Is Facebook advertising still a good investment in 2022?
The Facebook platform and group of apps has become one of the most trusted advertising mediums around, with over 10 Million active monthly advertisers using the platform it’s no wonder why ad costs consistently rise on a yearly bases.
The questions on most business owners’ minds today are if the Facebook platform and group of apps is still a viable option for business expansion, if their current marketing campaigns are underdelivering and what they can do about it
Below we will break down exactly:
- How much Facebook Advertising will cost you in 2022.
- What Determines the cost of Facebook advertising.
- How to get cheaper results from your Facebook Ads.
If you’re ready for some knowledge bombs sit down, relax, and maybe grab some popcorn because this about to change the way you look at your Facebook ads forever.
How much should Facebook advertising cost?
Facebook bills advertisers based on two metrics: cost per click (CPC) and cost per mille (CPM)—otherwise known as cost per 1,000 impressions.It’s hard to benchmark ad costs since there are so many variables in play. However, research suggests that advertisers should expect to pay:
- $0.98 (R15) per click
- $12.07 (R180) per 1,000 impressions
Average CPC for Facebook ads
The average CPC on Facebook is $0.98 (R15) making it less expensive than advertising on LinkedIn, Instagram, or YouTube.
Average CPM for Facebook ads
Many online stores use Facebook as a platform to build brand awareness. That’s sensible—the app boasts 2.8 billion monthly active users, many of whom use the social media platform to engage with their favorite brands.
If reach and awareness are your goals, expect to pay $12.07 (R180) to reach 1,000 people through the Facebook app.
What determines your Facebook ad cost?
Like pay-per-click (PPC) advertising costs on Google Ads, a variety of factors impact your Facebook advertising costs. If you want to build a realistic budget for your business, then you need to understand how these factors influence the cost of Facebook ads.
The eight factors that determine how much Facebook ads cost include
- Audience
- Auction
- Ad Objective
- Season
- Industry
1. Audience
An in-depth study by AdEspresso on Facebook advertising costs revealed that your target audience has a significant impact on the prices of your Facebook ads. Whether you’re focusing on a specific age, gender, or interest, you can expect a shift in your ad expenses.
For example, if your ad campaign targets women, your CPC may increase by $0.55 (R8.25). That’s $0.15 (R2.25) more than if your ad campaign targeted men. When you look at age, ads that target individuals 55-65 years or older tend to have substantially higher costs than campaigns focusing on users 25-34 years old.
That’s because Facebook only has 26 million users between the ages of 55 and 64. While that may seem like a high number, it doesn’t come close to the more than 58 million people (between the ages of 25 and 34) that use Facebook.
When you advertise on Facebook, you can also target specific interests or audience attributes, including
Outdoor recreation
Meditation
Philanthropy
College football
Commuters
And more
This useful feature can impact how much it costs your business to advertise on Facebook, as you may target high-value attributes or broad interests. For example, if you target frequent travelers, versus frequent international travelers, you have a broad audience that may incur additional expenses.
While high-value attributes can help you reach your specific market, broad interests can inflate your target audience with low-value users. Since these users often click on your ads, but don’t act on your calls-to-action (CTAs), targeting them can result in a low-performing campaign.
Focus your campaign on the people that matter and offer the most value to your business. You don’t want to pay for clicks or views that offer zero value when it comes to your long-term goals, like driving a sale or generating a lead.
2 . Auction
Despite what you see in your news feed, Facebook doesn’t want to overload its audience with adverts. There are limited advertising placements for businesses to sponsor across Facebook and Instagram.
To determine which advertiser wins the spot, Facebook’s advertising algorithm enters them into an ad action.
Every advertiser submitting their campaigns competes for a specific ad placement in front of their target audience. If two beauty brands are reaching millennial women in the news feed, for example, they compete in the auction together.
Price isn’t the only factor taken into consideration when deciding on an auction winner. To award the ad spot, Facebook determines an ad’s total value—in other words, how much the target audience would like or engage with the ad.
The algorithm looks at ad quality (including previous feedback) and estimated action rates (how many people will take action—like, share, or comment—on the ad). The campaign that ticks these three boxes the best has the highest value and wins the ad space.
3 . Ad Objective
When you create an ad on Facebook, you need to choose one of the following main ad objectives
1. Awareness
2. Consideration
3. Conversions
In most cases, more valuable ad goals, like a store visit or product purchase, lead to higher ad costs. That’s because these actions, like a product purchase, have immediate value for businesses. A product catalog sale, for example, generates immediate revenue for your company.
As you build your ad campaign, however, it’s important to remember the value of brand awareness and consideration. When you reach and connect with users in the early stages of the buying funnel, you can grow their interest in your brand and move them further down the sales funnel, resulting in a purchase.
Even though this action occurs later, it offers your business real and tangible value. It can also decrease your Facebook advertising costs, as most companies pay less for awareness- and consideration-related goals than for conversion-related goals.
The only difference is the turnaround time for a conversion. With a conversation-related goal, you connect immediately with a user looking to buy. In comparison, users in the awareness and consideration stage need a little more time before converting.
4 . Season
The time of year can also impact how much Facebook ads are.
In peak shopping seasons, businesses tend to spend more on advertising. The increased demand for ad space results in a competitive marketplace, which can lead to aggressive bids and bigger campaign budgets that inflate the cost of advertising on Facebook.
A few of the most expensive days to advertise on Facebook include
- Thanksgiving
- Black Friday
- Cyber Monday
- Christmas
- Boxing Day
- New Year’s Eve
- New Year’s Day
While seasonal factors can increase your Facebook ad costs, your business probably wants to take advantage of increased demand from consumers. In response, you may increase your budget for those high-demand months or audit your ad strategy to improve the quality of your ads.
5 . Industry
While the average cost of Facebook ads is $0.97 (R15), you can gain more insight into your expected Facebook advertising costs by looking at the average price of Facebook ads for your industry. This data offers a more accurate estimate, which can help your team build your social media marketing budget.
Find out how much Facebook ads cost in your industry below:
How to reduce your Facebook ad cost
As soon as Facebook becomes a reliable source of new customers, playing around with digital marketing budgets feels risky. You don’t want to shut the tap and let a competitor claim the ad spots proven to work for your business.
The good news is, a few small tweaks to your campaign can bring down advertising costs without sacrificing results, leading to better return on your investment. Here’s how to do it.
- Select the right campaign objective
- Go narrow with audience targeting
- Run retargeting campaigns
- Make your campaigns relevant
- Reduce ad frequency score
- A/B test ad creatives and placements
- Focus on post-click experiences
1 . Select the right campaign objective
The first step of creating a new Facebook ad is to select a campaign objective. This is the overarching goal of your campaign—the result you want to achieve from buying ads on the platform.
Experimenting with these objectives, and being crystal clear on the outcome you want to achieve, impacts the cost of advertising on Facebook.
The algorithm pairs your objective with users who fit that criteria. If you’re bidding for sales, for example, your ad is more likely to be shown to Facebook users who’ve made purchases through the platform before.
As a result, the average CPC for each campaign objective differs. AdEspresso found that campaigns with the goal of awareness would pay $ 1.85 ( R27.75) per link click. However, choose the link click goal and Facebook will find users in your target audience with a history of clicking ads—hence why the CPC for these campaigns is just $0.21 (R3.15).
2 . Go narrow with your audience targeting
Facebook’s algorithm considers ad relevance score when calculating bids. The smaller and more relevant your audience is, the more chance you have of winning the ad auction.
“It’s advertising best practice to start your initial Facebook campaigns with broader audiences,” says Poelano Selema, founder of The Meta Agency. “This gives Facebook a bit more room to find users most likely to take your intended action before narrowing your targeting. Starting too narrow will result in high costs and fewer conversions.”
Let’s put that into practice and say you’re an online business selling quick, at-home coffee machines. You’re seeing expensive Facebook ad costs with this custom audience
- Female
- Based in the South Africa
- Aged 18+
Sales data shows most of your customers are based in Santon; customer surveys show they purchase from you because they don’t have time to grab a Starbucks coffee on their morning commute.
Taking that information into consideration, you narrow your target audience down to people who fit this criteria:
- Based within 10 kilometers of Santon
- Interest in “Starbucks”
- Annual income of R420 000+
Just like that, your audience size dramatically shrinks, but your ad relevance score increases—especially if you use that customer data in your ad creative (more on this later.)
3 . Run Retargeting Campaigns
The Facebook pixel collects data about your website visitors and pairs it to a Facebook profile—including the pages they visited, which items they added to their online cart, and how long ago they visited. All of that data can be used to run personalized retargeting campaigns.
“In my experience, I have found that remarketing ads were the cheapest to run,” says Usama Ejaz, co-founder and CEO of Socialblu, in an email interview. “All other ad types were simply very expensive, even when compared to Google ads.
“Let’s say you want to run a campaign for sign-ups or orders. If you run ads for conversions, it might become really expensive. But if you run an ad for simple clicks to a relevant blog post of yours, it can be less expensive. Now, combine that with a remarketing ad that targets the visitors to your blog post used in the first ad and you will save a lot of Rands.”
Other smart ways to retarget Facebook users and decrease ad costs include
- Dynamic product ads. Show the products a shopper had in their online shopping cart but didn’t purchase. Reminding them of what they bought could be the nudge they need to head back and purchase.
- People who visited a specific landing page. For example, people visiting your coffee machine and coffee pod categories see two different ads.
- People who visited your site in the last 30 days. The less time between visiting your website and seeing a retargeting ad, the more likely someone is to remember your brand.
Note – When running retargeting campaigns, regularly upload your customer list and exclude them from your ad set. That way, paying customers don’t stay lumped in the same retargeting audience as leads.
4. Make your campaigns relevant
Once you’ve got your audience niched down, use the information you’ve collected about them to make your campaign relevant. (This is why retargeting campaigns work so well—you’re showing personalized ad creatives based on the experience they’ve had with your brand.)
Dig deep into customer research and figure out their
- Interests
- Tone of voice
- Pain points
- Goals and aspirations
- Favorite influencers
Use this data to produce your ad—everything from the ad creative to your message is determined by your customer data.
5. Reduce ad frequency score
One drawback to niching down your Facebook advertising audience is that campaigns quickly become repetitive.
A potential customer that sees your ad several times in their news feed will likely grow frustrated with the repetitiveness. (And let’s face it: if they don’t engage with your ad the first few times it appears, they won’t on the 11th.)
Facebook’s advertising algorithm considers ad frequency scores for this reason. It favors newer, fresher ads that haven’t been exhaustively shown to the target audience.
Keep an eye out for frequency scores in your reporting dashboard. Once it creeps beyond two or three, refresh the campaign with new ad copy, images, or videos. The goal is to keep things interesting.
6. A/B test ad creatives and placements
Facebook advertising is a mixture of science and art. With so many variables at play, it’s impossible to know what the “perfect” ad is—one that drives results for your online store without costing a fortune. But you can get closer to creating it through A/B testing.
Facebook’s built-in A/B testing feature helps advertisers find winning combinations. So, for each campaign, experiment with the following elements and monitor the impact on your ad costs
- Ad creatives. Do images, videos, or carousels do a better job of engaging your audience? How about long-form versus short-form content? Influencer-created content or user-generated visuals?
- Placements. The news feed is the first port of call for advertisers, but test whether your ads get more attention elsewhere—like the audience network. Data suggest in-stream videos are cheaper if you’re billed based on reach. Instagram Stories are also worth exploring if your priority is clicks at the lowest cost.
7. Focus on post-click experiences
Driving traffic through Facebook ads is only half the battle. Presenting potential customers with a slow-loading website, or one with a generally poor user experience, isn’t going to drive revenue—no matter how eye-catching your campaign is.
Here are some simple ways to improve the post-click experience so people visiting your site through a Facebook ad convert
- Direct shoppers to personalized landing pages. We’ve all been there: clicking a product highlighted in a Facebook ad, only to be diverted to the brand’s homepage and a search bar to find it yourself. Make product discovery easily accessible by always pointing to the product page.
- Have fast loading times. Just a one-second improvement in site speed can increase conversions by 27%. Compress images, remove Javascript, and minimize third-party apps to speed things up.
- Make it mobile-friendly. The vast majority (98.5%) of Facebook users consult the app via a mobile device. Make sure your online store is responsive and adjusts to a smaller screen size.
The cost of Facebook ads is always changing
Facebook is a valuable marketing tool for businesses of all sizes. You’ll find customers of various income levels, interests, and locations using the platform—many of whom discover new products through ads in their news feed.
Experiment with different campaigns and creatives, benchmarking them against the Facebook advertising cost averages we’ve shared in this article. Winning, low-cost advertising formulas tailored to your business and audience will soon start to appear.
your Facebook ads with the Meta Agency !
We will audit your business’s current marketing strategy and recommend changes that you can make today to see dramatic improvements in your marketing results.
Book Your Free Business Consultation Call
It’s a super laid-back, low-pressure call to provide you value in advance and get to know you and your business better.
your Facebook ads with The Meta Agency 👉
We will audit your business’s current marketing strategy and recommend changes that you can make today to see dramatic improvements in your marketing results.
Book Your Free Business Consultation Call
It’s a super laid-back, low-pressure call to provide you value in advance and get to know you and your business better.