Putting just $10 into Facebook advertising gets you about 17 clicks. Your industry, audience size, timing, and quality of your ad all affect Facebook advertising results. This guide will help you estimate Facebook advertising costs and give you some pro tips on setting up a campaign.
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Cost of Facebook Advertising
The short answer is $0.58 per click in the US. In other words, every $58 you put into Facebook gives you around 100 clicks on your ad, according to the Salesforce Advertising Index Q1 2016.
The long answer is that Facebook advertising cost in the U.S. can range from $0.31 to $0.61+ per click, depending on your industry, the size of your audience, the quality of your ad, and the time of year you buy your ads.
Here’s a look at how Facebook ad pricing varies in several industries:
U.S. Facebook Ads Pricing by Industry
|Consumer Packaged Goods|
Data from Salesforce Advertising Index Q1 2016
- Cost Per Mille (CPM) – the cost for 1,000 impressions, or views of your ad
- Click Through Rate (CTR) – percentage of impressions that result in a click
- Cost Per Click (CPC) – the cost for 1 click to your website
Consumer packaged goods companies pay the lowest amount for ads. This is likely because they target such a broad audience. The more targeted audience segments tend to cost more because you are leveraging more Facebook’s valuable profile data. So broad consumer targets can garner very large target sets without using as much specific profile data and they have a high click-through rate.
Gaming has the highest cost-per-click of the group. This is probably because gamers are a very lucrative market based on their age and purchasing habits. That’s also probably why they have a much lower click-through rate due to competition being higher given their value.
On the other end of the spectrum are professional services, like medical doctors and lawyers. These companies have a far more niche market. Thus, they have to compete to get their ad shown by paying higher prices.
Why Local Small Businesses Might Pay More for Facebook Ads
If you’re a local small business like a restaurant, the audience that you want to reach is much smaller than the entire country. It may be limited to a city or even a neighborhood within a city.
The great news is that Facebook enables you to target right down to the city or even zip codes. Your advertising will not be wasted on people that live 100 miles away from your business, like it might be with television, radio, or a regional paper. The bad news is that a small local audience may have many other local firms bidding for it, in addition to national advertisers that want everyone. So, you shouldn’t be surprised if your costs are closer to $1.00 per click.
Also, there is another reason why a local business may have a higher cost per click (CPC) than a national advertiser. Big advertisers spend a tremendous amount of time testing and optimizing their social media ads. If an ad’s not working well, they try another one. This increases their performance and brings the cost per click down over time. If social media marketing is a central part of your business, you can hire someone to optimize your Facebook ads and save on the cost per click.
Also, there is another reason why a local business may have a higher cost per click (CPC) than a national advertiser. Big advertisers spend a tremendous amount of time testing and optimizing their social media ads. If an ad’s not working well, they try another one. This increases their performance and brings the cost per click down over time. If social media marketing is a central part of your business, we recommend partnering with Hibu to optimize your social media campaigns. Click here for a free consultation.
Facebook Advertising: How to Set Your Budget & Bid for the Best Results
Next, we’ll get into the mechanics of Facebook advertising to help you determine your budget and set up your own campaign.
Facebook advertising has flexible pricing. You can spend as little as $1 a day, or thousands per day (there’s theoretically no upward limit).
Setting Your Budget
There are two different ways to set the price of a Facebook ad:
- Daily Maximum Budget – Your ad runs until your maximum budget is met each day. You can set a pre-specified number of days or leave your campaign open until you pause it.
- Lifetime Budget – Your ad runs continuously until a maximum total amount is reached, or the advertising end date that you specify arrives.
When you create an ad, you can select whether you want to apply a daily or lifetime budget. Facebook marketing experts have made an interesting case for why you should choose a lifetime budget: You allow Facebook’s algorithms to decide the optimal times to deploy your ad, rather than “force” them to show it a certain of times each day (as you would with a daily budget.)
That said, a daily budget gives you the most control, since you know exactly how much you’re spending each day. With a lifetime budget, your spend will vary from day to day. That said, both models can be adjusted or terminated at any time. Also, you can switch anytime during a campaign from daily budget to lifetime budget, and vice versa. So as long as you’re keeping a close eye, you don’t have to worry about unexpected charges.
Here are some more tips to keep in mind when setting your budget for a Facebook ad:
- Tip 1: A single Facebook account can have more than 1 advertising campaign associated with it. You can set up a global account spend cap for your entire Facebook account.
- Tip 2: If you create a Daily Maximum Budget campaign and don’t set an end date your ad will run forever, and Facebook will keep charging your credit card until the campaign is turned off. A better idea is to figure out how much you want to spend over a month or several weeks and make sure to set a fixed end date.
- Tip 3: It pays to experiment with pay per click (PPC) ads for free before committing to your ad spend. While Facebook coupons are a thing of the past, you can still get a $100 Bing advertising credit when you spend $25 to try your ads on Yahoo/Bing before moving onto paid ads on Facebook and other platforms.
Setting Your Bid
After setting your budget, the next step is to determine your bid. This is the amount you’re willing to pay for deployment of your ad and for it to be shown to users.
Facebook will automatically suggest a bid amount based on your industry and audience. This is usually a reliable estimate, so if you don’t feel like playing around with bids, you can leave this as is.
If you do want to adjust your bid amount, here are two important things to keep in mind:
1. CPC vs. CPM
On Facebook, you can pay for each action (i.e. somebody clicking your link), or you can pay for each time somebody views your ad. In digital marketing, these two concepts are denoted as follows:
- Cost Per Click (CPC) – the cost for 1 click to your website
- Cost Per Mille (CPM) – the cost for 1,000 impressions, or views, of your ad
If your goal is to encourage a certain action – such as getting people to click on your website – you should always select the CPC bid. This is because Facebook will show your ad to people who are more likely to complete that action. When you optimize for impressions, your ad may get shown to more people overall, but not necessarily those who will follow your link or “like” your page.
2. What Happens When You Bid Higher or Lower?
The other important thing to keep in mind is how adjusting the bid amount will affect your ad performance. When you advertise on Facebook, you compete with other advertisers who are trying to reach the same audience. The more competitive the ad, the higher your suggested bid.
Increasing the bid improves the odds of your ad getting shown. Consider doing this if your ad isn’t getting shown often enough to reach your daily budget.
Lowering the bid decreases the odds, though it also means you’re paying less per click. Consider lowering the bid if you’re easily reaching your daily budget and want to spread your dollars further. Just note that bidding too low may cease views of your ad altogether.
What Is The Cost Per Facebook “Like”?
Facebook provides the illusion that you can buy likes. When you click on the “Get More Page Likes” option, you are actually being charged for the number of impressions being shown (a CPM rate). Facebook is testing and trying to find the best audience to show the ads to that will produce the most number of likes for the lowest cost. Learn how to get likes for free.
Many people say buying likes or clicks to a Facebook page is cheaper than buying clicks to a website that is off the Facebook site. The difference in price by some estimates is as much as 30%. There could be two reasons for this price difference: Facebook prefers its audience to stay on its site and provides a financial incentive to advertisers to make that choice. The second reason is the audience doesn’t want to leave Facebook and may be more likely to click on ads which will keep them there.
How much will a like end up costing? Around $0.20 per like, according to a Hootsuite 2016 analysis.
Bottom Line on Facebook Advertising Cost
Facebook advertising does not have a fixed cost. Because users get to set their own budget (as low as $1) and bid on the price, the price all depends on how much you and your competitors are willing to spend.
Now, a better question is probably: What ROI can I get from Facebook advertising? Generally speaking, a budget of $10 should get you around 17 clicks. Some factors that affect it – like audience size and industry – may be out of your control. One thing you CAN control, however, is the ad the itself. To learn how to write a killer Facebook ad and set up an effective campaign, check out our article: Facebook Advertising: A How to Guide for Small Businesses.
And don’t forget, when you sign up with Hibu, they’ll create a personalized campaign for your page that has been proven to increase traffic flow and bring you better results. Click here to get in touch.