Facebook ad is one of the best advertising methods that you can use for promoting your products or services on the Internet. It allows advertisers to target specific customers based on their own criteria. Before you start advertising your products with Facebook Ads, one of the most important things that you have to consider is the advertising cost.
You need to calculate how much it costs to see whether your budget is enough for promoting your online business on Facebook. So, how much do Facebook Ads cost in 2020? Keep reading to learn more about the widely concerned subject!
Facebook Ad Costs Depend on Bidding Model
You need to understand that some bidding models are available in the Facebook Ads program. Different bidding models may have different costs. For example, the average cost of the Facebook Ads cost per click (CPC) model is around $0.97 per click. This average cost per click Facebook Ads can also be affected by other factors. When you choose the cost per impression (CPM) bidding model or Facebook sponsored ads cost, you are going to spend up to $7.19 per 1000 impressions on average.
Some other bidding models will target any action-taker customers. For these customers, you can use both costs per like (CPL) or cost per download (CPA) strategies. The CPL bidding method will cost you about $1.07 on average, while the CPA will cost about $5.47 on average. The total ad costs depend on many other factors, such as ad placement, industry, and target market.
6 Determinants of Facebook Ad Costs
When you are planning to figure out the total costs for the Facebook marketing strategy, you need to look at some factors that will determine the Facebook Ad costs. You need to understand how any of these factors can influence the overall Facebook ads. You can calculate the total how much do Facebook Ads cost by using any of these factors.
1. Audience
According to the in-depth study from AdEspresso, Facebook advertising costs can be affected by the target audience. When you shift the criteria of your targeted customers, such as interest, gender, age, etc, you are going to see a significant change in your advertising expenses. For example, If you target women customers, your CPC will be more expensive than other campaigns that target men customers.
You need to select the right target for your products or services. You should focus on any potential customers who can offer the most value for your business. Your targeted audience should have a good correlation with any of your products or services.
2. Ad Budget
When you start creating an ad campaign on this Facebook platform, you are going to set up an advertising budget. You can set up whether it is around $200 or $800 per month. This amount of ad budget will impact on how much total advertising costs for your business.
This budget will affect your ad performance, ad bids, and also the overall performance of your advertising campaign. A large ad spend can give you additional flexibility. You need to understand that the low-ad budget can limit the performance, so it will result in fewer conversions.
3. Ad Bid
This is another important factor that will determine the overall Facebook ads cost. Facebook allows you to choose your bidding strategies, including the low-cost bid strategy or the target cost (manual) bid strategy. Manual bidding strategy usually comes with higher advertising costs than the low-cost bidding strategy (automatic system).
Aggressive bid tends to increase the total costs of your marketing campaign and raise the total Facebook advertising costs significantly. You need to combine the best bidding strategy with a high-quality ad for improving the performance of your ads.
4. Ad Objective
When you start creating your Facebook ads, you are going to choose your main ad objective. Facebook offers some advertising objectives, such as brand awareness, reach, traffic, app installs, engagement, lead generation, video views, messages, product catalog sales, store visits, etc. More valuable ad objectives, such as product purchase or a store visit, will lead to high ad costs.
You can consider using awareness and consideration as your ad objectives. Both objectives have low ad costs, but they can offer real and tangible value for your business. You can let other people know and recognize your business before they decide to buy any products or services from you.
5. Ad Quality
When you want to create the best and most effective Facebook ads, you should take a look at this important factor. The relevance and quality of your ads will affect the total Facebook advertising costs in your business.
When you create any ads with high engagement and relevance scores, you are going to reduce the total advertising costs significantly. Your ads can receive a Facebook rating which can be around 1 – 10. You can check both relevance and engagement scores via your Ads Manager menu.
6. Season
Not many people know this secret. Several events in a year may impact the total costs of the Facebook ads. During peak shopping seasons, many business owners are going to advertise their products or services. More demand for ad space will increase in creating a competitive marketplace.
This situation will lead to aggressive bids and also big campaign budgets. Some of the most expensive days to promote on Facebook Ads may include Black Friday, Thanksgiving, Cyber Monday, Boxing Day, Christmas, New Year's Eve, New Years' Day, etc.
How Does Facebook Ad Auction Work?
First, Facebook will grade any potential ads' bids, estimate their action rates, and determine the quality of their ads. Facebook will use the estimated action rates and also ad quality score for determining the total ad relevancy. Facebook will generate the total value of the ad, based on the bid, ad quality, and estimated action rates. Facebook has its own Facebook ad cost calculator for determining the result of the auction.
At the end of the process, Facebook will deliver the winning ad with the best total value. 4 main factors will determine your success in winning the ad auction on Facebook, for example, ad quality, ad relevance, estimated action rate, and ad bid. When you optimize any of these metrics, you will be able to improve your ads' quality and relevancy to the users.
Facebook Ads Cost & Dropshipping
Advertising on Facebook is proven to be a great way to drive sales in dropshipping. Many online retailers set up Facebook business pages. Traffic comes naturally as long as there are a certain number of Facebook users who are interested in your offers. In this way, you don't need to wait for too long to get the first orders and ensure sustainable growth.
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Wrapping up
After learning the facts behind Facebook Ads from this page, you need to learn how to start optimizing this Facebook Ads program for boosting the ad performance. With Facebook ads, you can target a lot of potential customers on Facebook easily. However, don't forget to prepare your budget to pay for the cost of Facebook ads.
