Advertising on Facebook has become a trusted method for businesses all over the world, and there are now about 7 million advertisers using the site.
When it comes to Facebook advertising, you probably have one question: What is the cost?
Below, we’ll talk about how Facebook Ads are priced, what rates you can expect for your business industry, and whether or not you should look elsewhere for your PPC campaigns.
Facebook Advertising Costs In 2023: Overview
How does the Facebook ad auction work?
It’s helpful to review how Facebook’s ad auction works before considering the different factors that affect ad cost.
Once you understand how Facebook’s ad auction works, you can start lowering your ad costs on the site.
Here’s a rundown of what happened before the Facebook ad auction:
Ad Manager is used by advertisers to create campaigns and ads.
Advertisers choose their daily budget (or the most they’ll spend each day).
The advertiser chooses what they’ll pay for, such as views, clicks, or downloads.
Using demographic, interest, and device targeting, an advertiser builds a group of people to reach.
Advertiser adds their creatives, such as their ad copy, images, and videos. Advertiser approves and launches their ad.
The Facebook ad auction takes place when there’s a chance to show an ad:
- Facebook looks at the bid, estimated action rates, and ad quality of every possible ad.
- Facebook looks at estimated click-through rates and ad quality to figure out how relevant an ad is.
- Facebook figures out how much an ad is worth based on the bid, the estimated action rate, and the quality of the ad.
- Facebook sends out the winning ad, or the ad that has the most value overall.
Your ads and their costs can be determined based on the ad auction:
- Ad bid
- Ad quality
- Estimated action rate
- Ad relevance
By making your ad more relevant to users, you can lower the cost of your Facebook ads. Even Facebook says that ads that are most relevant cost less and get more time in front of users.
Facebook Ads Cost – How to Calculate Your Campaign Cost?
Even though Facebook doesn’t like to give exact costs for industries, they do make it clear how to figure them out.
Of course, they don’t give exact numbers because you can control your costs by making smart use of the tools in your Facebook Ads account.
If you know what you’re doing, careful targeting and smart bidding can definitely bring down the total cost of your campaign.
You can, however, effectively define your ad costs by:
- Spending on the campaign as a whole
- Campaign cost for each result
Technically, you could spend the minimum of $1 per day, but with such a small budget, you shouldn’t expect to get much done.
The other thing to consider is how many qualified leads you get for how much you spend overall.
But you aren’t here to talk about ideas. You want to know the facts. Sites like HubSpot have simple calculators you can use to figure out what your costs might be.
You’ll need a campaign history, though, to get a better idea of how your CPC ads usually do.
What is the cost of Facebook advertising?
It costs, on average, $0.94 per click and $12.07 per 1000 impressions to advertise on Facebook. On average, like campaigns and app download campaigns cost $1.07 and $5.47, respectively.
Average CPC of Facebook Ads by Platform
A Wordstream study gives us a more in-depth look at how much specific Facebook ads cost by industry. As of the most recent update, which was in February 2022, this is how the average CPC is broken down:
- Apparel – $0.45
- Auto – $2.24
- Customer Services – $3.08
- B2B – $2.52
- Finance & Insurance – $3.77
- Beauty – $1.81
- Legal – $1.32
- Education – $1.06
- Employment & Job Training – $2.72
- Home Improvement – $2.93
- Fitness – $1.90
- Technology – $1.27
- Healthcare – $1.32
- Industrial Services – $2.14
- Travel & Hospitality – $0.63
- Real Estate – $1.81
- Retail – $0.70
These trends make sense, since industries like clothing, retail, and technology probably have the most appeal to the most people because they are needed and don’t cost much to buy.
On the other hand, industries with higher entry barriers, like home improvement, cars, and B2B, will usually cost more per click and impression.
Average CPC by Advertising Platform
Let’s examine how much PPC ads on competing platforms might cost you.
- Instagram – $1.32
- Google Search Ads – $2.69
- Twitter – $0.38
- Google Display Ads – $0.63
- LinkedIn – $5.26
- YouTube – $3.21
These averages come from the most recent studies, which cover the years 2021 to the current month.
As we can see, Facebook’s average CPC is still higher than almost every other advertising platform, with the exception of Twitter Ads and Google Display Ads.
But dollars and cents don’t tell the whole story.
When figuring out how much you can expect to pay per click (CPC) on an advertising platform, you should also think about the audience and reach you can reach with a new advertising campaign.
Let’s compare this information with the most recent number of users on each platform. Statista did a study in October 2021, and these numbers (in millions) come from that study.
- Facebook – 2,895 (though 3 billion users are expected by 2022).
- Instagram – 1,393
- YouTube – 2,291
- Twitter – 436
LinkedIn, which is expected to have 66.8 million monthly users in 2022, is not part of this study. Google, which is the most popular search engine in the world and gets 92% of all search traffic, is a different story.
Even though YouTube and Instagram still have a higher average CPC or CPV (cost-per-view), you should also think about how much more people could see your ads on those platforms than on Twitter or LinkedIn.
There’s no doubt that these platforms still have a place in paid advertising, but there’s a reason why Facebook Ads and Google Ads are so important to digital marketers.
Are Facebook Ads Worth it in 2023?
The price of Facebook ads keeps going up. In February 2020, the average CPC was about $0.84.
At the same time last year, the average CPC was about $0.93. Since PPC ads are getting more expensive and are likely to keep going up until the end of the year, are Facebook ads worth it?
Still, the answer is a loud and clear “Yes.”
When it comes to a global user base, Facebook is the only social media platform that can compete with it. The number of people who use their service each month is expected to grow every year until at least 2025.
Every year, Facebook ads get a little more expensive, but the number of people who could see them also grows.
Businesses and marketers know this, and it is almost certain that this is why prices are going up. As more people use Facebook Ads, you can expect bidding prices to go up.
The percentage of users between the ages of 25 and 34 is a more important number than the total number of users.
This is the biggest group on Facebook, with almost 32% of its users. The 18–24 and 35–44 age groups are close behind.
What’s the point? Because people in this age group make up the largest part of the working class and are therefore the most likely to buy the products you advertise.
31% of Instagram users are between the ages of 25 and 34, and 31% are between the ages of 18 and 24. But there is a big dropoff in younger and older age groups, which makes the platform less useful for some businesses.
Based on what we know, no other platform lets you reach as many people and sell as much as Facebook. Of course, if you can pay for video ads, YouTube is still the best place to watch videos if you have the money.
But Facebook says that their video player works because it’s responsible for almost half of what people do on their platform.
For PPC campaigns, Facebook remains the obvious choice due to its potential reach, ease of entry, and complete set of advertising tools.
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Conclusion: Facebook Advertising Costs In 2023
The price of Facebook ads goes up every year. Even though there will be ups and downs, you can expect that the average CPC in your industry will go up as more advertisers join every day.
But no other platform on the internet reaches as many people around the world or targets people who buy a lot as well as Facebook does.
Even though prices are going up, a customer’s average CPC and CPA on this platform are still lower than on almost every other social media platform.
Even though costs are expected to go up, which will be hard for small businesses, there are still ways to make the most of your advertising budget.
Use Facebook’s tracking and targeting tools to make ads that are very specific and tailored to each part of your audience. Also, work just as hard, if not more, to keep customers you already have as you do to get new ones.
Even though costs are going up, you can still be competitive on Facebook as long as you put in the time and effort to make the right strategy for your audience.
This is important because marketers can get better benefits from few other platforms at this point.