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How much does Facebook Advertising cost in 2022?

How much does Facebook Advertising cost in 2022?

Intro

Facebook remains the top trusted advertising strategy with over 7 million active advertisers worldwide. However, if you’re unfamiliar with the platform, you may encounter diverse functional questions. And one of them indeed is about Facebook advertising cost. In this article, we’ve clarified how much you need to store for your ad budget and how to optimize this sum with several handy tips.

The bad news is that the cost of Facebook ads is unstoppably increasing. It happens naturally as new advertisers start working with the platform. Brands, hungry for customers, want to make Facebook perform for them and skyrocket their reach, engagement, and sales. So, the higher demand also boosts the cost.

In this text, you'll learn to calculate your ad budget and understand why it's vital to keep optimizing and testing your ads.

How much does it cost to advertise on Facebook?

The estimated cost of a Facebook ad varies depending on many factors, the most powerful being the niche and month during the year. Below we've collected the average data across different bidding models:

Bidding model Average cost
Cost-per-click (CPC) $0.97
Cost-per-thousand-impressions (CPM) $7.19
Cost-per-like (CPL) $1.07
Cost-per-download (CPA) $5.47

If you want to get more information about benchmarks and how they influence the cost of advertising in each industry, please go to the article Facebook Ad Benchmarks to Follow in 2022. In it, you can find detailed information about 4 benchmarks and 16 industries with convenient infographics.

How is the cost determined?

You may have noticed that the number of advertisements in your news feed is just immense. Despite it being the most common impression people get when scrolling their Facebook, the platform still aims to control the number of advertisements and avoid overloading its users. It also offers only limited advertising placements, so increasing the competition for the advertising spot.

Thus, when two or more advertisements suit one spot, Facebook puts them on ad auction to determine the one that will finally take it. A note here: to appear on the same auction, the ads must be submitted with analogous campaign competes. As an example here will suit two beauty brands selling facial care for 50+ women.

Once there appears the chance to show an ad, the auction happens:

  1. Facebook grades each ad, pays attention to its quality and estimates action rates.
  2. It uses the collected data to determine the relevance of each ad.
  3. The platform generates the total value of the ads. It's formed by accounting for the bid, ad quality, and estimated action rate.
  4. Facebook delivers the ad that won the auction or the ad with the highest total value.

When the ad enters the auction, there are the four main metrics that influence its performance and cost:

  • Ad bid
  • Ad quality
  • Ad relevance
  • Estimated action rate

It's vital to account for these four elements. Facebook even says that the more relevant ads tend to be cheaper and have more facetime.

Then what's with the cost?

Firstly, it's drastically influenced by the number of auction participating ads. And so, the industries with higher demand, such as finance, home improvement, and insurance are more expensive.

Secondly, seasonality plays a role. Historically, the ad cost elevates at the end of the year. Holidays like Black Friday, Cyber Monday, or Christmas attract more advertisers to the platform, so more of them compete in auctions.

Facebook Ads VS Other Ads

Although Facebook is a top-rated platform for advertising, it also remains one of the cheapest:

Speaking about the Facebook ecosystem and its most popular element — Instagram — Facebook still remains the most attractive place for advertisers. The split test results held on the two platforms involving identical ads showed that the CPC for Facebook was about 40% lower than for the Instagram ad.

Nevertheless, the data doesn't guarantee that Facebook would prove the best platform in your case. To choose the place for advertising, analyze your audience first. Remember that both platforms have weak and strong points, so it's helpful to know how to manage both of them.

Setting up the budget

You need to take a few easy steps to distinguish the approximate budget for your campaign per month:

  1. Think about the number of clients you would like to generate. In our example, let's take it for 50.
  2. Distinguish the actual conversion rate on your site or landing page. For instance, it can be 5%.
  3. Now try clarifying the number of clicks you need on your ad to generate the target number of clients. In our example, it equals 1000.
  4. At this point, we know that the average CPC is $0.97. So, we need approximately $970 to make the ad campaign reach our goal.
  5. For more accuracy, find the average CPC via your industry and make the calculation based on it.

Whatever price you get, remember that you can and should work on optimizing it. For it, we've prepared several working tips for you later on in the article.

Manual VS Automatic bidding

Facebook offers two bidding strategies. Choosing one of them can be a significant element in increasing your ad performance.

  • Manual bidding or target cost bid strategy. This strategy works to reach your desired cost-per-click or per action. It can be used for app installs, lead generation, product catalog sales, or conversion campaigns.
  • Automatic bidding or lowest cost bid strategy. It helps advertisers to achieve the lowest cost-per-click. It tends to make the most of the budget and is the most popular among small companies or those who only start advertising on Facebook.

Thus, manual bidding generates higher advertising costs but is more flexible. Simultaneously, automatic bidding helps avoid overpaying and brings the best results from your budget.

Does Facebook fit your audience?

Before launching a new ad campaign, try to analyze your target audience and check if it correlates with the Facebook audience.

Speaking broadly, Facebook is aimed at more informative content. For instance, it would suit well for self-development courses, ads for touristic excursions, or interviews with CEOs. Such content is organically implemented into Facebook news feeds and works well with other textual content the users expect to see on the platform. Conversely, highly-aesthetic photos are poorly suited for Facebook and can be adjusted for Instagram ads instead.

Besides, the Facebook audience is older than that on Instagram. And so, targeting the youth on the platform isn't the best idea.

Finally, it's always better to avoid additional risks. Try to launch several test campaigns with small budgets first. Look how they perform and then conclude if Facebook is the best advertising platform for you.

How to decrease Facebook Ads costs?

  1. Create a full-funnel strategy

    To make your campaign productive, it's better to start promoting your products with top-funnel objectives (Awareness and Consideration) to tell potential customers about your product first. As knowledge about it grows, slowly move through the middle of the funnel (Consideration and Conversion objectives) to its bottom (Conversion).

    It's not that the new users cannot convert. But generally, people will require more time and interaction with the product.

    If you're wondering, which ad objective will work best in your case, please read the article Facebook Ad Objectives Playbook 2022. It contains a detailed description of each type and teaches how to avoid mistakes in using them.

  2. Choose the suitable campaign objective

    The campaign objective is the crucial element of your ad, so don't underrate it and don't click on whatever feels just ok. It helps you target the people who allow you to fulfill your business aim and also can impact your ad budget. It's estimated that the wrongly chosen objective increases the ad cost by approximately 4.2%.

    Thus, clearly define who you want to target before entering Facebook ads. Do you want people to learn about your brand? Or do you want them to purchase? And can you make the completely unaware audience buy your product?

  3. Narrow down or broaden your audience

    If your dominating aim is to decrease ad costs — go for the broader audience. You'll see the price shrinking considerably after trying to target a cold, top-funnel audience. But is it the best choice for you? It can be so if your product isn't specifically aimed at some group of people, such as a spa center or clothes shop. Then you can successfully target a less specified audience in your location at lower costs.

    Nevertheless, a broad audience can prove completely ineffective for highly-specific products, such as an educational event for dentists. In this case, it makes sense to narrow it down by adding filters according to interests and job titles. Although narrower ads cost more, they are also more likely to bring the people who'll convert.

  4. Run retargeting campaigns

    Frequently retargeting campaigns prove to be the most effective and also the cheapest. So pay special attention to them.

    When you advertise, Facebook pixel collects data about your website visitors and connects it to your Facebook profile. The data about people interested in your product and their activities on your site can and should be used for retargeting.

    One of the top options is to remind people about the product they left in their online shopping cart. Such a technique often makes them return to your site and purchase.

    The other option is to retarget the people who visited your landing page or website during the last 30 days. They still remember your product and are much more likely to return to it.

    The important note here: don't forget to update your retargeting base regularly, and don't be afraid to exclude the people who stay blind to your ads. Try the fresh, recently-reached audience instead.

  5. Work on your ad campaign

    When you get your audience niched down, you can analyze it to get detailed information and make your campaign relevant.

    Think about the audience:

    • Tone of voice
    • Pains
    • Interests
    • Favorite influencers
    • Goals and inspirations

    Use the data to make your ad attractive to them.

  6. Reduce ad frequency

    If users see your ad several times in a row, it's likely to become repetitive and boring for them. And let's be frank, the chance they will purchase the product approaches zero.

    Furthermore, Facebook algorithms also account for ad frequency scores and don't favor repetitive ads.

    So, don't allow your ads to appear more than 3 times. Regularly refresh your campaign with new copywrite and creatives. The trick is to make it engaging.

  7. A/B test

    The only way to create the perfect ad is to keep testing, experimenting, and enhancing. The inbuilt Facebook A/B tests can become your best solution for the purpose. When working with it, keep the two main elements in mind:

    • Ad creatives. Experiment with texts, pictures, and videos. Choose the variants that make the most of your budget and keep testing.
    • Placements. Boosted posts are the cheapest ad options, which, however, don't offer precise targeting. Anyone can start with them by investing only a dollar per day. Other low-cost but more targeted variants are Instagram stories and in-stream videos.

    Need a little guidance in the world of Facebook A/B testing? Then our article Facebook A/B Testing Guide: How to Avoid 10 Common Mistakes can help you. It’ll teach you to get the most out of your tests and avoid typical mistakes in the process.

  8. Pay attention to post-click experiences

    Creating an eye-catching attractive ad is only half of the game. After interacting with it, the user moves to your landing page or website, which should correspond to several rules to make the things work:

    • Make it fast. For your site, speed is everything. Remove extra images and JavaScript, speed up your site loading time only by 1 second, and you'll be impressed by its updated performance.
    • Make it mobile-friendly. Most users will see your site on mobile, so ensure the version works well.
    • Make it personalized and accessible. The main rule is that the pages should be easy to navigate. The lower the chance that the user will get lost, the higher the probability they'll purchase in the end.
  9. Use AdBraze to automize your expenditure

    AdBraze allows you to keep all the creatives in one place and quickly access the data on their performance. It also lets you generate variations of creatives in several clicks and trace how each of them performs, so efficiently reducing the overall cost of your ad campaigns.

FAQ

Why do Facebook ads cost so much?

It's in the rising competition. More and more advertisers are attracted to the platform making the demand grow.

What is the good price for the cost-per-click?

The average CPC Facebook offers throughout all industries is $0.97. It’s also the optimal price. However, prudent optimization will help to decrease it.

What should be my Facebook ad budget per day?

The minimum budget for the campaigns billed for impressions should be $1. For more intense campaigns, expect to see the results after $5 per day. Besides, try to calculate the personal budget based on the aims listed above.

Are Facebook ads worth paying for?

They really are. Despite the Facebook ad price increases, the platform still remains one of the most optimal and cheapest places to advertise.

Outro

Advertising on Facebook isn't a steady process. By contrast, it requires unstoppable improvement and optimization with analyzing what your audience needs.

Despite the prices for advertising constant increase, our tips will help you keep things afloat and shrink your budget without losing revenue. Ad optimization with marketing platforms like AdBraze also remains the easy option to keep your ad budget low.

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