follow your page.
For this sort of advertising, you need not spend so much, as likes, comments, shares and follows are easy to get if you have a catchy advert.
So How Much Does Facebook Advertising Cost?
With all the above listed, it is fair to say you now know that your Facebook advertising Cost is decided by what you want to achieve.
I have used between N1000 to N6000 for a week of Facebook advertising. Each of these adverts had different end goals and brought in different results. In total, I have spent approximately N45,000 (total figure) on ads. If I needed to advertise more regularly, it would have been way more.
Just remember that Facebook wouldn’t charge more than what you want it to charge, and having a huge budget doesn’t necessarily guarantee ad success. Having an advert that offers value to your target audience is what ensures the success of your advert.