Marketing Tip: Understanding Facebook Ads and Ad Spend

It’s important to note that Facebook works like an auction. This is important because it’s part of the reason that there’s no set answer to “how much do Facebook Ads cost?”

What Factors Influence the Cost of Facebook Ads?

A lot of factors directly or indirectly affect the cost of Facebook Ads.

How much your ads will actually cost—and how much you’ll get for what you pay—will depend on a variety of different factors.

Here are some of the biggest factors that directly influence the cost of Facebook Ads.

  • The Audience You’re Targeting

○ This, in part, will largely be affected by what you’re spending, bidding, and who else is targeting the audience you’re targeting.

  • Ad Quality

○ Facebook measures the quality by based on relevance and interaction. Making sure the relevance score and click-thru rate stay high will result in lower priced ad space.

  • Time of Year

○ There are peak times in the year when advertisers are flocking to Facebook Ads in droves—even more than normal. During these peak times, there will be more competition for ads, and you’ll pay more as a result.

  • Bidding Options

○ Facebook has different bidding options based on the objective of the campaigns. Bidding options affect cost a great deal, because you are choosing what you want to pay for. A cost per conversion is almost always more expensive than the cost per impression or cost per click, etc.

So what does this all equate to?

In just the USA, the average cost per click (CPC) of Facebook Ads in Q3 2016 was 27.29 cents (and 27.40 cents for ALL objectives). The cost per 1000 impressions (CPM) based on Q3 was $7.19 (and $7.34 CPM for ALL objectives).

CPC declined for 35 and ups, but increased for 34 and younger (except for the teenagers which remained at their lower cost .06 cents per click).

In Q3 2016, desktop placement decreased in price (largely due to increased mobile targeting)
For campaigns running “Page Likes” as an objective, advertisers saw an average cost of $0.23 per page like in Q3 2016, or about $230 per thousand likes.

Summary

There are plenty of factors that can affect how much you’ll be paying for Facebook Ads, including the audience, relevance scores and bidding strategies. The data shared here, however, covers a large span of usage and demonstrates a starting point of what you can use as a reference point to get a realistic, number-based view on how much Facebook Ads actually cost. Your costs will likely be slightly (or, in some cases, very) different, but knowing what affects the cost of Facebook Ads and how to lower them, you can go in knowing what you’ll be paying.

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