Facebook advertising remains a popular – and lucrative – marketing strategy for businesses of all sizes. With the right Facebook ads, you can draw in customer clicks, promote engagement, and convert that interest into sales.
Facebook is so effective, in fact, that in 2019, 7 million advertisers generated $69.7 billion in ad revenue for the company. (And that was before the pandemic boom of 2020 and the inflation bust of 2022.)
On one hand, that shows just how much success you can find on the platform. On the other, so much competition can drive up costs and eat up precious ad space.
Fortunately, you don’t need a multi-billion-dollar advertising budget to drive traffic and generate sales. You just need to hone your strategy and make the most of the budget you have.
And to do that, you need to know: How much does Facebook advertising cost?
First Up: The Facebook Ads Auction
Facebook doesn’t want to flood users’ News Feeds with ads and drive them away – especially bad Facebook ads.
To prevent that from happening, Meta limits advertising space across its platforms.
And to determine which advertiser wins a spot, ads on Facebook enter an “auction.”
How Do Facebook Ad Auctions Work?
The ad auction process is fairly simple.
After creating your Facebook ad campaigns, you set “bids” for the auction. You can bid on three specific actions:
CPM, or cost per mille (bid per 1,000 impressions)
CPC, or cost per click (bid per click)
Bid per conversion
Once you publish your ad campaigns, Facebook holds an auction anytime there’s an opportunity to show your ad to your target audience.
Each ad then competes against other Facebook ads vying for the same audience and bid metrics.
Facebook Ads Auction Grading
To determine the winner, Facebook grades your ad based on:
Each advertiser’s bid amount
The estimated action rate and ad relevance or how likely a person is to engage with the ad
Quality, which is based on factors like user feedback or sensationalized language
Then, Facebook delivers the winning ad – the one with the highest total value out of this process – to the ad spot in question.
Because bid value is only one component of the auction process, it’s possible for even smaller businesses to benefit from Facebook marketing.
You can also use your understanding of these metrics to improve each ad’s quality – something Facebook itself says can lower your costs and increase the number of views each ad receives.
The (Not-So) Quick Answer: How Much Do Facebook Ads Cost?
Unfortunately, the answer is both simple and complex: it depends.
The social media platform does offer some limited control over your Facebook ad spend. For instance, you can set daily budgets, weekly budgets, or campaign-level budgets. You can also optimize for specific actions like clicks, downloads, or sales.
When you can’t control is how much generating each action costs. Per-action costs vary widely based on factors like your:
Audience
Industry
Time of year, month, and day
Audience targeting strategy
Ad content and quality
Understanding how these factors influence your ad costs means you can work the system to drive down expenses while pumping out the best possible ad creatives.
Facebook Ad Budget
One of the first metrics you should weigh in your Facebook ad costs is your total and daily budget.
On one side, a larger budget offers more flexibility and increases your competitiveness. (Though you risk wasting more of your Facebook ad spend than necessary.)
On the other, smaller budgets typically mean you have less to spend per ad bid, which reduces your competitiveness at auction. Smaller budgets may also take longer to exit the Learning phase, prolonging the volatility of your spend.
Generally, strategists recommend a daily budget of at least $5, or $150 per month. Anything less than that will likely limit your performance, and therefore your conversion potential.
Facebook Ad Bid
Stemming from your budget, your ad bid also impacts your advertising costs. You can choose from three basic strategies, divided between automatic bidding and manual bidding.
Spend-based bidding strategies aim to use up your budget to produce results
Highest volume bidding tries to place your Facebook ads in front of the most people at the lowest cost
Highest-value bidding tries to place your ad where it’s likely to drive larger sales or lead generation
A goal-based bidding strategy aims to optimize your budget for specific action
Cost per result pushes for more conversions while keeping your costs relatively steady
ROAS (return on ad spend) lets you set the desired ROI and lets Facebook Ads Manager optimize your bids to try to reach it
A manual bidding strategy lets you set your own bid caps to optimize your strategy manually
Facebook warns that bid cap strategies are meant for advertisers who understand Facebook’s algorithms and conversion goals
Facebook Ad Objective
Facebook’s ad objectives direct each ad’s goal and dictate factors like placement and ad formats.
Generally, objectives that turn sales or leads cost more than objectives that merely increase views or build brand awareness.
That said, don’t mistake lower Facebook ad costs for uselessness. In social media advertising especially, raising awareness is often the first step down the sales funnel.
After all, if a customer doesn’t know you exist, how can they consider you for a purchase?
Facebook Ad Quality
Facebook rates each ad it receives based on quality and audience relevance.
These metrics are determined by factors like user feedback (for instance, engaging with or hiding your ad) as well as using sensationalized or baiting language.
Building relevant Facebook ads that deliver on expectations and drive more Facebook traffic tend to lower your overall ad costs.
Note that your ad format also plays a role here.
While Facebook doesn’t charge different rates for different formats, pointing the wrong format at the wrong audience suggests a mismatch between your ad strategy and your audience research.
You can check your Ad Relevance and Engagement Score in the Facebook Ads Manager under the “Columns” dropdown menu.
Bear in mind that the site requires around 500 ad impressions or views before it can accurately score your Facebook ads.
Facebook Ad Placements
Your ad placement across Meta sites – including Facebook, Instagram, and the Audience Network – also influences your Facebook ads cost.
Where you place each ad directly impacts your visibility and the chances of engagement.
Generally, higher-profile locations cost more, while lower-profile locations can reduce your click potential.
Depending on your industry and the specific ad and placement, you may find your Facebook ads cost less than Instagram ads or vice versa.
Audience Network ad costs can fluctuate based on their exact placement and campaign objectives.
Facebook Ad Engagement Metrics
Facebook carefully tallies how often (and how) Facebook users engage with your ad through likes, comments, and shares. These feed into your quality score, which helps Facebook rank your ads quality, engagement, and conversions.
Facebook also measures your click-through rate, which can impact ad costs if your ad messaging disconnects from your target audience. Generally, higher CTRs lead to lower advertising costs.
You can watch these metrics in the Ads Manager under “Campaign > Ads for Campaign.”
You want to aim for average or above-average metrics; anything under that is a sign that you could use some improvement.
Audience
Generally, targeting wider audiences lowers your Facebook ad costs. Broad-strokes targeting tends to be less competitive, as your Facebook ads can pit for more space, not less.
On the other hand, targeting smaller audiences may also increase your conversions. For many
Facebook advertisers, higher per-action costs are worth the price of jacking up your ROI.
Think of it this way: would you rather see three $10 sales for $5 from a broad audience, or thirty $15 sales for $75 from a narrow one? When you put it into perspective, you may find that a higher ROI outweighs your increased Facebook ads cost.
Industry
Your industry has an outsize impact on your ad costs. Industries that advertise more produce more competition, which increases your per and monthly ad spend.
The worst culprits come from the finance, insurance, and certain consumer services industries.
High-frequency industries can easily see ad costs five, ten, or even twenty times higher than low-frequency industries.
Unfortunately, there’s not a lot you can do to bring these costs down yourself.
If you’re in a competitive sector, your best bet is to create high-performance Facebook ads to offset higher bids.
Season
Facebook ad costs tend to skyrocket in the holiday seasons as advertisers ramp up their ad spend.
While you can get more customers, increased traffic also drives up the number of competitors per auction.
November and December often see the highest rates of the year. Certain industries also peak in spring (Valentine’s Day and Easter) or summer (for instance, 4th of July in the U.S.).
Time of day also matters, though not to the same extent. Bids tend to cost less at night when user and advertiser traffic declines.
So, How Much Does Facebook Advertising Cost?
Due to the sheer number of variables, giving an average Facebook ad cost is a bit like trying to hit a bullseye backward and blindfolded.
Sure, you could hit the mark…or the dart could fly ten feet in any other direction.
While your exact ad spend may differ, we will try to set a benchmark for what to expect going in.
(Bear in mind, these are average Facebook ads costs, which means those in high-frequency industries will likely spend much, much more.)
Facebook Advertising Costs: Clicks
Cost per click (CPC) measures how much you spend to get one click on your Facebook ads.
In 2022, the average CPC on Facebook ranged from $0.45 at the trough (October) to $1.20 at the peak.
Factors like declining ad spend due to inflation helped pushed down the numbers for part of the year. But general patterns still held true: holiday seasons saw higher costs, while doldrum months were cheaper overall.
CPC also varies widely by campaign objective. On average, video views cost the most, peaking at around $6.
Lead generation ranged between $1 and $4, while brand awareness swiveled between $1 to $4.
Facebook Advertising Costs: Impressions
Cost per mille (CPM), or cost per impression, denotes how much you’ll pay to show your ad to 1,000 people on Facebook.
In 2022, the average CPM on Facebook ranged from $6 at its lowest to $17 at its highest.
Again, inflation and lower ad spend played a part.
However, the average CPM held steadier for most of the year compared to CPC – around $8, plus or minus $1. That indicates that, overall, CPM costs are less volatile (until the holidays, that is).
From an ad objective POV, lead generation cost the most on average and peaked as high as $25-30.
Facebook Advertising Costs: Overall Engagement
CPE, or cost per engagement, measures the cost of your Facebook ad campaign overall.
CPE accounts for engagement metrics like clicks, comments, shares, clicks, and more.
While many advertisers don’t rely on CPE as a primary performance metric, it’s helpful for gauging your audience’s general receptiveness.
In 2022, the average cost per Facebook engagement ranged from $0.05 to $0.20
Key Takeaways: Optimizing Facebook Advertising Costs for Your Brand
You can spend as little or much as you want on Facebook advertising costs every year. Some businesses spend just $50 per month, while others spend millions on Black Friday alone.
When it comes to your own strategy, it’s essential to weigh any potential returns against your expenditures.
Consider how much you’re willing – and able – to pay for metrics like brand awareness, traffic, or conversions.
Then, put your budget and creative teams to work making the perfect Facebook ads happen!