How Much Do Facebook Ads Cost?

A lot of people are hesitant to try Facebook ads because it’s obviously paid advertising and they are unaware of how much do Facebook ads cost. This post will look at the various factors which determine how much do Facebook ads cost while offering some Facebook advertising tips to help get that cost much do facebook ads cost

Before we get into it, let’s remember that YOU get to choose how much you pay because you choose your maximum bid to get your ad to be shown. Obviously if you’re not willing to spend enough based on Facebook’s estimates of what it should cost to get that ad shown, your ad will not be displayed.

So where do these estimates come from and how do they relate in how much we’re actually paying?

Facebook looks at the number of ads which already exist which are related to your niche. The more competitive a niche, the more you’ll be paying. When you design your ad, thus choosing your title/body text, image, and the kinds of people whom you want to be targeting with your ad, Facebook can get an idea of how much you might be paying based on demand and other existing ads. They’ll come up with an estimated range of a low to a high of how much you might expect to be paying.

With or without this estimate in mind you’ll then set your maximum bid accordingly – but it doesn’t stop there.

How Much Do Facebook Ads Cost

Most instrumental in determining how much do Facebook ads cost for you is your click through rate or your CTR.

So let’s say that you run an ad which gets 200 clicks on its first day. Your ad was shown 1000 times over the course of that first day when you generated 200 clicks. That’s a CTR of 20%, or 20% of the people who had your ad displayed on their Facebook pages clicked on it. That’s a very healthy click through rate, by the way.

Similar to Adwords, the higher your CTR, or the more clicks your ad gets per the number of times it appears to people (the higher that ratio is), the less you’ll be paying per click. The logic here is that Facebook sees a healthy and high CTR as being representative of a very good, relevant, and targeted ad; just the kind of ads which Facebook wants to be showing on its site to its users, so you are rewarded with a lower cost per click.

While Facebook recommends a suggested bid range as I mentioned which you can use as a guideline of where to set your maximum willing bid price, you might find yourself paying far less than this because your ad has proved to yield a very high CTR.

Remember that if you’re not getting any impressions or in other words no one is seeing your ad then may have to raise your bid or work on your ad, just like in Adwords.

You may also find that your CTR is high when your ad first begins to appear but then starts to drop as more people see it. Swap out your image or text and keep testing to get that CTR up. As a general rule which I operate by, 10% isn’t a bad CTR and if you can maintain it then that may be an ad worth keeping.

Also, I want to finally note that there are two payment structures which you can choose from in terms of how you pay to have your ads shown: CPM and CPC.

Cost per measure or CPM refers to how much you’re paying for every 1000 impressions of your ad, or every time your ad appears 1000 times on Facebook, you pay the agreed upon fee.

Conversely, cost per click or CPC refers to you’re agreeing to pay ONLY when someone clicks on your ad. So how much your Facebook ads cost will also depend on which plan you go with.

While it may not make sense to you at first, generally speaking your CPM is going to appear to be about half of your CPC when designing a new ad because it operates under the assumption that a lot of people will view your ad without clicking on it, well more than 1000.

These are hypothetical figures but this is why some people prefer to spend say $1.50 per click to get one person to their website through the CPC setting as opposed to spending $0.80 to show their ad to 1000 people through the CPM setting. They feel they have a better shot with the sure thing that is CPC as opposed to gambling on simply paying to show their ad with no guarantee anyone will ever click on it.

I recommend that if you’re first starting out that you stick with CPC until you get the hang of things. Once you design an ad which has a proven high CTR, THEN you might consider creating a CPM campaign just for that ad because you know that people have a proven track record of clicking on that ad at a high ratio.

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