How much does it cost to advertise on Facebook? What’s the average Facebook ads CPC (cost-per-click) and CPM (cost-per-mile)? How to succeed in Facebook ad bidding?
This article’s going to answer all these questions. But first, here’s a quick answer to your question, based on research by Revealbot.
Facebook ads cost in 2020:
- The average Facebook ads CPC starts from $0.95
- The average Facebook CPM starts from $9.20
Facebook ads CPC in 2020 – Image source
Another important Facebook advertising cost metric that many advertisers keep their eye on is the CPM – cost per 1,000 views.
In June 2020, it cost between $7.90 – $9.90 to reach one thousand people with your Facebook ad.
Facebook ads CPM in 2020 – Image source
But that’s not all – we’ve also collected all the available statistics from across the web and added the latest data from 2018 and 2019.
After reading this article, you’ll have a much better overview of Facebook ads cost in 2020, including the answers to questions:
- How much you should pay for a Facebook ad click?
- Which Facebook ad placements have the lowest costs?
- How to lower the cost of Facebook ads?
Instead of saying you’re 100% guaranteed to know everything about Facebook advertising costs reading this article, we’ll say this: we did the best we could to give you an extensive overview!
Alright, let’s start with the most burning question:
How much does it cost to advertise on Facebook?
While there is no way to tell exactly how much you’re going to pay for a click or results on Facebook, there are some benchmarks you can follow.
For example, AdEspresso’s research of 2016 Q4 results shows that the average CPC on Facebook is anywhere between $0.20-$0.80.
Facebook ads pricing depends on multiple factors:
Factor #1. The timing of your campaign
When evaluating your Facebook ads cost, it’s important to take into account the time of year.
For example, it’s more expensive to advertise during the holidays when everyone is using Facebook advertising to increase sales.
That’s also what AdEspresso’s data shows: The most expensive months for advertising are October, November, and December.
The key takeaway here?
If your product’s sales aren’t affected by the time of year, you could spend less during the Autumn/Winter season and allocate a higher budget to Spring/Summer.
However, if the revenue you earn per sales is lower than the acquisition via Facebook ads, you should advertise all year round.
There is also a difference in your Facebook ads CPC depending on the hour of day.
As the above chart is taking into account the average per all ads analyzed, it doesn’t reflect as well on how the cost in time depends on your product.
For example, when you’re selling pizzas, people are more likely to be interested in your ads during lunch, dinner, and late at night. That’s also when your CPC will be lower.
On the other hand, promoting B2B or SaaS Facebook ads outside of office hours is likely to make those ads’ CPC higher.
Here’s an example of how a Facebook campaign’s click-through rates and CPC changes, depending on the time of day. It’s not a big difference, but when you’re tight on budget, knowing your most profitable advertising times can be a life-saver.
If you want to advertise only during specific times of day, you can use the custom ad schedule feature.
If you’re unsure what are the best times for running your Facebook ads campaign, use the automatic scheduling and let Facebook’s algorithms do the heavy lifting.
You can later check your ad reports to discover which weekdays and times of day worked best.
Factor #2. Your audience selection
There’s a high chance you’re not selling your product to the entire population.
And your cost of Facebook ads will also depend on who it is you’re targeting. For example, it costs less to reach people aged between 18-24 than those aged 55-64.
Moreover, the gender of your target audience can make a big difference in your Facebook ads pricing.
Surprisingly, it can cost more to attain Facebook Page likes from women than from men. This could be due to more eCommerce brands targeting women.
Key takeaway: The better you know you target audience, the easier you’ll find evaluating (and lowering) the advertising costs.
Factor #3. Your Facebook ad placement
When setting up your Facebook ads campaigns, you can select automatic ad placements or pick specific channels for your ads to be shown in.
For quick reference, here are the currently available Facebook ad placements:
- Facebook Desktop newsfeed
- Facebook Mobile newsfeed
- Instant Articles
- In-stream videos
- Facebook Desktop right column
- Instagram feed
- Instagram Stories
- Facebook Audience Network
- Facebook Messenger home
- Messenger Sponsored messages
Read more about all the Facebook ad types and their specs here: Facebook Ads Specs and Size (Always Up-to-date Guide)
AdEspresso’s data from 2016 shows that the cost-per-click of your Facebook ads variated greatly between different placements.
It looks that the Facebook Audience Network is the cheapest ad placement while Instagram ads cost is the highest.
However, remember that this chart only shows the cost-per-click.
What about the cost per conversion? Or cost per signup?
As Facebook Audience Network consists of thousands of different apps and games, there’s a high chance that many clicks from that channel were accidentally made.
Here’s a randomly chosen campaign example that shows the number of clicks and app installs of a Facebook Mobile App Installs campaign.
Notice that the click-to-install conversion rate in the Audience Network is only 20.8% while in the Facebook Mobile newsfeed it’s 55.4%.
So how to choose your Facebook ad placements and lower the cost?
I recommend that you run your Facebook ad campaigns with automatic placements for some time. After you’ve got some results, you can exclude the placements where costs are highest.
However, if the cost-per-acquisition in all placements is lower than your earnings from sales, keep all of them running to reach more people.
Factor #4. Your campaign objective
When creating a new Facebook ad campaign, you can choose between many objectives.
Depending on your Facebook ad goals, you’ll be paying a different amount for clicks and other types of conversions.
AdEspresso’s data shows that clicks cost most in Reach and Lead Generation campaigns.
This also makes perfect sense – the goal of a Reach campaign is for many people to see the ad, not click on it.
Tip: If your goal is to get people clicking on your ad, use the Traffic campaign objective.
When promoting your blog articles on Facebook, use the Engagement objective.
For example, there’s also a difference between the cost-per-like and cost-per-app-install.
As you can see, the different objectives also perform at different rates depending on the placement.
This is getting too confusing?
We’ll learn more about selecting the right objective and optimization methods in the second half of this article.
Factor #5. Your ads’ relevance
In the end, the cost of Facebook ads comes down to THE most important factor: is your product relevant to people?
Do they want to buy it?
Do they want to click on your ad to find out more?
Or are they looking at your ads and thinking…
For example, if Hired were promoting these carousel ads to marketers instead of developers, their Facebook ads cost would skyrocket while their campaign underperforms.
Or if Teabox were targeting different ads for people liking chai vs. black tea, their ads would probably have higher click-through rates and lower cost-per-click and cost-per-conversion.
When analyzing 104,256 Facebook ads, AdEspresso discovered that Facebook campaigns’ Relevance Score successfully predicts both the cost-per-click and click-through rate.
If your ads’ relevance is high (meaning people engage with your ads), the cost-per-click will be significantly lower.
Tip: You can see your ads’ relevance score as you break down your Facebook reports by Performance and navigate to the Ads view.
What is a good relevance score?
I would say it’s anywhere between 5 to 10 points. However, ads with relevance score of 8-10 usually have a lower cost than the rest.
How to increase your relevance score?
- Nail your USP – unique value proposition
- Create eye-catching Facebook ad designs
- Make sure your ad targeting is focused on the right audience
Now that you’ve got an overview of some numbers and benchmarks for Facebook ads cost, let’s move on and see how to set up your Facebook ad bidding.
How Facebook ad bidding works?
Facebook ad bidding works like a worldwide auction where every second thousands of transactions are made.
Even while you’re fast asleep, your ad campaigns are participating in hundreds of auctions that determine whether your ads will be shown to the people you’re targeting.
In order to win the Facebook ad auction and keep your advertising costs low, it’s important to understand how the auction works. Or for that matter, how the entire Facebook ad bidding game works.
How Facebook ad auctions work:
First, you need to know that Facebook’s ad delivery is driven by two main goals:
- Creating value for advertisers by helping them to reach the best target audience
- Providing positive, relevant experiences for people using Facebook, Instagram or Audience Network
Unlike in a traditional auction, the winner isn’t the one who makes the highest monetary bid.
It’s the ad that creates the most overall value.
Facebook relies on three factors to determine the winner of an auction: Advertiser Bid + Ad Quality & Relevance + Estimated Action Rates
Advertiser bid – that’s the bid you place on your ad sets. You can also use automatic bidding, so that Facebook’s algorithms will determine the best amounts to bid at any given auction.
Ad quality & relevance – your ad’s relevance score isn’t only important for keeping your ad. According to Facebook, if your ad has got lots of negative feedback, it may decrease the ad’s total value.
Estimated action rates – The estimated action rate is a Facebook’s calculated measure that shows how likely a person is to take the actions you’ve optimized for. Facebook needs at least a couple of results per day to be able to estimate your campaigns’ action rates. The longer your ad campaigns will run, the better Facebook can optimize them.
Every time a Facebook ads auction occurs on the background, Facebook will standardize the factors and combine them into a total measure. The ad with the highest total value wins and gets delivered to people’s newsfeeds.
Key takeaway: A high bid won’t guarantee your ads will win the auction, unless they’re also relevant to the target audience.
How to win the Facebook ad auction – Image source
How to set up your Facebook ads budget?
You can set up your Facebook campaign’s budget in the in the Budget & Schedule section during your campaign setup phase.
Up next, we’ll take a closer look at all the options you have.
In the Budget section, you can select between two Facebook features:
Option 1: Daily budget
This is how much Facebook will spend on delivering your ads every day during your campaign’s set dates.
Note that when setting a daily budget, you’re setting an average. Facebook might still spend slightly more or less each day, depending on the opportunities that arise.
Option 2: Lifetime budget
By using the Lifetime budget, you’re telling Facebook the amount you’re willing to spend over the duration of your ad campaign.
This means that on some days, you may spend $10 while only $2 on others.
Important! After you’ve published your Facebook ad campaign, you won’t be able to change the budget type, only the sums you want to spend.
Tip: If you want to switch your ad budget from lifetime budget to daily budget or vice versa, you can duplicate an existing ad set and change its budgeting method. Then, pause the old ad set.
Which budget type should you use?
Some performance marketers believe that using a Lifetime budget gives Facebook more room for optimization. However, if your campaign runs for less than a month, Facebook may not have enough data to optimize the ad delivery.
I personally prefer to set daily budgets – they’re more flexible and transparent when changed throughout the campaign.
January 2018 UPDATE
As you publish a campaign-level budget ad campaign, Facebook’s algorithms will start learning, and will allocate your budget between the ad sets so that you will get the most results at the lowest cost.
How to set up your ad optimization & delivery?
As you scroll down to the next phase of your Facebook campaign setup, you will see something like this:
Optimization & Delivery… What is it?
Basically, here’s where you can tell Facebook what is your desired advertising goal and how much you’re willing to pay for it.
According to Facebook, the campaign optimization works like this:
“Your optimization choice tells us what to value when delivering your ad. For example, you could tell us to show your ad to the people in your target audience most likely to click a link to your website (optimizing for link clicks) or to show it as many times as possible (optimizing for impressions).”
As you look at all the optimization methods for the first time, it can get pretty confusing.
Here’s a quick overview of all ad delivery optimization options together with explanations:
Conversions – When optimizing for conversions, Facebook will deliver your ads to the people who are the most likely to convert. The conversion could be a signup, purchase, app install, etc.
Post Engagement – When bidding on Post Engagement, Facebook will show your ads to the people most interested to like, comment or share your ad.
Impressions – Your Facebook ads will be delivered to as many people as many times as possible while staying within the limits of your advertising budget. There’s no algorithmic optimization regarding who is more likely to engage with your ad.
Link Clicks – Facebook will deliver your ads to the people most likely to click on your ad. With this optimization method, you’ll be charged every time someone clicks on your ad.
Daily Unique Reach – Facebook will deliver your ads to your target audience members up to once per day. That’s a good way to keep your ad frequency under control. I personally like to use frequency capping for Facebook remarketing campaigns.
Brand Awareness – Facebook will serve your ads to people most likely to be interested in your offer. You can use this delivery optimization method to make a campaign visible to a large audience. You will be charged on the basis of CPM — you’ll pay for every 1,000 ad impressions.
Should you use Manual vs. Automatic ad bids?
The next step of your Facebook ad budget setup is to select whether you’d like to use Manual or Automatic bid.
If you’re unsure how much your Facebook ads cost, always use automatic bidding.
However, if you’re interested in reaching more people at a higher Facebook ads pricing, you can set up a Manual bid to win more ad auctions.
And as you’re setting the Manual bid, there’s another set of options:
The Maximum vs. Average bid.
By now, you may start to get confused… There are TWO types of manual bids?!
Here’s what’s different about Maximum and Average manual bids.
When using the Maximum bid, Facebook’s algorithms stop delivering your ads if there’s a risk that the cost per result will be higher than your bid.
As you set an Average bid, Facebook will use the Pacing method to optimize your ad delivery for the optimal ROI.
Here’s Facebook’s Pacing explained by Smartly.io:
“Without pacing, the ad set would spend the entire budget in the beginning of the day for more expensive ads and miss the better opportunities in the end of the day. The Pacing algorithm learns the optimal bid over time.”
Here’s an explanatory table by Smartly.io, showing when to use the Maximum vs. Average bids.
Pay close attention to the last rows of the comparison table.
With the Maximum bid, you will maximize your profit. With Average bid, you will optimize delivery while sometimes paying more per conversion.
How to set the right Facebook ad bids?
When setting a Manual ad bid, you likely have two main goals:
- Get as many results as possible
- At the lowest advertising cost possible
So how can you set the right bid to keep your Facebook ad costs low but at the same time, drive enough traffic to your website?
One option is to use the bids suggested by Facebook.
The suggested bid is a sum that Facebook considers to be sufficient to achieve your anticipated result (e.g. a link click or conversion).
In the parentheses next to the suggested bid, you can see the bid range. This number shows a spectrum of bids that are currently winning auctions across the world that reach the same audience as you’re targeting.
Tip: As you check the Manual bidding method, Facebook is usually suggesting a really high bid. Make sure to change the sum in the box.
For example, if Facebook first suggests that you bid €3.10 per 1k impressions and the bid range is (€1.20–€3.40), you could bid €1.60 or even €1.25.
However, there’s an even better way for finding out how much you should bid per result.
Start running a new campaign on automatic bidding. After you’ve collected enough data about your average cost-per-result, you can change the bidding method to Manual and insert your target bid.
How to keep the cost of Facebook ads low?
Now that you’re aware of the average Facebook CPC and CPM, you may be thinking “But I want my ads to cost even less.”
Well, it’s totally possible.
But there isn’t a shortcut to lower ads costs. You need to put in some extra work and time to achieve better results.
Here’s what you’ll have to do.
1. Improve your USP
USP – the unique selling proposition – is what makes your product relevant to its users while also differentiating you from the competition.
Advertising legend Rosser Reeves explained in his book that USP has three parts:
- Each advertisement must explain a clear and relevant benefit to the consumer.
- The proposition must be one that the competition either cannot, or does not, offer. It must be unique.
- The promise must be so compelling that it can move the mass of millions.
For example, App Academy’s Facebook ad offers a clear benefit and also explains how much a person could earn after completing the curriculum.
Sometimes, it’s ok to advertise a message also used by your competitors. But try to find a small differentiator that makes your product more memorable.
There are thousands of companies selling socks in the world. However, through smart branding and great visuals, Happy Socks is able to differentiate its products from the rest.
Key takeaway: Whatever it is you’re promoting try to find the key benefit to the buyer and make sure it’s clearly readable in your Facebook ads.
Check out these 142 best Facebook ad examples for more inspiration.
2. Ensure you’re targeting the right audience
There has been so much talk about buyer personas and knowing your customers that everyone’s kind of tired of it already.
Yea, yea… Don’t come to me with another customer survey talk.
You probably know how your Facebook ad targeting should look like.
But do you really?
Have you checked the Facebook Audience Insights tool to see which demographics are most interested in your product?
You can do it right now.
Using Audience Insights, you can get aggregate and anonymous information such as:
- Demographics – Age and gender, lifestyle, education, relationship status, job role and household size
- Page likes – The top Pages people like in different categories
- Location and language – Where do people live, and what languages do they speak
- Facebook usage – How frequently are people in your target audience logging onto Facebook and what device(s) they are using when they log on
- Purchases activity – Past purchase behavior (i.e. heavy buyers of women’s apparel) and purchase methods (i.e., in-store, online)
Later on, you can create interest-based Facebook audiences that reach more people interested in your product. Or you will know what are the best locations for promoting your product.
There’s some fascinating data to be discovered.
3. Target advanced Facebook audiences
When creating new Facebook marketing audiences, don’t let yourself be limited to Saved Audiences (the interest-based audiences that are easy to create).
There are also other audience types available on Facebook: Custom Audiences and Lookalike Audiences.
And these two audience types go a long way in helping you reduce your Facebook advertising costs.
A Custom Audience is Facebook audience that’s based on the data available from the Facebook Pixel on your website/landing page. You can also create Custom Audiences based on e-mail lists or in-app actions.
If you’re interested in 10+ ideas for using Facebook Custom Audiences in remarketing campaigns, check out this article I wrote for KlientBoost.
A Lookalike Audience is a Facebook audience that helps your reach new people similar to your existing customers or website visitors. As a result, you can reach people who are likely to be interested in your product.
In the perfect campaign structure, you should be using all of the three Facebook audience types to reach slightly different audience segments.
Here’s a more in-depth article explaining how to create Facebook and Instagram target audiences.
4. Exclude past converters from your audience
A tiny yet super efficient hack to keep your Facebook CPC and CPC low is to exclude from your target audiences the people who have already converted.
You can move those people to the next step in your Facebook marketing funnel instead of delivering them the same ads over and over again.
Here’s how to exclude the past converters from your Facebook audiences:
- Create a Facebook Custom Audience of people who have visited specific web pages (e.g. your download thank you page or a blog article).
- Use the EXCLUDE feature when setting up your ad set’s audience to stop targeting people in this Custom Audience.
5. Create highly converting ad images
Consumer Acquisition has found that images are arguably the most important part of your ads. They’re responsible for 75%-90% of your ad performance.
Goes without saying that your ad’s image plays a key role in its success or demise.
There are ads that immediately catch every viewers’ attention. Like this one by Facebook for example…
… And then there are ads that just inhabit the newsfeed without anyone noticing.
Want to make sure your ads look more like Facebook’s and catch everyone’s attention?
Here are the key 8 Facebook ad design commands to follow:
- Use bright colours – a study by UsabilityTools showed that using highly contrasting call-to-actions resulted in 75% higher click-through rate, compared to a low-contrast CTA.
- Avoid plain stock photos – If you must use a stock photo, use a colour overlay to make it more interesting.
- Include icons and symbols – Create simple ad designs that mainly consist of symbols and backgrounds. Simple is efficient.
- Show your product – if your product can be represented in an image, create a Facebook ad with it.
- Test multiple ad formats – create Facebook Carousel ads or Slideshow ads to bring novelty to your mix of image ads.
- Match ad design with landing pages – Make sure that before-the-click and after-the-click have the same branded look about them.
- Use in-image text – add your value proposition in the ad image.
- Keep your in-image copy short – people prefer images light in text.
Prezi’s Facebook ad delivers the key value offer right in the ad image: “Truly engage your audience.”
6. Add videos to your marketing mix
Videos aren’t only a nice addition to your ad sets. They can significantly lower your advertising costs.
Facebook did a case study with Refinery29, comparing the results of two various campaign tactics:
- Campaign A employed creative and images focused strictly on generating subscriptions.
- Campaign B over the same period featured different “sequenced” video-first ads that first told the brand story, next provided product information before inviting people to sign up.
Refinery29 had an 87% increase in traffic to the landing page and a 56% increase in subscription rate for those people who saw the branding video first.
The key to successful video ads is engaging people during the first 3-5 seconds.
Wistia did a research and discovered that as the video length increases, the engagement drops.
It makes sense to keep your Facebook video ads under 2 minutes. Even better if you’re able to engage people with a 30-second video.
7. Write stronger ad copy
Imagine you’ve spotted a really cool Facebook ad image in your newsfeed.
Would you click on it right away?
Or would you also read through the ad copy first?
If you’re like most people, you’ll also want to know what the copy is saying before making a click, not to speak of making a purchase.
Your ad copy matters. A lot.
So how can you write great Facebook ad copy?
Here’s what Joanna Wiebe, the queen of conversion copywriting, recommends:
- Write for the click. Your ad headline should be a CTA all of its own.
- Connect “what” with “why.” State what to do – and then say why. What’s the benefit or outcome of acting?
- Focus on a single, specific thought. People can’t save time and money. They can save time. Or they can save money. Simplify.
- Use numerals and special characters. We need to draw the eye. So people won’t save a thousand bucks. They can save $1000.
- Show empathy. The more you’re in their head, the more you’re in their head.
- Use “new.” Nothing puts an itch in people like the word “new.”
- Keep it short. AdEspresso found that a max of 5 words is best for FB ad headlines.
- Mention the offer, including any incentives. That could be free shipping or a downloadable ebook.
- Make a promise. But back it up.
Here’s a great Facebook post example by Intercom that’s both actionable and makes you want to get their e-book.
8. Avoid Facebook ad fatigue
Ad fatigue is like a monster gnawing on your good Facebook ad CPCs.
But it’s main goal isn’t to make you lose the Facebook ad auction and fail miserably. Its goal is to improve the experience for people seeing your ads and bring you more sales.
Ad fatigue means that people have gotten tired of seeing your Facebook ads for so many consecutive times.
Once you hit the ad fatigue, several things will happen:
- People stop noticing your Facebook ads in their newsfeed – this means fewer attention, likes, and shares.
- People stop clicking on your Facebook ads – you will start paying more per every Facebook ad click.
- Your ad campaign’s costs skyrocket – to get the same amount of new sales, you must pay a lot more.
So how can you avoid the ad fatigue?
The easiest way to predict ad fatigue is to check your Facebook ad frequency – how many times an avg. audience member has seen your ad.
To check this metric, go to the Facebook Ads Manager, click on a campaign, and in the reporting section select the Delivery view.
You can check the ad frequency per campaign, ad set or specific ads. I recommend that you check the ad set level frequency.
Tip: In most cases, it’s best to keep your Facebook ad frequency under 2-3 points.
However, when working with Facebook remarketing campaigns, you can also let your ad frequency get slightly higher. I’ve also seen great remarketing results at the frequency of 15+ views.
Once you see your ad frequency increase and results drop, you can add new offers and ad designs to your campaign to keep your target audience interested.
For example, Lyft is using tons of different ads to catch their audience’s attention.
You can also change your Facebook target audience to reach new people who haven’t yet seen your ads and won’t have the ad fatigue.
This article has gotten way too long and you’ve probably already forgotten some of the key learnings from the first half of the article.
So here’s a quick overview of everything we covered:
- The average Facebook ads cost-per-click is around $0.20-$0.80.
- However, your cost of Facebook ads depends on multiple factors.
- That’s why, there’s no one Golden Facebook CPC.
- But you must check whether your ads have a positive ROI.
- Meaning that your cost-per-acquisition is smaller than what you’ll earn per conversion.
To keep your Facebook ads pricing low, you can:
- Improve your value proposition.
- Ensure you’re targeting the right audience.
- Start targeting advanced Facebook audiences.
- Exclude past converters from your audience.
- Create highly converting ad images.
- Test adding videos to your marketing mix.
- Write stronger ad copy that converts.
- Prevent Facebook ad fatigue.
Are your average CPCs similar to the ones mentioned in this article? Let us know in the comments!