How Much Do Facebook Ads Cost in 2022?
April 29, 2020
With more than 2.89 billion monthly active users, Facebook is currently the social media market leader worldwide. For years, it has been a profitable platform for companies to create awareness in front of new consumers and convert them into regular customers.
Facebook also ranks as the platform with the most even distribution of users as compared to other social media networks, like Instagram and LinkedIn. This means Facebook advertisers can easily target several segments of users with their ads. Undoubtedly, Facebook ads can be a real breakout opportunity for your brand if you correctly place them.
So whether you’re just stepping into Facebook marketing or looking for ways to make the most out of your advertising budget, you need to understand all the ins and outs of Facebook advertising costs. This is the only way to keep the costs low and yield better results.
In this guide, we will discuss how much are Facebook ads going to cost your company, along with some factors affecting the costs.
How Much Does Facebook Advertising Cost?
Facebook advertising costs depend on your bidding models, like cost-per-click (CPC), cost-per-thousand impressions (CPM), or average cost per engagement (CPE). For Facebook ads in 2021, the CPC is $1.12, the CPM is $15.86, and the CPE is $0.139. Similarly, if your ad campaign is based on earning likes or app downloads, Facebook charges different costs for both.
Let’s break down the costs of Facebook ads for each bidding model.
According to stats by Revealbot, the average Facebook ads cost for CPC across all industries and campaign objectives was $1.01 in July 2021.
The average Facebook ads cost for CPM across all industries was $12.9 in July 2021.
Similarly, the average Facebook ads cost for CPE across all industries was $0.114 in July 2021.
On average, Facebook ad campaigns targeted to increase likes or app downloads may pay $1.07 each like and $5.47 each download.
However, these costs are expected to rise in 2022. As of December 2021, Revealbot tells us that the Facebook CPC cost for all industries averages around $1.12.
Similarly, the average Facebook ads cost for CPM across all industries has become $15.86.
On the other hand, the Facebook ads cost for CPE across all industries now averages $0.139.
Apart from the bidding model, Facebook advertising costs can vary by many factors such as the industry, your ad placement, ad quality, target audience, and seasons. But, typically, you can expect your Facebook ad costs to be between $0.50 and $2.00 per click.
AdEspresso also assessed around $300 million of Facebook ad spend and confirmed $0.97 to be the average cost per click. Since these figures are averages, your business may experience costs higher or lower than the averages discussed above. It’s better to use these figures just for reference and not as a standard for Facebook ads costs.
What Makes Facebook Advertising Worth Spending On?
A brand can’t promote its products and services in this digital marketing era without using social media platforms. Where advertising on social media has its advantages, Facebook significantly takes the lead over other platforms. Apart from its immense popularity, this social networking site is super-affordable and helps you target a range of consumers.
Many companies wonder: Is Facebook advertising worth spending money and time on? Let’s find the answer in this section.
A Wide Range of Active Users
Facebook is leading the world of social media with more than 2.89 billion active users. The social networking sites following Facebook are Youtube with 2.3 billion, WhatsApp with 2.0 billion, Instagram with 1.3 billion, and TikTok with 7.3 million.
Not only that, but Facebook also has the most even age distribution of users compared to other popular social media platforms. This suggests that you can target a wide range of age groups with your ads.
Facebook can provide businesses with a larger target audience that marketers can easily distribute into different segments and target their ads accordingly.
Precise targeting is directly proportional to reduced Facebook ads cost
For instance, if you are a women’s apparel company, you need to mostly place your ads in front of women. Similarly, if you are a children’s toy producer, you need to primarily reach out to the parents. The good news is that Facebook advertising lets you do that easily. In addition, you can also target consumers area-wise as well. Many other demographics — like gender, interests, age, preferable device, and location — matter a lot when launching your ad campaign on Facebook.
Flexible Budgeting Options
Facebook ads are very flexible. Advertisers can easily adjust them according to their company’s budgets. Generally, the platform offers two types of budgeting to cater to different advertising strategies:
- Lifetime budget: This is preferable when advertisers run ads on a specific schedule or a fixed budget.
- Daily budgets: These are good for advertisers working with a fluctuating budget or wanting to maximize ongoing ad campaigns.
Facebook offers a wide range of cost-effective ad options for every business type. Even if you spend $10 a day, it will benefit you at the end of the day one way or the other. Additionally, Facebook also offers testing, reporting, and remarketing features that help you maximize the money you have invested in your ads campaign.
The difference is very clear if we compare the Facebook ads cost with other advertising platforms. In 2021:
- Twitter ads cost $0.38 per click
- Facebook ads cost $0.97–$1 per click
- Instagram ads cost $3.56 per click
- LinkedIn ads cost $5.26 per click
Factors Affecting the Facebook Ads Cost
Several factors can increase or decrease your Facebook advertising costs. Some of the major factors include the following.
Facebook advertising costs typically vary depending on the type of your industry. Although the average cost stands at $1.12, you can forecast your required advertising budget by looking at the average price of your industry. This will help you develop a better social media marketing campaign to generate more leads and drive conversions.
In 2021, the average CPC for different industries was estimated to be:
- Apparel: $0.45
- Auto industry: $2.24
- B2B: $2.52
- Beauty: $1.81
- Consumer services: $3.08
- Education: $1.06
- Employment and job training: $2.72
- Finance and insurance: $3.77
- Fitness: $1.90
- Home improvement: $2.93
- Healthcare: $1.32
- Industrial services: $2.14
- Legal: $1.32
- Real estate: $1.81
- Retail: $0.70
- Technology: $1.27
- Travel and hospitality: $0.63
Ad Campaign Objectives
When designing the funnel of ad campaigns, marketers and advertisers put their desired goals or objectives as per their value for the business. These objectives play a major role in determining the cost of your ad campaigns.
For example, if you are planning to create brand awareness or engagement, it will cost you less than driving conversions leading to sales. That’s because it’s easier to let people engage with an ad than to persuade them to make purchases.
Target Audience Size
Brands targeting larger audiences usually have to pay more than those focusing on smaller audiences.
The audience targeted in lower-funnel or retargeting campaigns tends to be more precise and smaller in size than the upper-funnel or prospecting campaigns. For this reason, targeting the former group of audience costs more than the latter one.
Your Brand’s Daily Budget
Facebook algorithms are typically hard to understand for newbie advertisers. What they must know is that if they are on a lower daily budget, Facebook’s algorithm may take longer to get out of the “learning period.” It is the phase during which Facebook’s algorithm learns from any recent update or changes someone makes to their ad campaign.
Due to this, costs for new ad campaigns are mostly higher because the platform’s system needs to understand how your target audience responds to your ads and how it can optimize them to provide you with high engagement. If your ads are already well-engaged on Facebook, you may get lower ads costs.
Click-through rate (CTR) also affects Facebook advertising costs. It is the ratio between the users clicking on a page’s link and the total number of users viewing it.
If you plan a website traffic campaign with low CTR, Facebook ads may cost you higher as the system understands some sort of disconnection between your ad’s message and your target audience. Thus, the higher the CTR, the lower the CPC for a campaign will be. Typically, a healthy Facebook CTR is approximately 2%.
Another factor that impacts Facebook advertising costs is the ad’s relevance score. Advertisers must design their ads according to the users’ expectations and target them relevantly. Advertisers can easily attain higher relevance scores and avail lower costs when ads deliver such value.
In an AdEspresso study, two versions of similar ad campaigns were tested. One version had a relevance and engagement score of 2.9 and the other had 8. They found that the average CPC on Facebook for the former version was $0.14, while the latter had an average CPC of $0.03.
How is the relevance and engagement score estimated? Facebook rates your ad between 1 and 10, with 1 being the lowest possible score and 10 being the best possible score. These scores are assigned based on the feedback you receive on your ads.
The Facebook advertising costs tend to increase temporarily as soon as a particular season arrives. Moreover, the competition increases around holiday seasons as brands raise their budgets to get more impression share, especially in the ecommerce industry.
Therefore, if you are in a similar industry, you need to consider these seasons while planning your ad budget. However, if you are neither in the ecommerce industry nor planning annual promotions, you can formulate your strategies to sustain yourself in the market during these seasons.
How To Minimize Facebook Advertising Costs
If you are already advertising on Facebook and looking for efficient tips to lower the costs, here is what you can do.
Formulate a Full-funnel Campaign Strategy
A full-funnel strategy defines and prioritizes your objectives and makes it easier for you to focus on things that matter. In general:
- Brand awareness and engagement campaigns are put at the top of the funnel
- Consideration campaigns are suited for the middle part
- Conversion campaigns are aligned at the bottom of the funnel
The best way to implement your full-funnel ads campaign is to start from the top of the funnel to reach out to more audiences. These campaigns usually have the lowest cost. Then, you can take one step ahead and work towards conversion campaigns that drive conversions.
Always Use the Automatic Placements Setting
Although Facebook gives you the autonomy to choose where your ads will appear, you should just let Facebook choose it for you by default. You can do that through the Automatic Placements setting.
When you allow Facebook to do so, the platform evaluates where your ads can perform better and eventually lowers the cost. Moreover, your learning period will also end quicker, which means you can then move forward to applying cost-efficient and optimizations.
Evaluate Your Ads Through Facebook A/B Testing
A/B testing different variables of your ad campaign can help you better understand what works for you. The key is to test one variable at a time, like text, headline, landing pages, videos, or images. Keep in mind to stay continuous with the testing, learn from the errors, identify the gaps, and improve them to yield better results.
Evaluating your ads through A/B testing not only lowers the costs but also helps improve your CTR and user engagement.
Facebook is definitely an ideal platform to begin your brand’s online advertising campaign with its popularity and user-friendly interface. However, you need to make up your advertising budget beforehand and plan your campaigns accordingly. For most companies, Facebook advertising is all about profitability. They get high click rates, increased conversions, and more engagement without paying tons of dollars for the advertisement.
What are your views about Facebook advertisements? Are you planning to market your brand through Facebook? If so, contact Disruptive Advertising. We’ll help you decide whether it’s the right decision for your business or not!