Facebook, the world’s leading social media giant, offers businesses unparalleled opportunities to reach new prospects. However, this vast potential attracts intense competition, driving up ad costs as businesses vie for the attention of the same user base. So, how much should you realistically budget for Facebook advertising to effectively cut through the noise and connect with your target audience?
This article dives into the average costs businesses are allocating to Facebook ads as of November 2024. We’ll also provide actionable tips to minimize your ad spend without compromising the effectiveness of your campaigns.
Understanding Facebook Ad Costs: CPC, CPM, and CPL
Facebook primarily charges advertisers based on two key metrics: cost per click (CPC) and cost per mille (CPM), the latter also known as cost per 1,000 impressions.
- Cost Per Click (CPC): This is the amount you pay each time someone clicks on your Facebook ad.
- Cost Per Mille (CPM): This is the amount you pay for every 1,000 impressions your ad receives. An impression is counted each time your ad is displayed to a user.
Average Facebook Ad Cost: CPC
As of November 2024, the average CPC for Facebook ads was around $0.72. This figure is generally lower than the average CPC on platforms like Instagram and Google Ads.
However, keep in mind that this is just an average. Several factors, including seasonality, competition, and your campaign’s specifics, can significantly influence your actual CPC.
Average Facebook Ad Cost: CPM
The average CPM for Facebook ads in November 2024 stood at $13.75.
CPM is a crucial metric, especially if your primary goal is to build brand awareness. It reflects the cost of getting your ad seen by 1,000 Facebook users. With billions of monthly active users, Facebook provides a massive platform for expanding your brand’s reach.
Average Facebook Ads Cost: CPL
While CPC and CPM are the primary cost drivers, Cost Per Lead (CPL) is another valuable metric to consider. The average CPL for Facebook ads in November 2024 was $6.49.
CPL measures the cost of acquiring a new lead, such as an email subscriber or someone who has expressed interest in your product or service. Building an email list through Facebook ads offers a direct line of communication with potential customers, allowing you to nurture relationships without incurring further ad costs. Meta offers various tools to refine your audience targeting. You can leverage demographic data to narrow your audience or expand to lookalike audiences based on your existing customers.
By focusing on the users most likely to convert into leads, you can potentially increase your ads’ conversion rate and reduce your CPL. This allows you to build a valuable customer base with a lower long-term investment.
8 Factors Influencing Facebook Advertising Costs
Several factors influence the ultimate cost of your Facebook ads:
1. Bidding Strategy
Your chosen bidding strategy plays a significant role in determining your Facebook ad costs. You can choose to pay based on a set budget or based on a specific goal:
- Spend-Based Bidding Strategy: This strategy instructs Facebook to maximize results within a defined budget. This can involve seeking the lowest average cost per conversion or targeting a smaller segment of high-value conversions.
- Goal-Based Bidding Strategy: This strategy directs Facebook to strive for a target conversion rate, allocating ad spend accordingly. While overall spending can be capped, it can also be set within a predefined range.
You also have the option of bypassing Facebook’s automated ad bidding algorithms and setting specific manual bids.
If you’re concerned about overspending, consider setting a bid cap for your campaigns. This ensures you don’t spend more than a customer’s worth, particularly if you can accurately calculate a customer’s value.
2. Ad Quality and Relevance
The relevance of your ads to your target audience directly impacts your ad costs. Meta prioritizes ads that resonate with users, creating a more enjoyable browsing experience. Relevant ads typically perform better, leading to improved cost-effectiveness.
Meta’s ad relevance diagnostics tool provides insights into your ad’s relevance. The tool evaluates your ad’s historical performance in ad auctions across three categories:
- Quality: Meta assesses ad quality based on user behavior data (e.g., ad hiding) and content elements (e.g., sensationalist language or clickbait).
- Engagement: This measures how often users interact with your ad through clicks, comments, shares, or expansions compared to competing ads.
- Conversion: This predicts the likelihood of a user completing your desired action after viewing your ad.
Use these diagnostics to pinpoint areas for improvement. Are your creative assets, post-click experience, or audience targeting underperforming?
3. Audience
The audience you target significantly influences your Facebook ad costs. Factors such as age, location, and interests can either inflate or deflate costs. Targeting densely populated cities or highly sought-after demographics tends to be more expensive.
Two common approaches to audience creation exist:
- Specific or custom audiences: These use inputted data to target people who already know your business or are likely to be interested.
- Broad audiences: These encompass users identified by Facebook, potentially including a wider range of prospects.
Targeting a narrower audience may result in a higher cost per click, but the increased conversion rate can provide better overall value. Meta refines your audience over time based on user engagement, ensuring you reach more of the right people, no matter your initial audience.
4. Ad Format and Placement
Ad placement determines where your ads appear on Facebook and within Meta’s ecosystem, including ads on Instagram, Messenger, and the Audience Network. Costs vary depending on whether your ad appears in the news feed or the right column.
Available ad placements are determined by your Facebook ad campaign objectives. Awareness or website traffic campaigns can be formatted in various sizes, such as a single image or video, a carousel, or a collection ad on Facebook, Marketplace, and Instagram.
Running ads on both Instagram and Facebook can reduce your average cost per result. You can either allow Facebook to optimize your ad placements or manually choose where your ads run.
5. Ad Frequency
Facebook strives to maintain a fresh and engaging user experience. Repeated exposure to the same ad can lead to ad fatigue, especially if users aren’t interacting with it.
“When your ad has been running for some time, it will be seen by the same people repeatedly,” says Tim Clarke, the senior reputation manager at the marketing agency Thrive. “Therefore, you will notice that your advertising costs will be lowered if your frequency is as close to one as possible.”
Implement a frequency cap within Ads Manager to prevent ad fatigue. This limits the number of times your ad is displayed to the same audience, reducing ad costs.
6. Ad Duration
It takes time for Facebook’s algorithm to understand your campaigns, especially when launching your first ad. This learning phase allows Meta to test and identify optimal placements, audiences, and bidding strategies.
A campaign typically requires around 50 optimization events within a week after its last significant edit to exit the learning phase. Avoid edits whenever possible, and create a new ad set if major changes are necessary.
Running indefinite campaigns can also lead to ad fatigue and increased seasonal costs. Launching an ad during peak seasons, such as the Black Friday to Cyber Monday weekend, can significantly increase campaign costs due to heightened competition.
7. Time of Year
Facebook advertising costs tend to fluctuate throughout the year. Ad prices often surge during the latter months of the year. Events like Black Friday and the holiday shopping season attract a flood of advertisers, intensifying competition in ad auctions.
8. Performance Goal
Your ad costs are also influenced by your chosen performance goal – the desired outcome for which Facebook will bid on your behalf. Whether you aim to boost brand awareness, drive app installs, or generate website traffic, each goal carries its own cost.
A diverse range of performance goals are available, including maximizing:
- Ad reach
- Impressions
- Landing page views
- Link clicks
- Two-second continuous video views
- Leads
The available performance goals are ultimately dictated by your overarching advertising campaign objective.
Certain optimization events are more expensive than others. For example, a conversion typically costs more than a landing page view. When determining your ad budget and bidding strategy, factor in the cost of your chosen optimization event and ensure your budget can accommodate it.
How to Reduce Facebook Ad Costs
Even after Facebook ads become revenue-generating, changing your marketing budget can feel risky. Fortunately, Meta offers tools and data that allows you to optimize ad spend without losing ad slots to competitors.
1. Pick the Right Campaign Objectives and Goals
Choosing the right campaign objective is one of the first steps when creating a Facebook ad. Meta Ads Manager offers six objectives:
- Awareness
- Traffic
- Engagement
- Leads
- App promotion
- Sales
The objective you select should align with your desired outcome. Experimenting with these objectives and related performance goals impacts the cost of advertising on Facebook.
The algorithm matches your objective with users who meet its criteria. If you’re bidding for sales, your ad is more likely to appear to users who have previously made purchases through the platform.
Selecting the wrong campaign objective can increase costs. For example, choosing lead generation when your true aim is brand awareness can reduce your campaign’s efficiency.
2. Use Narrow Audience Targeting
Facebook’s algorithm weighs ad relevance when calculating bids. Narrower and more relevant targeting increases your chances of winning ad auctions.
This makes narrow audience targeting more cost-effective. To define the optimal audience, start with a wider pool to identify the audience types most responsive to your content.
“Start your targeting a bit broader than you would initially think,” says Josh Jurrens of Caliper Marketing. “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.”
For example, consider an online business selling home coffee machines with high Facebook ad costs for this custom audience:
- Female
- Based in the US
- Aged 18+
Sales data reveals that most customers reside in Los Angeles, and customer surveys show that they purchase from you because they lack time to pick up Starbucks during their morning commute.
You can refine your target audience to sell on Facebook and reach people who:
- Live within 10 miles of Los Angeles
- Show interest in “Starbucks”
- Have an annual income exceeding $75,000
Starting with an established audience and narrowing it with data can increase ad relevance and reduce spend.
3. Consider Excluding Audiences
Not everyone within your target audience represents an ideal customer. You could pay to reach people who don’t contribute to your advertising goals.
If your goal is to build brand awareness with an average CPM of $13.75 to reach 1,000 new people, consider excluding people who:
- Already like your Facebook Page
- Have visited your website within the past 28 days
- Have already made a purchase
“Some brands worry they might be excluding potential customers, but if there are certain demographics or interests that might indicate a poor fit for your product, exclude them,” says marketer Brooks Manley.
4. Run Retargeting Campaigns
The Meta pixel collects data about your website visitors and links it to Facebook profiles, including pages visited, items added to carts, and visit duration. This data can fuel personalized retargeting ads.
“In my experience, I have found that remarketing ads were the cheapest to run,” says Usama Ejaz, co-founder of social media management tool SocialBu. “Let’s say you want to run a campaign for sign-ups to your website blog. Combine that with a remarketing ad that targets the visitors to your blog post from the first ad and you will save a lot of money.”
Potential Facebook retargeting ads could include:
- Abandoned cart ads. Show shoppers products they added to their shopping cart but didn’t purchase.
- Landing page ads. Serve ads based on the sections of your website that a person visited.
- Recent visitor ads. Show Facebook ads to recent visitors to your site to keep your brand top of mind.
5. Make Your Campaigns Relevant
Serving ads to a targeted audience makes it easier to create relevant ad creatives.
Retargeting campaigns can leverage previous customer experiences, such as browsing a product page. Ads for custom audiences can utilize data used to define the audience, such as their interests and location.
Other data sources include post-purchase surveys and historical ad performance data. Do your customers prefer video ads or image carousels? Use these insights to craft copy that resonates with your audience’s tone, vocabulary, and needs.
The health-conscious cereal company Magic Spoon, for example, promises customers a snack that’s “both delicious and better for you” through its products.
Two Facebook video ad examples for a protein breakfast bar.
6. Monitor Ad Frequency
One potential drawback of niching down your Facebook audience is that campaigns can become repetitive. Users exposed to the same ad multiple times in their news feed will likely lose interest, regardless of its relevance.
Facebook tracks ad frequency by dividing impressions by reach. As your frequency score exceeds two or three, consider refreshing the campaign with new ad copy, images, or videos. Minor creative adjustments can keep content engaging.
7. A/B Test Ad Creatives and Placements
Facebook advertising combines both science and art.
Many variables affect an ad’s performance, including uncontrollable seasonal factors, which makes it difficult to find the perfect creative or audience selection. However, A/B testing can improve results and cost-efficiency.
Facebook’s A/B testing feature helps advertisers identify winning combinations. Experiment with the following elements and monitor the impact on your Facebook ad costs:
- Ad creatives. Do images, videos, or carousels better engage your audience? What about long-form versus short-form content? Influencer content or user-generated visuals?
- Ad formats and placements. While the news feed is a common starting point, test whether your ads perform better elsewhere, such as the Audience Network. Instagram Stories are worth exploring if your priority is clicks at the lowest cost.
8. Focus on Post-Click Experiences
A successful Facebook ad is valuable, but the post-click experience determines whether an ad click becomes a conversion.
A slow-loading website or confusing user experience will negate the benefits of an eye-catching campaign.
Here are simple ways to improve the post-click experience for people visiting your website via a Facebook ad:
- Optimize landing pages: Ensure your landing pages are relevant to your ad, load quickly, and provide a clear call to action.
- Ensure mobile-friendliness: Given the high percentage of mobile users on Facebook, ensure your website is fully responsive and provides a seamless mobile experience.
- Simplify the checkout process: Make it easy for customers to purchase by minimizing steps, offering multiple payment options, and providing clear instructions.
Is It Worth Paying for Facebook Ads?
Facebook marketing is a powerful tool for businesses of all sizes. The platform connects you to customers across diverse interests, income levels, and locations, many of whom discover new products through ads in their news feeds.
Effective Facebook advertising involves ongoing trial and error. Experiment with different campaigns and creatives, and compare them to past performance. Over time, you’ll uncover cost-effective advertising strategies that resonate with your audience.
Facebook Ad Costs FAQ
Why are Facebook ads so expensive?
Facebook ads targeting popular or valuable audiences can be expensive because of high competition for ad space. The more competitive the ad auction, the higher the cost of winning bids.
What is a good cost per click?
The cost per click of Facebook ads varies continually based on factors such as the ad’s objective and the desirability of the target audience. A good cost per click allows a marketer to win the Facebook ad auction, serve the ad to Facebook users, and remain less than the expected value of the click.
How much should you spend per day on Facebook ads?
The minimum advertising budget for a Facebook ad is $1 per day for campaigns billed by impressions. For more aggressive campaigns, such as those designed to drive traffic or sales, a minimum budget of $5 per day is recommended.
How does Facebook’s ad auction system work?
Facebook’s ad auction system is a bidding war in which businesses compete for ad space. Facebook considers the relevance and quality of ads in addition to bid prices. The system aims to show ads that are most valuable to users, balancing both the ad bid and the ad’s quality.
How can you improve the performance of your Facebook ads?
Improving ad performance often comes down to refining your targeting, enhancing your ad creative, and optimizing your bidding strategy. Use Facebook’s audience insights to understand your audience better and tailor your ads to their interests and behaviors.
Are paid Facebook ads worth it?
Facebook ads remain a good investment for online brands due to the social media platform’s unparalleled reach. However, a diversified marketing campaign using multiple channels, including other social media platforms, will likely yield the most worthwhile results.
