How much do Facebook ads cost?
If you’re new to advertising, social media marketing or just starting out online, you’ve probably wondered how much Facebook ads cost.
As an agency, Einstein Marketer is currently spending more than $500k every single month on Facebook ads.
An advertising spend like this has taught us a few lessons, so it’s fair to say that we know a thing or two about Facebook ad campaigns and the costs associated with them.
In fact, our media buyers and Facebook ad team could estimate the costs associated with a Facebook ad campaign pretty accurately after a 5-minute conversation.
Facebook Ad Cost Metrics
In this article, we’re going to keep things fairly general (because it would be impossible to cover every niche!) as we answer the question: How much do Facebook ads cost?
We’ll look at Facebook ad cost metrics like:
- Cost per click (CPC)
- Cost per mille (CPM) – aka Cost Per Thousand Impressions
- Cost per engagement (CPE)
- Cost per action (CPA)
By the end of this article, you’ll know what to expect from your Facebook ad campaigns, whether your current FB ad campaigns are performing well and what to expect as you take the plunge into paid Facebook marketing.
BTW: Use our Facebook Events Manager Guide to ensure that your campaigns are ready to track and optimise.
Why Facebook Ads?
Advertising on Facebook has proven to be one of the most cost-effective and highest ROI forms of digital advertising.
In fact, the only digital platform with a greater revenue from digital advertising, is the perennial internet giants, Google.
Marketers, brands and entrepreneurs are not investing heavily into the Facebook machine for no reason, and they certainly aren’t continually returning to Facebook advertising to burn cash.
Facebook ads make returns, no matter what your campaign objective, where you are in your businesses lifecycle, or your industry.
Just with anything else, Facebook ads require testing, refinement and optimisation, and the more experience and time you have to prime your FB campaigns the faster you’ll find a winning formula and the healthier those returns will be.
Facebook’s User Numbers
And as industry leaders, it makes sense for businesses and brands to use their platform to market themselves.
With such high user numbers, it’s clear to see the endless possible uses of Facebook ads.
That means that there simply isn’t a niche, location, culture or demographic of target audience that brands can’t reach.
Facebook’s market penetration in terms of population is startling too. In January 2020, it was reported that:
- 68.5% of the North American population were on Facebook
- 63.4% of the Latin America and the Caribbean populations were on Facebook
- 47.4% of the European population was an active Facebook user
- 54% of the Australian and Oceanic population is on Facebook
These sorts of usage stats and reach figures make Facebook ads a no-brainer, no matter how small your budget.
How Much Do Facebook Ads Cost?
The cost of Facebook ads depends on your campaign objective.
It’s impossible for me to give you one definitive answer or even a ballpark estimate of how much your Facebook ads will cost. This is because advertisers use Facebook for a variety of reasons and ad objectives.
The remainder of this article will be divided into sections to accommodate answers for all types of Facebook ad, including Facebook ads that:
- Drive traffic
- Generate leads
- Convert new customers
- Generate engagement
- Build brand awareness
- Create retargeting lists
Facebook Cost Per Click (CPC)
What Does Cost Per Click Mean On Facebook?
Cost per click measures how much of your budget you have spent to acquire a click from your Facebook ad campaigns.
For example, if you spend £100 on Facebook ads and generate 100 clicks, your cost per click cost is £1.
The Cost Per Click Formula:
Ad Spend ÷ Total Clicks = Cost Per Click
What is the Average Cost Per Click of a Facebook Ad?
A typical cost per click on Facebook varies between $0.30 – $1.5.
However, a higher spend per click is not necessarily a bad thing – as long as you’re making a profitable return.
Your cost per click on Facebook depends on the quality of your offer and linked content.
The better your offer, and the way that it’s presented, the more clicks you’ll receive.
A great ad creative (an image or video), tempting ad copy and a clickable headline and call-to-action are all important factors that should be tested.
The cost per click metric is found in campaigns focussed on website clicks, like:
If you’re marketing campaigns are focussed on these goals, CPC should play a part in your campaign analysis, optimisation and split-testing ideas.
Cost Per Mille (CPM)
What Does Cost Per Mille Mean On Facebook?
CPM is the metric that measures how much you spend on Facebook ads, for your ad to be seen by 1,000 users (ad impressions).
For example, if you spend £10 and your ad is seen by 10,000 Facebook users, your ad’s CPM is £1.
The Cost Per Mille Formula:
(Ad Spend ÷ Ad viewers) x 1000 = Cost Per Mille
What is the Average Cost Per Mille of a Facebook Ad?
A typical CPM for a Facebook ad varies between $5-$15.
Facebook use an advertising algorithm to decide how often your ad will appear on newsfeeds, this ultimately decides how high (or low) your CPM will run.
Their algorithm uses a variety of quality based metrics to decide how frequently and in what position your ad should appear. The better your quality score, the lower your CPM.
If you’d like to learn more about reducing your advertising CPM, check out our in-depth article about the Facebook Ad Algorithm.
CPM is best measured in campaigns that rely on reaching as many people as possible, including:
- Brand Awareness
- Video Views
Cost Per Engagement (CPE)
What Does Cost Per Engagement Mean On Facebook?
CPE is the metric that measures how much you spend on a Facebook campaign to obtain one form of engagement on your Facebook ad.
For example, if you spend £1 on your Facebook ad and it generates 5 likes, your CPE is £0.20.
The Cost Per Engagement Formula:
Ad Spend ÷ Engagement = Cost Per Engagement
What is the Average Cost Per Engagement Of a Facebook Ad?
A typical CPE for a Facebook ad varies between $0.10 – $1.
The cost per engagement of your Facebook ad is only an important metric if you’re running an engagement campaign, and even then, this cost should not be used as a defining feature of your success or failure.
A cost per engagement can mean a click, like, share or comment – the problem is that this metric doesn’t define whether the right person is engaging with your ad campaigns, or that their engagement is worth anything.
Likes are great for social proof, but they’re much more valuable when they’re gained organically from an engaged audience. Buying them with ads can be worthless when there is no strategy behind it.
Facebook engagement campaigns are a great way to draw attention to your brand and it’s content, but don’t measure its success on a metric like cost per engagement, measure it on the actions of the audience it reaches.
Do these people join your audience? Do they open a dialogue between yourself and your brand? Will they drive anything meaningful for your business?
Cost Per Action (CPA)
What Does Cost Per Action Mean On Facebook?
CPA is a metric that measures how much it costs your ad to generate a desired action from your target audience.
An action can be purchase, subscription, app download or other.
For example, if you spend £100 on Facebook ads and 10 people sign-up to your newsletter, your CPA is £10.
Cost Per Action Formula:
Ad spend ÷ Number of actions = Cost Per Action
What is the Average Cost Per Action Of a Facebook Ad?
CPA is also known as Cost per lead (CPL) or Cost per conversion (CPC), and it’s for that reason that it’s impossible for me to quote an exact figure for a Facebook ad’s cost per action.
Your cost per action varies depending on:
- Your offer
- Ad quality
These are 3 huge variables that offer unlimited possibilities.
Businesses that sell high volumes of low cost products will rely on a low Facebook CPA, whereas high-ticket sellers who make 1-5 sales per month, will have CPA’s that dwarf them, but still make a high return.
If you’re selling products straight from Facebook with a Conversions campaign, you’re only focus should be on your margin. If your CPA is lower than your margin, you’re onto a winner, if it’s not, you need to test, analyse and optimise.
However, if you’re running a lead generation campaign, our current campaigns (for our clients in a variety of industries) are costing between $0.5-$10 per lead – depending on industry and product.
The Real Cost of Facebook Ads
The real cost of Facebook ads depends on your experience with advertising, your knowledge of the Facebook advertising platform and your offer. After that, all you need to know is how to measure success.
Within this article we’ve covered Cost per click, Cost per mille, Cost per engagement and Cost per action – these four metrics are enough to cover almost any Facebook advertising campaign in any industry.
Just remember, these are averages and the costs of your Facebook ad campaigns are impossible to gauge based on historical ‘averages’.
Want more? Check out:
- 8 Facebook Ad Examples to Inspire Your Campaigns
- How to Scale Facebook Campaigns
- Facebook Page Likes: How to Get 1000s For Free!