By Elmalla A. on October 22, 2017
Originally written for HalalWorld.
The short answer is $0.65 per click in the US. In other words, every $65 you put into Facebook gives you around 100 clicks on your ad, according to the Salesforce Advertising Index Q3 2015. The long answer is that Facebook advertising cost can be anywhere from $0.16 to $1.00+ per click, depending on your industry, the size of your audience, and the quality of your ad.
Facebook Advertising Cost by Industry
|Food & Beverage||$3.99||$0.19|
Data from Salesforce Advertising Index
- Cost Per Click (CPC) – the cost for 1 click to your website
- Cost Per Mille (CPM) – the cost for 1,000 impressions, or views of your ad
Entertainment businesses tend to pay the lowest for Facebook ads. This is likely because such ads – which can include juicy click-bait and music videos – are naturally engaging and appeal to a wide audience. Automotive businesses have a surprising place in second. Although, when you consider that just about every American household has a car, this isn’t all that surprising. On the other end of the spectrum are professional services, like medical doctors and lawyers.
Why Local Businesses Might Pay More
If you’re a local business like a restaurant, the audience that you want to reach is much smaller than the entire country. It may be limited to a city or even a neighborhood within a city. The great news is that Facebook enables you to target right down to the city or even zip codes. Your advertising will not be wasted on people that live 100 miles away from your business, like it might be with television, radio, or a regional paper. The bad news is that a small local audience may have many other local firms bidding for it, in addition to national advertisers that want everyone. In other words, you shouldn’t be surprised if your costs are closer to $1.00 per click. Also, there is another reason why a local business may have a higher cost per click (CPC) than a national advertiser. Big advertisers spend a tremendous amount of time testing and optimizing their social media ads. If an ad’s not working well, they try another one. This increases their performance and brings their cost per click down over time.
CPC vs. CPM
On Facebook, there are a few different ways to make a bid. You can pay for each action (i.e. somebody clicking your link or “liking” your page), or you can pay for each time somebody views your ad. If your goal is to encourage a certain action – such as getting people to click on your website – you should always select that option. This is because Facebook will show your ad to people who are more likely to complete that action. When you optimize for impressions, your ad may get shown to more people overall, but not necessarily those who will follow your link or “like” your page. On Facebook (and in the digital marketing world in general) these two concepts are denoted as follows:
Calculating your Cost-Per-Customer (The Only Cost You Need to Care About)
Cost-Per-Customer is the one number you need to watch. It is the cost of getting one person to buy from you. All of the other cost numbers are just parts of the equation for calculating your final cost of getting one new customer. Here’s how to calculate it: Using Facebook’s built-in CPA tracking, where we can first get the cost of the initial action the user takes on our website. If that action is to make a purchase, then your CPA is equal to your Cost-Per-Customer. But if your action is to download an ebook, sign up for a newsletter or some other form of lead-generation, then you need to add one extra variable to the equation: CPA x (Number of Leads that Buy / Total Number of Leads)
Why some target audiences have higher CPM and CPC ?
In a nutshell, the more advertisers there are for a particular target audience, the higher the cost will be to advertise to it - basic supply and demand. If you’ve ever run Google Adwords, you’ve experienced the same thing. The more people try to advertise for a particular search keyword, the more it costs to advertise for it. Under Principle #3, Optimizing your Ad Spend (Budget), we’ll look at how to find the lowest CPC and CPM for your Target Audience.
What is CTR and How Does it Affect Facebook Advertising Costs ?
CTR (Click-through Rate): This is the percentage of people who click on your ad divided by the total number of people who saw your ad. For example, if 100 people see your ad and only 1 of them clicks on it, your CTR is 1%. Unlike Google Adwords, Facebook does not have any documented Quality Score. For Google Adwords, your Ad’s Quality Score is affected by how high your click-through-rate and long-click-rate (number of people who stay on a website after clicking on an ad for it). Unfortunately, this is not the case yet for Facebook Ads.