If you own a business, bidding on ad space to place ads for your company is a great way to increase website traffic as well as conversions. Not only are search engines a great location to place ads, but so are social media platforms like Facebook.
However, if you’re interested in Facebook ads, one of the first things to come to mind is likely the cost. How much will I pay for Facebook ads? Will it fit my marketing budget?
Rest assured, we’ll cover everything you need to know!
Today, we’ll talk about how Facebook ads work, as well as the average cost per click on Facebook.
Let’s get going!
Understanding Facebook ads
Way back when, businesses would pay a fat chunk of change to have their company appear on a billboard in town, or in a large ad in the local newspaper. It made sense back then since the Internet wasn’t an option, and because everyone sat down with the Sunday paper.
These days? Not so much. Social media platforms and search engines alike are both great locations for business ads, and they can help drive more traffic to your website and increase conversions overall.
However, the system is a bit different than just forking over your entire paycheck to claim ad space. With Facebook ads, it works on an auction system. It’s an extremely cost-effective marketing strategy in comparison to traditional advertising methods.
It’s no secret that you’re not the only one in your industry. Whether you have competition just down the street or in the next town, you can guarantee that someone else also wants the same ad space that you do and plans to target the same group of people.
For example, if you own a bait and tackle shop, you may want to place an ad that targets the keyword “live worms.” However, every bait shop near you likely wants to target that keyword, too. So how does Facebook decide who to give the ad space to? That’s where the auction comes in.
As a Facebook advertiser, you’ll have to decide how much you’re willing to pay for views, clicks, and even conversions. If you don’t have a clue how much you should be willing to pay, Facebook can automatically calculate a bid for you.
The number they come up with is based on your total budget, as well as how long you want your ad to run.
The ad with the highest bid and the most relevance to a given search will get the ad space.
But here’s the tricky part — determining just how much you’ll pay for an ad depends on a lot of things, which is why it’s often difficult to come up with a concrete number.
Read on to learn more about what determines the cost of your Facebook ad.
4 elements that affect cost per click on Facebook
Like we mentioned, there’s no easy answer to, “How much do Facebook ads cost?” because there are so many variables in each campaign. Here are just a few things that could cause the cost of your Facebook ad to fluctuate:
1. Peak times
Facebook ads are so specifically targeted that different times of the year, days of the week, and even the specific hour can affect the cost of your ad. For example, Christmas items will have a higher cost-per-click (CPC) around the holidays and will have a lower CPC in the summer.
2. Relevance score
Facebook will determine the relevance of your ad which is called your relevance score. Facebook calculates it based on engagement and clicks, and it can affect the cost of your Facebook ads. The more relevant your audience is, the lower the cost of your ads.
3. Your target audience
If you work in a popular industry with tons of competitors, your ads will cost more than an industry that doesn’t have a lot of competition. For example, if you work in the insurance industry, you’ll likely have a much higher CPC than someone that has a stationery shop. Every industry has its competition, but the more competition there is, the higher your Facebook CPC.
4. How you choose to bid
There are two different ways you can bid — automatically or manually.
When you opt for the automatic strategy, Facebook will set the bid for you, and you’re guaranteed to get the most post engagements for the best price. Sounds like a winner, right? Maybe. The other option is to set your bid manually. In this case, you choose exactly how much each action is worth to you.
For example, if the purpose of your ad is to get people to purchase your product, but Facebook spends most of your budget on clicks, then yes, you’ll get the most engagement. Is that kind of engagement what you’re after, though? You should focus on the return on investment (ROI) of your efforts instead of “engagements” as a whole.
Though the automatic bids are great for those just getting their feet wet with Facebook ads, you’ll likely get more overall value if you manually set your bid amounts.
So, what is the average cost per click on Facebook?
When determining the average CPC on Facebook, or the Facebook cost per engagement, it’s essential to include all industries. As a rule of thumb, business-to-consumer (B2C) businesses will typically have a higher CPC than business-to-business (B2B) companies.
After calculating the average cost per click against some of the most popular industries, including apparel, auto, customer services, legal, and technology (to name a few), the average number rounds out to $1.72.
Keep in mind that all industries are different. This is only a general baseline when it comes to the average Facebook cost per engagement.
For example, the average CPC for an apparel ad is around $0.45 per click, while an average industrial services ad costs about $2.14 per click.
Another thing to remember is that the industry averages that make up the total average are a combination of various companies within that industry. Every business is different, so even though these numbers give you a great baseline of what to expect to pay for Facebook ads, they certainly don’t provide a concrete cost per Facebook engagement.
Are you interested in getting more from your CPC on Facebook?
Whether you already utilize Facebook ads for your company, or you’re just getting started, WebFX can help you run a successful Facebook ad campaign.
We’ve been helping clients just like you get the most for their money with their marketing and advertising efforts for over a decade. Not only do we provide Facebook ad guidance, but we also offer a full suite of social media marketing solutions.
Whether you want to be more visible on Facebook, Instagram, Pinterest, Twitter, or LinkedIn, WebFX can help. Our team of over 200 digital marketing specialists has published more than 165,000 client social posts that have helped improve the bottom line of hundreds of clients.
If you’re interested in learning more about social media services from WebFX, feel free to contact us online or give us a call at 888-601-5359!