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How Much Does Facebook Advertising Cost

Jack Boulton

If you’re looking to branch out and explore the world of advertising on Facebook, you’ve probably got a long list of questions you’d like answering…

Near the top of that list is probably this:

How much does it cost to advertise on Facebook?

Good question.

The thing is, there are lots of different moving parts that affect how much you’ll need to spend to run a successful ad campaign on Facebook.

What industry your business is in, the goals of your campaign and the users you’re targeting, will all determine how big or small your ad budget needs to be in order to see tangible results.

But by the end of this blog post, you’ll have a better understanding of the main costs involved and whether or not advertising on Facebook is even a worthwhile route for you to go down.

We’ll be throwing some facts and figures at you, so get ready to geek out with us as we take a deeper look into how much advertising on Facebook really costs!

What are the main costs involved when advertising on Facebook?

Before jumping into how much advertising on Facebook costs, lets quickly touch upon exactly where your advertising dollars will be spent.

Ad Auction

The biggest chunk of your ad budget will be spent during Facebook’s auction process.

You see, advertising on Facebook works just like any auction does. You bid for advertising space on the social media platform just like you would for a new home or car.

But as you can imagine, other advertisers are also vying for the same advertising spaces that you are — namely the Facebook feeds of users you’re trying to target.

The good news is, Facebook doesn’t determine the winner of each auction by looking solely at who placed the highest bid — like in traditional auctions — but by deciding which ad is most likely to provide the user with the most value.

Facebook decides which ad has the highest potential value by analysing three factors:

1. Your bid

This is the maximum amount of money you’re willing to potentially pay for your ad to be shown.

It doesn’t necessarily mean you’ll end up paying the amount you set, but your bid indicates to Facebook how far you're prepared to go to win the auction.

2. Ad quality and relevance score

Facebook will show your ad to 500 people and measure how well it resonated with your target audience.

Then, Facebook will give your ad a score from 1-10 depending how relevant it considers it to be, the higher the score, the lower it will cost to be shown.

The idea here is that Facebook wants to reward quality, relevant ads that are more likely to generate clicks, so by incentivising better quality ads, everyone’s a winner — in theory at least…

3. Estimated action rate

The estimated action rate is just Facebook’s way of measuring the likelihood of a user taking action after seeing your ad.

If the platform thinks your ad will generate a lot of activity, then it’ll give your ad priority against others — yippee!

It’s worth noting at this point that there are four different bidding models to choose how your ad budget will be spent.

  • CPC - Cost-per-click
  • CPM - Cost-per-thousand-impressions
  • CPL - Cost-per-like
  • CPA - Cost-per-download

You can see the average cost of each method in the chart below from WebFX.

Credit: WebFX (figures in USD)

There is a time and a place for each model to be used — largely dictated by the goals of your campaign, but more on this later!


We’ve already established the impact that having high-quality ads can have on how much it’ll cost to get them seen by the masses.

It therefore makes sense to ensure your ad features top notch creative that is going to capture the imagination and attention of your target audience — which is easier said than done.

This is where engaging the help of a graphic designer or copywriter can help you create Facebook ads that stand out and generate those all important clicks that you’re after.

If you don’t want to commit to a long term contract with a creative agency, there are plenty of skillful freelancers out there on sites like Upwork and Fiverr who won’t cost an arm and a leg.

But, if you’re looking for more of a hands off approach to your Facebook advertising, you may be better off engaging the help of a professional advertising agency…

Facebook Ads Management

If you don’t have the time to be constantly testing out things like different creatives and bidding strategies, then you’re probably going to be leaving money on the table when it comes to advertising on Facebook.

Which, as you’re reading this blog post, probably isn’t what you want to be doing…

By partnering up with a trustworthy advertising agency (like us), you’ll be able to leave your Facebook ads in the hands of a dedicated team of experts who have a hands-on experience of generating impressive results for businesses like yours.

Most agencies usually feature in-house creative departments too, so they’ll be able to put ad builds together quickly and have your campaigns up and running in no time.

Of course, working with a social advertising agency is going to increase the size of your ad budget, but as long as you pick the right team to work with, your ads will perform so well that you’ll be more than happy to part with a few extra dollars each month.

What factors affect the cost of Facebook Ads?

Ok, so now you know exactly where your money will be going, let's look at the factors at play that affect the cost of running Facebook ads…

1. Audience

Unsurprisingly, a big factor that’ll affect how much your ads end up costing you is down to the audience you target.

Generally speaking, the more targeted and more specific your audience is, the more you’ll have to spend.

That’s because, by nature, hyper-targeted Facebook audiences will be smaller in size and therefore more competitive to market to.

Let’s say you want to run a Facebook ad campaign for walking sticks and you’re targeting male users over 60 years old. You’re most likely going to have to pay more per click than if you sold a product targeted towards a far broader audience.

Having said that, what’s most important is ensuring your products are getting in front of the right people, because you don’t want to pay for clicks or views that realistically aren't going to convert.

2. Daily Budget

This is the total amount you’re prepared to spend on Facebook ads on a daily basis.

The beauty of being able to set a daily budget is you can start things off nice and slowly with a smaller budget as you get your feet under the table..

But be warned, running ads on a shoestring budget will affect how competitive they are during the auction process we discussed earlier.

Let’s say you set a daily ad budget of $10. Considering we know the average CPC for Facebook ads is around AUD$1-2, you can easily see how your $10 budget could be quickly blown out the water by competitors with deeper pockets.

This should hopefully underline the importance of nailing your target audience, and your entire funnel for that matter, so the leads that do come through via your Facebook ads are highly likely to become paying customers.

3. Bidding Strategy

Rather than running off with your ad budget and spending it willy nilly, Facebook currently offers five different bidding strategies that allow you to choose exactly how it is spent during the auction process.

These can be broken down into three separate subcategories.

We did warn you we were about to get geeky…

Spend-based bidding

These two options focus on squeezing as much juice as possible out of your entire ad budget.

  • Lowest cost: This is Facebook’s default option that aims to maximise delivery and conversions. Let’s say you’re advertising a festival and want to get as many people to attend as possible, using Facebook’s lowest cost strategy would be a good choice. This is because your focus is on quickly generating results — without being too concerned about the cost-per-action.
  • Highest value: On the other hand, Facebook’s highest value strategy works by going after users who are most likely to splash out on your high ticket items. Imagine you own a jeweller and you want to sell more Rolexes, using the highest value strategy is more likely to get your premium watches in front of the potential big spenders and therefore increase your chances of maximising your ROAS.

Goal-based bidding

These bidding strategies come in handy when you have a certain cost or value you’d like to achieve.

  • Cost cap: This works by setting an average cost you’re prepared to pay for advertising space. Some ad spots may cost more and some maybe less, but overall Facebook will ensure that the average cost is at or below the cap you’ve set.
  • Minimum ROAS: By choosing the minimum return on ad spend option, you’re able to let Facebook know exactly how much you want to spend on each conversion. This is a good choice if you have a specific ROAS target and want to maintain a high level of control during your ad campaign.

Manual bidding

This allows you to control exactly how much Facebook bids for advertising space during the auction process.

Bid cap: This works in a similar way to the cost cap option, but Facebook won’t use dynamic bidding meaning it’ll never exceed the bid cap you set. This is an excellent option if you’re looking to run a super streamlined campaign, but it is considered an advanced bidding strategy and only recommended if you’re an advertising expert with a serious understanding of KPIs and all the costs involved.

4. Campaign Objectives

The next big factor that’ll affect how much advertising on Facebook will cost you is what the actual goal of your campaign is.

When setting up your campaign, Facebook lets you choose from the following campaign goals:

  • Awareness: brand awareness, reach
  • Consideration: traffic, engagement, app installs, video views, lead gen
  • Conversion: conversion, catalogue sales, store traffic

Generally speaking, campaigns featuring goals that require more commitment from the user and provide immediate returns will be more costly, while ads that don’t will be cheaper to run.

For instance, running a brand awareness campaign will cost less than a conversion-based campaign because it’s easier to get a user to simply interact with an ad than it is to get them to physically click through, head to your online store, insert their card details and complete an order.

5. Placement

Identifying exactly where you want your ads to show up will also affect the cost of running Facebook ads.

Luckily, as Facebook owns Instagram, there are plenty of different places for you to choose from:

  • Facebook News Feed
  • Facebook Video Feed
  • Facebook Right Column
  • Facebook Stories
  • Facebook Marketplace
  • Facebook Messenger
  • Instagram Feed
  • Instagram Explore
  • Instagram Stories
  • Audience Network

In truth, we could write an entire blog post dedicated to this section alone, but here are the main takeaways you need to know:

  1. Facebook offers much more variety in terms of where your ads show up, making them great for a whole host of different campaigns.
  2. Instagram features the highest average CPC, largely due to the fact that ads on Instagram generate more engagement — especially ads that feature in the Instagram Feed.
  3. The Audience Network works in a similar way to Google’s Display Network in that it allows your ads to be spread across multiple placements based on where they’re likely to perform best.

6. Ad Quality

We already touched upon this earlier so we won’t repeat ourselves, but it’s worth understanding that the quality and relevancy of your ads has a huge impact on how much advertising on Facebook will cost you.

AdEspresso highlighted just how important ad quality is by conducting a study that featured two identical ads that had vastly different relevance scores. Ad a) had a relevance score of 2.9 and ad b) had a relevance score of 8.

The result?

Ad a) had an average CPC of $0.14 while ad b) had an average CPC of just $0.03! So with the exact same Facebook ad budget, ad b) was able to generate 4 times as many clicks as ad a).

This goes to show just how important ad quality and relevance is when setting up your campaigns.

7. Time of Year

Just like in the real world, online advertising is affected by the different shopping seasons throughout the year — and Facebook is no different.

You can therefore expect to pay more for Facebook advertising space during busier periods such as Black Friday and around Christmas and New Year.

Although your ad spend may go up during these busy periods, you’re probably going to be more than happy to part with a few extra dollars as users are much more likely to be in ‘buy mode’ — even if they’re new to your business.

It may be worthwhile targeting the high-demand months you feel your business can take advantage of and working them into your Facebook advertising budget.

8. Industry

Last, but certainly not least, we have the industry your business operates in.

Depending on what kind of product you sell and the type of competition you’re up against, your Facebook advertising costs are going to be affected massively.

The graphic below shows just how much the industry you’re in can affect how much you’ll be paying to get users’ attention on Facebook.

Average Facebook Advertising CPC per industry: Credit WordStream

Let’s say you run a boutique financial advisory firm and you want to start running Facebook ads, you’re going to be going up against huge businesses that have seriously deep pockets, so you should be prepared to have a high CPC.

But, as we’ve mentioned a few times throughout this blog post, as long as you’re clever with the content of your ads, your targeting and bidding strategies, then you have a chance of going up against just about anyone on Facebook — and that’s the beauty of advertising on Facebook!  

So, what’s next?

Well, we hope this blog post has helped you understand exactly where your Facebook advertising budget goes and has given you a rough idea of how much you’ll need to spend to see results.

But we know, it can all be a bit confusing and a bit overwhelming — that’s why we’re here to help!

We help set up, manage and optimise Facebook ad campaigns for businesses of all different shapes of sizes and we can help you too…

If you’d like to find out how we can help your business start getting some serious results from advertising on Facebook, why not claim a free proposal from us today?

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Jack Boulton
Jack is the conversion copywriter at Local Digital. With a background in journalism and reporting, he specialises in getting to the crux of the issue when it comes to writing high-converting sales copy. You can typically find him in his copy cave writing pretty much anything from ad copy and landing pages to website content and B2B emails.

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