In this fiercely competitive market space, Facebook ads act as the great leveler. Be it big industries or Small scale businesses, everyone can use Facebook to reach to their target audience. Almost 7 million active advertisers are connected to over 1.6 billion people worldwide.
And so the question arises. Exactly how much does Facebook advertising cost?
A perusal of existing statistics will tell you that the average Facebook ad cost for a majority of industries lies between $ 0.5 to $ 2, per click. While finance & insurance have the highest average cost at $ 3.77 per click, apparel has the lowest at $ 0.45.
Since the space is limited and those vying for the space increasingly competitive, you cannot simply purchase an ad placement on Facebook? You have to bid against others vying for the same space and audience, and the highest bidder gets to have their ad shown. That being said, there are 6 major factors that influence how much your ad costs.
Factors that Influence Ad Cost
- Your TG (Target Group): Not all demographic groups have the same demand. Some profile groups cost more to reach than others, since the likelihood of these groups actually converting to customers is higher than others. One might be tempted to restrict one’s TG to trim down the competition but know that having small TG can actually lead to higher costs since fewer placements are available.
- Your Competition: This is by far the most important factor in affecting ad costs. Simple economics dictates that as the demand goes up, so does the price. And so the more the number of businesses trying to reach the same TG as you, the higher the ad cost.
- Marketing Objective: Your Facebook marketing strategy must be precise; the marketing objective you choose also affects the cost. In general, conversion ads like sales cost more than simple brand awareness ads.
- The Timing of Advertisements: During peak hours and peak seasons, when more (relevant) audiences can be reached, competition for ad space increases drastically. And so during Diwali or Holi, ad costs can go up. During certain hours when more people may be tempted to place food delivery orders, costs for such ads may go up, and so on.
- The Placement of Advertisements: Where on social media you wish to place your ads also has some effect on ad cost. Stats show that Instagram placements are the most expensive, at an average of $ 1.15 per click, with both Instagram feed and Instagram stories having a higher cost than Facebook. Pages with more traffic are costlier.
- Your Relevance Score: Facebook and other social media platforms have metrics that calculate the relevance of your ads to your TG. If more users engage with your ads, the relevance score goes up, and if more people mark it as irrelevant, the score goes down. Those with high scores can benefit from lower ad costs.