Whenever you are about to get started with advertising on Facebook, the first question that comes to your mind is – how much is this campaign going to cost me? And wherever you try to look it up to find a specific figure, the only answer you seem to get is – it depends; which actually happens to be the most accurate answer. However, there’s no need to panic, it costs less than you think. To get you started on what the cost of advertising on Facebook can look like here are some average figures for you:
- The average global CPC (Cost Per Click) rests at $0.35
- The cost per app Install ranges from an average of $3.70 to $10.30
- The cost per like shows huge variations. It can start from$0.10 and go up to $2.70 based on various factors
Now, let us discuss in detail the various factors that drive how the budgeting of ads happens. Discussing all the factors at length is beyond the scope of this article, however, we will try to incorporate all the important ones that you need to know. The first thing that you need to understand is that a huge parameter in how Facebook decides the cost factor on your ad is how or whether it decides to show your ad. While showing your ad, Facebook tries to strike a balance between two factors viz:
- What is the value that the ad creates for advertisers
- What is the value that the ad hold for the audience or how relevant it is to them
Facebook assigns a relevance score (1-10) to all the ads that go live on Facebook and in keeping with the causal tone of the platform, the more your relevance score, the less Facebook is going to charge you for your ad. Now for the factors that go into making your ad relevant. Because, obviously when you target your ad using the Facebook ad tools there are, you try to air it to the people to whom it will matter ie people to whom your ad is relevant.
How Optimized is the Objective of your ad
When you create an ad of Facebook, you need to define the objective of your ad; is it aimed at generating website traffic or is it to make a sale. Based on the objective that you will specify, Facebook ad tool will work to show your ad to the people to whom it is most relevant. For example, if you are selling cat food, and you select an audience who says they are interested in cats, you may end up showing your ad to people who just want to see a nice cat video. This isn’t relevant to them or to you. Hence, purchasing behaviour is also an important parameter that you need to insert to make your as more relevant.
The audience that you are targeting
Since Facebook has all the audience insights to make your targeting easier, the charges are different based on who your target audience is. As per data collected from various Facebook marketing partners the cost is higher if you are targeting an exclusively female audience. The cost of an ad will also be more when you target the senior age group of 55 and above.
Timing of your ad
The timing of your ad is a huge factor that affects the cost. For example if you are planning to roll out an ad around special occasions like holidays and festivals, you will certainly have a lot of competition and the ad will cost more. Of course if you do it right, you will also get more. The cost of the ad also depends on the day of the week and time of the day. Ads will cost lower during the earlier hours of the day but you don’t want to do that unless you are targeting people who are up during those hours. Similarly, ads that go live on Fridays cost the lowest while ads that come out on Tuesdays and Wednesdays cost more.
Estimated Action Rates
Facebook also decides upon the cost of the ad basis how likely a person is to take a certain action after watching your ad. If your ads invite low action rates, then it is going to cost you more, because the ad seems to have low relevance score.
Over to you
Apart from these, there are several other factors that go into deciding the cost of your ad like the industry you belong to, the quality of your ad, the placement of your ad etc. Before you start pondering over how much you should be spending, remember businesses are more about the revenue curve than the cost curve. Whatever you are spending, will bring you more returns if you spend it the right way. For example, even though it costs more to target the older population, it pays off because these are the people with higher income, less debt, and more disposable income to spend on you. It is easier to convert these customers into buyers. Of course, this is a huge topic and we are barely scratching the surface, but with these pointers, you can work on intelligent advertising which will bring you better ROI.