Facebook ads have an average cost-per-click (CPC) of $1.86 and cost-per-thousand-views (CPM) of $11.20, which varies based on factors from ad quality to competition. While the average small business advertising on Facebook spends around $1,000–$2,000 per month, there is no minimum monthly ad spend, making Facebook affordable for most businesses.
It doesn’t matter how much money you spend on Facebook advertising if your campaigns are low quality. Don’t waste money on poorly designed and executed campaigns. Instead, get professional Facebook ad management with Lyfe Marketing to increase your return on ad spend and to meet your marketing goals. Talk to a Facebook Marketing expert today to learn more.
Facebook Advertising Cost Estimates
The average CPC for Facebook ads (across all industries) is $1.86 and the average CPM is $11.20; however, costs vary greatly. Businesses in industries with high competition or those producing poor quality ads will see higher CPCs. Facebook currently has a minimum daily ad spend of $1.
For example, a company in the apparel industry that uses Facebook to advertise their product catalog sees an average CPC of 45 cents. However, a life insurance company that advertises on Facebook has an average CPC of $3.77. The reason for the difference is largely related to user interest; social media users tend to use the platform for leisure, making apparel ads more enticing for most users. Life insurance ads, on the other hand, are not likely to be appealing.
FB Advertising Cost by Industry in 2019
Facebook advertising costs vary, though the overall average CPC is $1.86. The cheapest industry is apparel, with a 45-cent CPC; the most expensive industries are finance and insurance, with a $3.77 CPC. While CPCs vary greatly, refer to industry benchmarks below to get an idea of your potential Facebook advertising cost-per-click.
Average Facebook CPC & Other Benchmarks by Industry in 2019
|Employment & Job Training|
|Finance & Insurance|
|Travel & Hospitality|
Types of Facebook Advertising Costs
There are currently five different cost structures for Facebook ads: cost-per-click (CPC), cost-per-thousand-views (CPM), cost-per-view (CPV), cost-per-action (CPA), and cost-per-like (CPL). CPC is the most common, though advertisers should choose the cost structure that’s best for them based on their ad type, Facebook marketing objectives, and overall advertising goals.
Facebook Cost Types
|Cost Structure||Advertisers Are Charged…||Best For|
|Cost per Click |
|For every click an ad receives||Advertisers pushing users to a landing page|
|Cost per Mille |
|Every time an ad receives 1,000 impressions||Advertisers looking to increase brand awareness|
|Cost per View |
|For every view a video ad receives||Advertisers with powerful messages looking to capture users’ attention with a video|
|Cost per Action |
|When a user takes an action, such as an app install||Businesses that want link clicks for anything from app installations to event registrations|
|Cost per Like |
|When an ad yields a page like||Those wanting to promote a Facebook business page|
The cost-per-click pricing model charges advertisers only when a Facebook user clicks their ad, so it best serves businesses with the goal of encouraging users to click away from Facebook to their website or landing page. Advertisers set the call to action (CTA) that a user clicks on, which includes many options from “Learn More” to “Shop Now” and “Sign Up.”
The average CPC on Facebook ads across all industries is $1.86, with CPCs by industry ranging from as little as 45 cents for apparel to $2.72 for employment and job training. Facebook is known for being one of the more affordable pay-per-click advertising platforms. For reference, the average CPC on Google Ads is $2.69, with many CPCs over $5.
Cost-per-mille (CPM) pricing charges advertisers based on every 1,000 impressions, or times the ad was displayed. CPM is often a lower-cost alternative to CPC ads. However, since impressions do not necessarily equate to user interactions, they are best used for advertisers using Facebook ads with the goal of growing brand awareness.
The average CPM on Facebook ads across all industries is $11.20. This equates to just 1 cent per impression. This will vary based on your chosen audience and the competition level for that audience. This means your CPM may be very low if there is little competition for your target audience, or expensive if there is a lot of competition for your target audience.
The cost-per-view pricing model is designed for video ads and charges advertisers every time their video ad is watched by a Facebook user. It is a good option for advertisers with a powerful message best presented in a video. Keep in mind that a video only has to run for three seconds for Facebook to consider it a view; this may not be enough time to convey your message. If you need more time, consider a different pricing structure to help you achieve your ad goals.
The average industry CPVs on Facebook ads are between 1 cent and 15 cents. As with all types of Facebook advertising costs, this may vary greatly from business to business. Since it’s difficult to gauge the effectiveness of a CPV cost structure, consider using your click-through rate (CTR) as an indicator of your ad’s effectiveness.
Cost-per-action is similar to CPC with a key difference: Rather than being charged when a user clicks your ad’s CTA, advertisers are charged when users take a certain action on their website. Advertisers set the action they want to be charged for, and actions can include anything from newsletter sign-ups to app downloads and online purchases tracked via the Facebook pixel. This is typically the most expensive pricing model.
The average CPA for Facebook ads is $18.68. The CPA cost structure has a very wide range of averages, from the education industry at just $7.85 to technology at $55.21 per action. To be cost-effective, make sure the value of your audience’s action is at least (or more than) than the CPA; otherwise, your campaign will yield a negative return.
Cost-per-like pricing is similar to CPC, but with the CTA set to “like” your business’ Facebook page. It is typically low cost, and is best for businesses that are new to Facebook and looking to build brand awareness. It’s also worth noting that those using a CPL should plan to be very active on their business page. Otherwise, paying for likes won’t increase engagement; Facebook business pages are only effective if they are used consistently.
The average CPL for Facebook ads is between 12 cents and 16 cents. While these are considered very low, keep in mind that CPL does not yield the direct revenue of, say, a CPA, so the low price correlates to the lower value result.
Factors That Influence Facebook Advertising Cost
Facebook uses an algorithm to determine if and when an ad will display, and what price will be charged for the ad. Many factors are considered as part of that algorithm, though Facebook ultimately chooses to display ads that it believes will promote user engagement. Factors include your audience targeting, bid amount, competition, ad objective, ad type, ad placement, ad schedule, and ad quality.
Facebook ads are displayed to users based on comprehensive audience targeting parameters. This differs from a search ad platform like Google, which relies on keyword targeting instead. There are hundreds of audience targeting options on Facebook, allowing advertisers to pinpoint exactly who their ads will display to. This includes demographic information, user interests, life events, and user behavior. Learn more about Facebook ad targeting.
Facebook bidding is the process by which an advertiser sets how much they are willing to spend for a user to click or like an ad, or take a specified action. Unlike other pay-per-click platforms, such as Google Ads, Facebook Ads is not based on a keyword bid. Instead, audiences are created by the advertiser during the ad setup process. They then set a bid for their chosen pricing structure and audience (CPC, CPM, CPV, CPA, or CPL) to determine ad cost and reach.
Facebook Ad Objectives
Facebook ad objectives are the overarching marketing goals advertisers have to choose from when creating their ad. Ad objectives include awareness, which focuses on promoting a brand; consideration, which encourages user engagement; and conversion, which entices users to buy a product or service. Generally, the higher the revenue an advertiser is likely to get from an ad objective, the higher the ad cost will be.
Facebook Ad Objectives
|Main Objective||Specific Objective||Outcome|
|Awareness||Brand Awareness||To get people familiar with your business|
|Reach||To maximize the number of people who see your ad|
|Consideration||Traffic||Increase the number of visits to your website or Facebook business page|
|App Installs||Increase the number of installs of your app|
|Engagement||Get more people to interact with you on Facebook|
|Video Views||To maximize the number of views a video receives|
|Lead Generation||Collect a user’s information, such as an email address, in exchange for valuable content|
|Messages||Get people to start conversations with you on Facebook|
|Conversions||Product Catalog Sales||Advertise items you have for sale|
|Store Visits||Promote your brick-and-mortar business to a local audience|
|Conversions||Get people to make a purchase on your website|
Remember that Facebook Ads work like an auction, wherein a number of businesses are competing for the same advertising space. As with any auction, the amount of competition will directly affect the price. The more advertisers competing for the same audience and ad placement, the higher the advertiser’s costs will be.
Facebook Ad Placements
There are a number of Facebook ad placement options, both within Facebook and on partner sites like Instagram. The most common ad placements are on a user’s Facebook feed, in the Facebook right column, on a user’s Instagram feed, and within Instagram stories. See all available Facebook ad placements.
Ads that are well targeted with messaging and media that speak to their audience and provide them value will rank higher than ads that don’t. For example, ads with blurry images see very little user interaction even if the ad otherwise conforms to Facebook ad specs. Increase ad quality by using compelling copy and high-quality images, along with relevant landing pages and audiences that are likely to interact with your ad.
“There are things we can do as advertisers to ensure that we are paying a great price for highly qualified prospects. Things like Relevancy score (which is calculated using expected engagement) determine how much your bid will be, and you can use automated Lowest Cost bidding to get in front of people who will convert at a fair price.”
— Tony Palazzo, Vice President of Operations & Marketing, Logical Position
How the Facebook Ad Auction Affects Ad Cost
Facebook uses an auction-style pricing process, similar to Google Ads, to help determine how much an advertiser pays for their ads. To determine which competing advertiser gets their ad displayed, Facebook also considers overall ad quality. Facebook looks for ads that they deem the most relevant to users, and, therefore, most likely to enjoy high engagement. Generally, ads with the highest ad quality and bid will be placed.
Facebook looks at these factors to determine which ad will land on Facebook:
- Bid: Which advertiser is willing to pay the most?
- Ad relevance: Which ad best serves its targeted audience?
- Projected ad success: Which ad is most likely going to get the most conversions or engagement?
To get your ad to display, start with a competitive bid—based on the figures listed at the start of this article—and a highly targeted audience with ads tailored to that audience. Once your ad is live and Facebook sees that users are engaging with your ad, Facebook will consider the ad’s high quality and may reduce price while increasing reach. Learn how to create a Facebook ad in our article on Facebook advertising.
How to Estimate Return on Ad Spend (ROAS) in 5 Steps
Estimating your return on ad spend (ROAS) can help you budget for your ad campaign and maximize revenue. To calculate your ROAS, we recommend starting with a CPC pricing structure. Determine likely monthly clicks by dividing your ad budget by your industry’s CPC. Then, multiply your monthly clicks by your average conversion rate to find your number of new customers per month. Multiply that by estimated customer value to get revenue.
Here’s how to calculate your estimated return on ad spend in five steps:
1. Find & Collect Your Data
Start by finding and collecting all of the figures you need to calculate your ROAS. Refer to the Average Facebook CPC by Industry table found at the top of this article, and find your industry’s average CPC, click-through rate, and conversion rate. Additionally, you will need to know your estimated customer lifetime value (or CLV).
What you will need to calculate ROAS:
- CPC (or other pricing structure): How much does each click cost?
- Monthly ad spend: How much do you anticipate spending on advertising each month?
- Conversion rate: What percent of monthly clicks become customers?
- Customer lifetime value (CLV or CLTV): What is the net profit attributed to each customer over the entire duration of their relationship with your company?
2. Calculate Your Estimated Monthly Clicks
To calculate your estimated monthly clicks, divide your monthly ad spend by your average CPC to find the total number of clicks you will receive per month. Your estimated monthly clicks represent the average number of people your ads are actively connecting with each month.
For example, let’s say your business is in the fitness industry and your monthly ad spend is about $800. Per the table above, your industry’s CPC is $1.90. That would equate to 421 clicks per month.
Equation: Monthly ad spend CPC = Estimated monthly clicks
Example: $800 / $1.90 = 421 clicks
3. Estimate Your Monthly Acquired Customers
To estimate how many customers you are acquiring each month from your ad, multiply your number of monthly clicks by your conversion rate. Your conversion rate is more important than the number of clicks you receive per month, as it is more indicative of an ad’s overall performance.
Continuing the example above, let’s say your average conversion rate is 14.29%. Considering monthly clicks total 421, that would mean you’re acquiring 60 new customers per month.
Equation: Monthly clicks average conversion rate = Number of customers acquired per month
Example: 421 x 14.29% (or 0.1429) = 60 new customers acquired per month
4. Estimate Your Ad’s Potential Revenue
To estimate the potential revenue expected to be generated by your ad, multiply the number of new customers acquired per month by your average customer’s lifetime value (CLV)—or how much a new customer is worth to your business in sales in the long term—to find your estimated revenue.
In the case of the fitness business above, the CLV is estimated at $100. Multiplied by 60 customers, this means that the fitness business is generating $6,000 in new revenue every month from ad spend.
Equation: Number of new customers x Customer lifetime value = Revenue generated
Example: 60 x $100 = $6,000 revenue generated from your monthly ad spend
5. Determine Return on Ad Spend
Subtract your monthly ad spend from the revenue generated to find your estimated return on ad spend. Effective advertising should yield a profit. If you’re not at least breaking even, you may want to seek professional account management, such as Hibu, or allocate spend to other advertising channels.
As the final piece of the fitness business’ ROAS calculation, we would need to subtract $800 in ad spend from the $6,000 in total revenue to determine total profit (or return on ad spend). That comes to $5,200.
Equation: Revenue generated monthly ad spend = Estimated return on ad spend
Example: $6,000 – $800 = $5,200 return on ad spend per month (or $62,400 per year)
Every business will see varying returns on ad performance. Get more detailed information about calculating return on ad spend and how to measure ad spend in our article Return on Advertising Spend (ROAS).
Frequently Asked Questions (FAQs)
What are the Facebook ad specs?
Facebook ad specs vary for every ad and media type. For example, the size for a single image ad is 1,200 x 628 pixels with an image ratio of 1.9:1. Get detailed ad specs for every ad type from image ads to carousel ads by reading our complete list of Facebook Ad specs.
What is the Facebook pixel?
The Facebook pixel is a snippet of code that can be easily added to your website to track visitor behavior. If you are looking to gain more insight into user behavior for future ad campaigns—and have access to your website’s code—then you would be a good fit for the Facebook pixel. See how you can use the Facebook pixel by reading our article Facebook Pixel: What It Is & How to Use It.
Which is cheaper: Google Ads or Facebook Ads?
CPCs tend to be lower for Facebook Ads than Google Ads, but what you need to keep in mind is that user intent is different on each platform, as well as click-through and conversion rates. Facebook may be cheaper, though Google users are more likely to make a purchase or take an action after clicking on a search ad. Learn more by reading our article on the differences between Facebook and Google ads.
What are the best ways to target Facebook ads?
Facebook offers a number of great targeting parameters, from life events to interests and behaviors. Every advertiser will use these targeting options differently to create exact audiences that match their ideal customer. Learn more about the top ways to target Facebook ads and how you can use them to create your perfect audience in our article Top 7 Facebook Ad Targeting Options.
Where can I find a Facebook ad management service?
Choosing to use a Facebook ad management service is often a smart move, especially if you’re a new advertiser struggling to understand the Facebook ad platform. However, there are many management services available and it can be hard to pick the right one; to help, we recommend reading our article on the six best Facebook Ad management services.
Facebook ads are generally considered affordable with an average CPC of $1.72 and an average CPM of $11.20. To manage these costs, advertisers can set their own budget. Given this flexibility—and the incredible audience targeting the platforms affords—Facebook is ideal for advertisers with a clear understanding of their target audience.
Keep in mind, however, that the success of Facebook ad campaigns comes down to strong strategy. Try a professional Facebook ad management company, such as Lyfe Marketing, to create a campaign that converts, so your business can get more paying customers and increase your return on ad spend. Talk to maximize your return on investment. Get started today.