Facebook Advertising Cost Estimates
Facebook advertising isn’t just for marketer’s and entrepreneurs. You can leverage Facebook ads to market your products and services to your target demographic. The cost of your Facebook ads also depends on which industry you’re targeting, as well as how much you want to spend and the level of target audience you desire.
There are some industry-specific Facebook cost factors that may affect the pricing and targeting of your ads. In this post, we will examine how Facebook calculates ad costs for a few popular industries and shed some light on how this may affect your ad targeting.
Facebook Advertising Average Key Metrics
Facebook ads have been offering businesses a new way to reach and target a specific demographic based on their interests. However, it’s important to know that there’s a difference between an average and average key metric, when it comes to Facebook ads.
The average metric is simply the size of the audience in the test. The key metric is the metric that’s most important to monitor while you’re using your Facebook ad.
Please remember that an average metric without knowing its actual location may inform you on the type of persons that like this product but not on the number of people that like this product.
Facebook Advertising Cost by Industry in 2022
Average Facebook CPC & Other Benchmarks by Industry in 2022
One of the main draws of Facebook advertising is the ability to target your audience according to their interests and demographics. I’m going to make a case for Facebook since it’s where I’ve seen the most cost-efficiency.
Facebook currently has 70 million active market advertisers that can reach new audiences through one-off campaigns and targeted messaging. With so many advertisers on Facebook, there are generally three different types of advertisers:
Targeted B2B advertisers Targeted small business advertisers Targeted nonprofits organizations
The best part about Facebook advertising is that you can target audience segments of any size – from a large enterprise with budget for multiple campaigns per day to a mom and pop shop, to a small nonprofit organization with little to no budget. Even if you only have the budget for a single daily campaign on Facebook, you’ll be able to target the right audience and at the right price.
Benefits of Facebook Ad Targeting …
Targeted Demographic Ad Demographics are one of the best ways to reach anyone. By targeting individuals by age and gender you can get your demographic messages to your prospects in a way that feels personal.
Industry Average Side-by-Side Comparison
According to Statista, here are the average cost-per-impression data for all industry verticals for conservative, realistic, and optimistic cost models.
This data comes from a sample from Facebook Business Manager average costs across the industry verticals.
According to this data, the health and beauty industry has the most expensive cost per impression for Facebook ads, and the retail industry has the least expensive CPC.
Facebook Advertising Cost Change From 2019 to 2022
To decide on the best FB budget for your business a lot of factors need to be considered. You need to understand Facebook advertising cost to be able to take an informed decision. That’s why Cost per mille (CPM) and Target CPA is useful.
When you have a good understanding of the Facebook market and look at the detail of your competitors, you can take the decision to Go Live or to just test the traffic and see what is the ROI of your pages and ads.
The good thing about Facebook is that it is pretty simple to understand the Facebook advertising cost or should I say Facebook CPM.
American companies have increased spending on Facebook ads to 7.3% in 2016. Marketing research has indicated that their spend for ads in 2017 is expected to reach 10%.
The increase in the business marketing for manufacturing industry from 2014 to 2016 saw the number of social media ad impressions rise from 81% to 83.5%. This number is expected to drop down to 78% over the next two years. Marketing research has indicated that the number of manufacturing companies that are expected to expect a decrease in ad impressions is predicted to increase from 29% in 2016 to 34% in 2017.
Practically, the percentage of manufacturing industry ad spend is forecast to rise from 7.3% to 7.4% in 2017 and is projected to reach 7.
Facebook Ads Cost Change Comparison
The data was acquired from fb tracking tool and used a monthly audience of 200K-300K.
Event based Facebook advertising is the most expensive, while performance based ads are the cheapest.
Industry or verticals like:
- Real Estate
- Social Media Marketing
- Digital Downloads
- Online Photography
- Online Radio
- Top Products
- Top people in a campaign are:
Top country for advertising:
US, UK, Australia, Canada, Germany, France, India, Indonesia, Pakistan, Brazil, Mexico, Argentina.
Factors That Influence Facebook Advertising Cost
In this post, we will help you investigate the factors that influence Facebook advertising costs. Why do organizations engage in these campaigns? What is the marketing objective behind each campaign? How and which targeting options are used? These questions will be answered and the different factors that influence the cost will be explained.
You might think that the information we can share is of little use for determining the advertising costs you can expect to incur. However, this isn’t the case. As a marketer, you are trying to reach a desired demographic segment that can be exploited.
The way you will choose your marketing platform will depend on the campaign objectives. This includes the type of demographics you want to reach and the medium you are going for. You need to analyze the business objectives, and measure the effectiveness of the marketing campaign.
Facebook marketing is a great platform for reaching out to people in the affluent, prosumer and affluent professional bracket. Facebook marketing is not as popular among the consumers of middle and lower class incomes.
Facebook Ads Cost by Industry
Entertainment and Marketing:
Audience Insights is a powerful tool for advertisers to deliver messaging to the right people. After the world’s largest advertising platform, Facebook, rolled out Audience Insights, it became easy for marketers to monitor, analyze, and optimize their campaigns without having to spend the time calculating and understanding changes in audience segments.
Audience Insights is all about providing a wealth of useful data to help marketers truly understand who’s engaging with ads, and what they’re looking for. Because of all the data they’ve gathered, advertisers can get real insights to target the right groups and better engage their audiences.
Here’s a list of Audience Insights device specific audience types:
Mobile Phone Mobile App Tablet Television Smart TV News Reader Computer Laptop Windows Phone Mobile Tablet Other Long Tail Categories
Here’s a list of Audience Insights device specific audience types:
The real and potential effectiveness of Facebook advertising is a hotly debated topic. The reasons are abundant: relatively low return on budgets, automatic cannibalizing of website spending from organic search, confusing performance splits between active and feed averages, salespeople always saying to stay on Facebook for a bit before jumping onto some other platform.
Facebook doesn’t have a lot of data on its advertising return (outside of the general ad budget available, its own targeting options and the one third party data it allows access to). Knowing who is buying ads and how much they are spending can give some insights. This LinkedIn study of returns by industry can help with just that.
First, combine industry into a broader marketing category: B2B services, education, finance, government etc.
We can then group individual industries by returning (top 10% of industry return) and by cost per acquisition (CPA). For example, we’re grouping B2B services together since they are largely the same.
We see some interesting conclusions:
Returning top of list: Mobile Applications (~85%)
Top of the list for return: Concentrate on mobile apps with the highest return per CPA. Next, split testing and app promotion and get right into the Facebook feed. Drop the Distraction ads and do direct response ads
Facebook Ad Objectives
Online advertisements are a marketing tool that many companies use to increase brand awareness and their visibility in the online world. When being used properly, they can also be used to drive additional customers to a website or make a product look more appealing to potential consumers.
Objectives are the goals you want your Facebook ads to accomplish. Learn how to set the best objectives for your Facebook ad campaign and discover how to set up winning campaign goals…
Conditioning is a form of marketing in which a marketer aims to change a consumer’s tendency to act without reference to the marketer’s stated motivation. The most basic form is "planned32:" when a marketer attempts to affect customer behavior by communicating with key customers before they are influenced by competition. With proper product planning, management, and brand image advertising, brand loyalty can be developed.
Segmentation is a form of marketing in which different groups of consumers are targeted with specialized communication that is typically more focused on benefit and use. Some common uses of segmentation include:
- Targeting new online customers with direct mail or marketing mail that focuses on general "welcome" type offers
- Sandwiched ads allow companies to target proposals to selected groups of people based on segments.
There is a strange fascination with how pages pay Facebook for an ad. As a Facebook marketer focused on business, you could spend hours wondering about all of the different variations of paying Facebook from CPC ads to CPC conversion ads to CPM ads to CBF ads to post paid ads. If you ever watched advertising industry TV shows, you might have thought at some point that all of those industry acronyms meant something different. Well, maybe they did.
So what do you do if you’re in the CPA (Cost Per Action) industry and you want to sell ads? You create a call to action with the message, ‑Click here to buy ads.” It doesn’t matter.
The difference between cost per click and cost per action (or conversion, depending on which sales channel you’re using) is not an industry secret. I’ll explain why cost per action advertising is more effective than cost per click advertising, but I won’t dilute the truth by adding industry talk about CPC ads and CBF ads.
Facebook Ad Placements
Facebook Ads let marketers showcase their online product or service, in a highly effective way. Its targeting capabilities, viewer-based ads, video ads, intuitive interface, low cost, and customer’s ability to review ad campaigns make Facebook Ads the most preferred platform by business owners now-a-days for advertising their products and services.
However, for any business to survive and succeed, marketing strategies for their products and services is a paramount task. Winning over customers’ attention and profits through targeted ad campaigns is the way to go. And Facebook helps businesses achieve this purpose by providing them with highly targeted audiences to reach out to.
According to industry experts, the US is the second largest advertising market after China. So Facebook Ad Placement is considered to be a vital business strategy for companies that often do not have enough budget and do not have enough time to implement marketing strategies.
In the United States, Google AdWords campaigns are more effective than Facebook ad campaigns due to their Targeted Search placement. It’s because of its vast customer base who’re familiar with its products, have used them before, and are most likely to make purchases based on the ads they see on Google AdWords.
We have gutted our data science team to help us prepare for launch. This is a quick note to say that information is still changing and that some links/information is wrong in the auction data. Please wait for our data team to publish tables before jumping to conclusions based on incorrect information below.
These are estimates based on our research and is not a quote from the platform or the company. Facebook does not release a percentage by industry so these estimated means are based on our estimates of ad quality, targeted audiences and other factors.
Please send us a message on twitter if you want us to add more information.
The following tables contain ad quality % of spend estimates for different niche industries. Granted these are not the only niches in existence, these tables are meant to merely get you started as an informed advertiser.
Additionally, this data is for the North American Market only and all figures are in USD.
These tables can help you make more sense of the platform and what quality of ads work for different niches. The higher the Ad Quality score the more the ad is likely to perform for your niche audience compared to other ads. Facebook allows advertisers to set bids based on the ad quality so the higher your ad quality score the higher the bid you would use.
How the Facebook Ad Auction Affects Ad Cost
These days it’s hard to find an online campaign, without the presence of Facebook Ads. This is why, it’s important to understand how the Facebook Ad Auction affect the cost of advertising.
Simply put, the Facebook Ad Auction is a bidding algorithm that puts all advertisers in a competition against each other to ensure a fair price for advertisers.
All advertisers know how much it costs to get new customers. However, knowing an exact figure, is certainly not enough to calculate the correct amount of money you should spend on every advertising campaign.
The Facebook Ad Auction allows advertisers to set their maximum and minimum bids. The highest bidder wins, and the price for the winning bidding algorithm is applied. For income generated based on the number of Facebook ad impressions, it’s important to consider the price per impressions. This is why the Facebook Ad Auction doesn’t only affect the cost of advertising but also the price per impression.
The Facebook Ad Auction provides a fair market price for advertisers, which helps Facebook generate higher advertising revenue. For this reason, Facebook have adapted their advertising auction for the financial industry.
Next, we want to look at how the Facebook Ad Auction affects advertisers, who aren’t-affiliated websites in an industry.
How to Estimate Return on Ad Spend (ROAS) in 5 Steps
Estimating return on ad spend (ROAS), or return on marketing investment (ROMI) is the activity of measuring return of your advertising efforts in terms of cost. It’s an important metric for determining the return on marketing programs, especially in the social media marketing arena.
Like revenue, ROAS is another metric that businesses can simplify through the use of formulas. Having a formula that can easily produce a ROAS estimate can help your company determine if the costs of your marketing programs are meeting your target business goals. And of course, as stated earlier, the ROAS metric is especially critical to social media marketers.
While ROAS formulas can be complicated, there are five basic steps that you can take to estimate your ROAS in any industry.
Step 1: Calculate Paid Media Expenses and Traffic
This is the widest ranging step because it involves estimating paid marketing expenses. You can divide your ROI calculation across almost any industry and these calculations can vary by marketing channel, depending on where you’re spending your money.
Key marketing metrics such as CVR, CAC, CSAT, etc.
Targeted mediums such as Facebook, Twitter, Instagram, etc.
Sizes of ad units such as ads, apps and display ads.
Cost per acquisition, cost per click and cost per install.
Determine Your Estimated Monthly Ad Spend
Facebook Advertising Pricing is based on an Advertiser’s individual placement policies so there is no true industry standard for Facebook costs. However, we’ve found that there is a good correlation between monthly Ad Spend and the cost per 1,000 fans for 3 different target groups. In general, the more fans for the target group, the lower the cost per 1,000 fans.
Having the amount of Ad Spend and monthly Ad Spend in mind will help you determine what size of Ad Pack to purchase for your business.
The Ad Spend and Monthly Ad Spend is estimated based on your target audience, industry, and your Ad Pack. The Ad Spend is estimated using Facebook’s Advertiser Dashboard and the monthly Ad Spend is based on the number of fans averaged over the last 2 years.
Please note, these are estimates and not firm numbers. Actual costs may vary from these estimates.
When you are ready to learn more about how to get started with Facebook Advertising, check out Facebook Ad basics … before anything else.
Calculate Your Estimated Monthly Clicks
Facebook Ads provide a fun and affordable way for business owners to target their marketing budget. However, setting up an advertising account and creating a custom audience is only the first step towards expanding your business reach on social media. Before you know it, ads will be going live and you can start seeing your numbers swell and your expenses dwindling as you start seeing higher click-through rates and conversions.
Still, the devil is in the detail. Each ad comes with a cost and you’ll need to know how to calculate your budget to ensure you’re running an efficient campaign. Fortunately, there’s a quick and easy formula to figure out how many clicks your Facebook ad will require before shelling out the cash.
All you need is two simple values:
- Estimated monthly clicks
- Estimated monthly CPA
Typical B2B ad costs about 7 cents per click to reach an audience of 3,000 people. Because you already know how many people you want to reach and you aren’t concerned with our time-to-conversion ratio, you can focus directly on your revenue objective. Knowing that you can expect your CPA to be 7 cents per click across the board, you now need to figure out your targeted CPA.
Estimate Your Monthly Conversions
Facebook Ads are the most cost effective way to market your e-commerce store but there is no one size fits all strategy in Facebook advertising. There are huge differences in the cost per conversion and the number of monthly purchases for e-commerce businesses. In order to get the most cost effective strategy you need to learn about your conversions, saleable units and customers, competitive advantages, industry averages and the other variables you should be thinking about.
Identifying the Average Cost per Conversion
First, you’ll need to identify your average cost per conversion. Use the PageLift platform to crawl your Facebook fan page and understand all your funnels, demographics and interests:
‒Your Facebook fan page is the starting point to understanding your customer. Crawl your fan page using our platform and understand the hardware and software the customer is using, what they are interested in, and what they do on Facebook. Our unique technology delivers the most accurate results and data to make informed marketing decisions. Get started and take advantage of the cost savings of PageLift now.”
Monitor your PPC advertising on Facebook to understand what the most converting tagline or headline are and which one typically converts the most.
Once you’ve identified the most converting tagline, you can use a spreadsheet to translate your cost per conversion into a unit cost.
Estimate Your Potential Ad Revenue
One of the most popular ways to advertise is through Facebook Ads. Facebook provides you with the ability to target your potential audience based on purchased information and a variety of ad options available based on your budget.
Facebook Ads are the most powerful form of advertising on the internet as you can target your audience specifically and the cost is lower than other forms of advertising.
Each industry has their own cost-to-revenue ratio, and in order to make a profit, you must hit that ratio.
Below are some industries and the Facebook Ads Cost per Click (CPC), Cost per Mille (CPM), and the number of impressions generated.
You will also find the conversion (sales) metrics and the average cost per sale.
The data is culled from ChartBoost and provides average values for the industry.
Click here to view the data on Facebook Ads Cost by Industry.
Determine Return on Ad Spend
Frequently Asked Questions (FAQs)
First and foremost, Facebook ads have a granular targeting like any other platform. You can target your desired audience based on city, age, demographics, income, interests, hobbies, etc. A single ad can be targeted to ten different audience groups.
What’s more, advertising on Facebook is quite inexpensive. Facebook typically takes 30% of the advertising revenue, which is much less than other ad network rates.
There are other advantages of making Facebook advertising:
- Larger Audience Target: Facebook has more than 1 Billion active users with a lot of them available to target.
- Customizable Ads: Facebook ads can be tailored to suit your brand’s image.
- Analytics: Facebook provides stats about your ad, which other cross-platform ads do not.
- Customer Engagement: Facebook ads can push your brand’s conversation beyond the platform which results into increased customer engagement and better ROI.
Some frequently asked questions on how much Facebook advertising cost are:
How much does it cost to advertise on Facebook?
What is the Facebook pixel?
The Facebook pixel is a device that scrapes data from your website’s visitors. It allows you to track how a visitor navigates through your site. You can then pass this information to Facebook and use it to optimize your Facebook ads.
It’s NOT a Revenue
This is a cool tracking tool to know how people interact with your site. Facebook uses the tracking to build better advertising products, so this is important for the users.
Factors that Affect the Conversion Rate
There are many factors that can affect the conversion of people who visit your landing page. A factor that makes a huge impact on your Facebook advertising campaign is: the Facebook pixel.
Effect on Facebook Ad Pricing
The Facebook pixel is tied to your website’s historic conversion data. Facebook uses this data to help ensure that the advertising products being bought are targeting the right audience.
From a Facebook user’s perspective, the more you pay, the better the advertising you receive. With white label Facebook advertising, you can pay whatever is necessary to get the advertising products you need.
If you are interested in subscribing to our Facebook pixel, simply complete the form below. We would love to hear what you think of our Facebook marketing tools.
Which is cheaper: Google Ads or Facebook Ads?
What are the best ways to target Facebook ads?
As with any marketing campaign, there are different ways to reach your target audience to promote your page or content. There are many Facebook ads you can run but this guide is just focusing on the most effective ways to get your brand out there.
Though it’s important to have a good strategy in place, you’ll want to be flexible as well. Your audience will be different depending on your vertical and location, so you’ll want to constantly test different options in order to reach your the right people.
CPC vs. CPM
As previously mentioned, there are two distinct options for your Facebook advertising: CPC and CPM. One important thing to note is that you can only target ads and advertisements based on interests, so if you’re unsure of who you should advertise to, you can always try targeting based on location and interests.
For example, if you’re a lifestyle photographer, your audience would be a lot smaller than if you were a skincare brand, so reaching your audience with an advertisement would be much easier if you went with a CPM option.
Now that we’ve covered the different options, we can take a look at how specific industries are performing on Facebook.
Where can I find a Facebook Ad management service?
Facebook Ads Cost by Industry: Facebook has one goal, and that is to make advertising on their platform as affordable as possible. When it was started in the late 1990s and early 2000s, the Facebook Ad system was far more simple and direct. Like Google AdWords, clients would create ads, directly and solely to their logical customer base. In the beginning, the company charged advertising service fees to businesses for their Ads. As the platform grew, and business users began to scale using the platform, the Facebook Ad system became more streamlined.
More advanced targeting features were introduced, and businesses began to use the platform as a pure Ad system, focusing their ads towards the sphere of interest of their clients. And over the years, the platform tailored its Ads system to fit the needs of its audience. A simple and direct system was eliminated, replaced by an automated system to make the offers that each targeting selection had in common.
The system also began to simplify how campaigns are created and monitored. And after a few years, the Facebook Ad system became a greater than ever marketing tool. And the costs associated with using the platform began to jump.
Every year, the Facebook Ad platform continues to get better, more targeted and more efficient. The company is committed to keeping their system current and expanding service to clients.