360 Degree Media Group Blog

How Much Does It Cost To Advertise On Facebook?

Posted by Amy Baker on Apr 18, 2014 6:00:00 AM

If you specialise in a unique niche, your budget will much lower.

If this niche is unpopular with your audience it will be higher. This however, should not be taken to mean that it is impossible for small businesses dealing in common products, with small budgets to advertise on this social network.

In reality, Facebook advertising costs should not be seen as “costs” at all, but rather as an investment in the growth of your business. The actual price of an advertisement on Facebook varies greatly and depends on how many competitors are targeting the same demographic.

Before setting up your budget, it is important to understand how advertising on Facebook works.

Price of Facebook Advertising and Cost of Facebook Marketing

Facebook Advertisements' Cost Models

There are two ways in which Facebook price their advertisements:

  • Cost per click (CPC) is a model in which you pay for every click on your advertisements
  • Cost per impression (CPC) is a model in which you pay for every thousand people who see your advertisement.

As mentioned earlier, the more businesses competing for a certain demographic, the higher the cost of running an ad, but in general, CPM is a cheaper option, though you will receive fewer clicks. CPC will provide you with a higher click through rate, but is more expensive.

The savvy businessman will test both models and see which one works best for their business.


Facebook Advertisement Prices And Click Through Rates

The click through rate, the rate at which your ads convert into leads, is another factor in determining the cost of ads on Facebook. The higher your click through rate, the higher Facebook ranks your ad in terms of quality, and the better your ad quality, the better your chances of winning at ad bidding auctions. Auctions determine not only the price of an ad, but also which ads are given priority.

Facebook utilises an algorithm to determine the quality of each ad. Chances are if your quality score is low, you will lose in the auctions.

Price of a Facebook Ad Social Media Marketing


Optimise Your Ad Campaigns On Facebook

Not only does Facebook score you against other advertisements, but also checks the quality of your own ads against each other, thereby optimising them. When you first put up an ad campaign on Facebook, they all get the same exposure but eventually Facebook will identify those that have a high conversion rate and run those to maximise your exposure.


How To Cut Your Facebook Advertising Costs

The fact that Facebook automatically optimises your ads is a good thing when you’re trying to increase your conversion rates. However, this practice may prove to be counterproductive. The reason for this is that an advertising campaign usually features different ads, targeting different demographics and not every ad will receive the same amount of traffic. In this case, it would be better for a business to create many campaigns, with few ads, which will force Facebook to run all the Facebook ads for a while, before giving them a quality score.

When you create an advertisement, Facebook will send you an estimated maximum bid. This amount is based on the amount of money that other advertisers are willing to pay per click for their ads. You can set your own maximum bid price manually if the average cost per click is high compared to the max bid. However, if you lower your bid price too much, you will most definitely lose out in the auctions and none of your ads will get any impressions. Ensure that you carefully monitor your campaigns to prevent this from happening.


The cost of ads on Facebook is not set in stone but is dictated by the bids.

Generally speaking, Facebook ads cost much less than Google ads and offer businesses a great return on their investment. They are also a great way to build an engaged community of loyal fans and to spread the word regarding the products and services you offer.

Facebook provides an informative help page specifically geared to help marketers get the most out of using the social network in their marketing strategy. It also provides important data such as the number of conversions on your fan page, as well as monitoring traffic and other vital statistics key to determining the best use of your advertising budget. 


Are you looking for Facebook advertising ideas, suggestions, and examples?

For more information regarding how you can run a successful Facebook campaign, simply download our free case study by clicking the link below:


The 360 Degree Marketing Group Facebook Competition Case Study For Business Owners

Topics: Cost of Facebook Advertising, cost of Facebook marketing, Marketing On Facebook, Price of Facebook Advertising, Facebook Advertisements, Facebook Campaign