How Much Does Facebook Advertising Cost?

Trending today is growing the business via facebook advertisement. Facebook has become a great platform for one’s business in the present context since most of the people are into facebook , advertising your business here can have reached to an enormous number of customers. So, how much does the facebook advertising really cost? This is the question which we are going to answer today.

There are many factors that influences the cost of Facebook advertising and there is not an exact answer to the question. Since there exist facebook marketing partners like SalesForce, AdEspresso and Nanigans they regularly analyze social media advertising spends i.e benchmarking. Yes, the benchmarking will help you a little bit regarding the cost but will now tell you precisely how much exact your facebook ad campaign will cost. They can be taken as the reference point for consideration.

Among the major facebook marketing partners, we found out that the team of AdEspresso seem to have the most updated benchmarks. Below are some findings made by the team during 2016 Q3.

The average Cost Per Click (CPC) is about $0.35 globally and about $0.28 in the U.S.
The average cost per like is $0.23 in the U.S.
The average cost per app install is $2.74 in the U.S.
All the cost above are in US dollar.

Below are some infographics for 2016 Q4 that were presented by AdEspresso

So here we have listed out 7 of the main factors that affect the Facebook ads

Your Bid i.e How interested are you in showing your ad

When you create a Facebook Ad, you’re joining a huge, global auction, competing with other advertisers for ad space on Facebook since the platform is very idle and popular.

Your bid amount represents how interested you are in showing your ad and the higher your bid, the more likely your ad will be shown.

Ad Quality and Relevance

Facebook automatically estimates the quality and relevance of your ad based on how users are interacting with its users. Facebook considers both positive and negative feedback. Facebook provides a Relevance Score metric for each ads. When your ad’s relevance score is high, Facebook will show the ad more than ads with lower relevance scores, and you will also pay less to reach more of your target audience.

How likely a person will act on your ad

Facebook will estimate how likely the person will take action to your ad. This is called Estimated Action Rate. For example, if you are creating and running your ad for online shopping Facebook will show ads to people who are likely to get interested in the products. Facebook determines this based on the previous actions of the person in your target audience and your ad’s previous performance. So now if your action rate is low you need to pay high for your ads to come to people’s’ attention or vice versa.

Your Audience Targeting

To whom you are targeting your ad and how many people you are targeting to will have the major influence on your facebook advertising cost. This criterion is because of the level of competition to reach a particular audience. So it is obvious that when more marketers are targeting a specific type of audience the cost if the ad will get more expensive to reach them. The targeted users can be categorized based on location, age, gender, connections any much more.

Time of Year

So According to AdEspresso – “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.” . So it is clear that if number of advertisers are targeting the specific audience in that particular time the cost will increase.

Below is an infographic that explains the cost based in time of the year.

Placement: Where your ads appear

Placement describes where your ads are shown within Facebook’s ecosystem. The various locations in which you can display ads include:

Facebook’s desktop News Feed
Facebook’s desktop right column
Facebook’s mobile News Feed
Instagram’s mobile News Feed
Audience Network
Messenger
Facebook says, can reduce the average cost per result of your ad:

Allowing us to show your ad on Instagram and the Audience Network as well as Facebook gives you more opportunities to reach the people you care about across devices. It can also reduce your average cost per result. At the ad level of ad creation, make sure you’ve opted into both additional placements and that your ad’s creative complies with the Instagram and Audience Network requirements.

It might be a good idea and can be given a try.

Optimization of Ad Delivery

When creating an ad you can choose an option that says Optimization of Ad Delivery. So you can use this option as per the requirement and can have major influence who facebook shows your ads to. For an example, if you have chosen an option to optimize for clicks, the ad that you post will be shown to people who are more likely to click the ad.

Your can Choose 3 of the options available:

Link clicks: ads targeted to people who are more likely to click the ad
Impression : ads will be displayed to people as many times as possible
Daily unique reach : ads will be shown to particular user once in a day.

So this can affect the cost of your ad because the action taken on your ad will directly affect your ad’s relevance cost and estimated action rate.