How Much Do Facebook Ads Cost ? Are FB Ads Worth It?
According to Revealbot’s live calculator, the average CPC for Facebook (cost-per-click) currently stands at $0.97 for all campaigns.
We calculate that number from the monthly CPC between February 2021 and February 2022. Facebook Ads are currently trending toward a cheaper rate when compared to recent months as of writing this article.
The question is – is the average cost of Facebook Ads worthwhile in the increasingly competitive digital marketing space?
Below, we’ll dive into how Facebook Ads cost is calculated, what rates you can expect for your business industry, and whether or not you should look elsewhere for your PPC campaigns. Finally, we’ll provide you with tips as to how you can refine your campaigns to improve your CPL (cost-per-lead) and get the most out of your advertisements.
Facebook Ads Cost – How to Calculate Your Campaign Cost?
Though Facebook isn’t keen to provide any hard numbers on costs for industries, they do clearly define how you can calculate the cost.
Of course, their reasoning for omitting hard numbers is because you technically can control your costs through smart use of your Facebook Ads account tools. Careful targeting and smart bidding strategies can certainly lower your overall campaign costs if you know what you’re doing.
However, your ad costs are effectively defined by:
- The overall amount spent on the campaign
- Cost of each result you get from the campaign
Technically, you could spend the minimum limit of $1 per day, but you shouldn’t expect to get significant results with such a limited budget. The other factor is how many qualified leads you obtain as a result of your total spending.
But, you’re not here for theoretical. You want hard numbers. Thankfully, sites like HubSpot offer a basic calculator you can use to estimate your potential costs. However, you’ll need an existing campaign history to get a better idea of how your CPC ads typically perform.
Utilizing an experienced marketing fulfillment team can also help you keep costs lower than the industry average. If you need a bit of help in getting a better ROI out of your campaigns, check out DashClicks’ Facebook Ads reseller service for more information.
Average CPC of Facebook Ads by Platform
For a more in-depth look at specific Facebook Ads cost by industry, we turn to a study by Wordstream. As of the latest update in February 2022, the breakdown of the average CPC looks like this:
- Apparel – $0.45
- Auto – $2.24
- B2B – $2.52
- Beauty – $1.81
- Customer Services – $3.08
- Education – $1.06
- Employment & Job Training – $2.72
- Finance & Insurance – $3.77
- Fitness – $1.90
- Home Improvement – $2.93
- Healthcare – $1.32
- Industrial Services – $2.14
- Legal – $1.32
- Real Estate – $1.81
- Retail – $0.70
- Technology – $1.27
- Travel & Hospitality – $0.63
These trends make sense with industries like apparel, retail, and tech likely having the widest appeal to the most users due to the necessity and low purchasing costs. Meanwhile, industries with higher barriers to entry such as home improvement, auto, and B2B will typically cost more per click and impression.
Average CPC by Advertising Platform
Next, let’s take a look at estimates of how much you could expect to pay for your PPC ads on competing advertising platforms.
- Instagram – $1.32
- Google Search Ads – $2.69
- Google Display Ads – $0.63
- Twitter – $0.38
- YouTube – $3.21
- LinkedIn – $5.26
These averages are taken from the latest available studies ranging from 2021 to the current month. As we can see, Facebook’s current average CPC remains superior to virtually every advertising platform except Twitter Ads and Google Display Ads.
However, dollars and cents only tell a portion of the story. When examining the potential CPC you can expect to pay when using an advertising platform, you also need to consider the audience and the reach that’s available to you when introducing a new advertising campaign.
Let’s cross-examine this data with recent user counts for each platform. These numbers (in millions) come from an October 2021 study courtesy of Statista.
- Facebook – 2,895 (though, this number is expected to exceed 3 billion in 2022)
- YouTube – 2,291
- Instagram – 1,393
- Twitter – 436
Not included in this study is LinkedIn, which is expected to reach 66.8 million monthly users in 2022. Of course, Google is playing a different ballgame as a world-renowned search engine and accounts for a staggering 92% of search traffic.
While platforms like YouTube and Instagram still feature a higher average CPC or CPV (cost-per-view), you also need to consider the tremendous reach potential it offers over a competitor such as Twitter or LinkedIn. While those platforms most certainly still have their place in paid advertising, there’s a reason why more popular platforms like Facebook Ads and Google Ads are such a mainstay for digital marketers.
Are Facebook Ads Worth it in 2022?
The cost of Facebook Ads is steadily increasing. The average CPC in February of 2020 rested at roughly $0.84, while the average CPC this time last year was about $0.93. As PPC ads become more expensive and are expected to steadily increase further by year’s end, are Facebook Ads worth it?
The answer is still a resounding yes.
As far as social media platforms go, Facebook is effectively untouchable when it comes to a global userbase. Their monthly user account is expected to rise year-over-year until at least 2025. While the cost of Facebook Ads is subtly increasing each year, so too is the size of potential audiences around the world.
Businesses and marketers are aware of this, and this is most certainly the source of rising costs. As the Facebook Ads platform becomes more saturated with competition, you can expect bidding costs to increase accordingly.
A more important figure than the total userbase is the percentage of users that make up the young adult to the middle age range of 25-34. This is Facebook’s largest demographic and accounts for almost 32% of its userbase with the 18-24 and 35-44 groups close behind.
Why does this matter? Because this age group represents the largest working-class, and, therefore, the individuals most likely to purchase products that you advertise. Instagram features similar metrics with 31% of users falling between 25-34 and 31% between ages 18-24. However, the dropoff in younger and older age groups is significant, making the platform a bit less viable for certain industries.
With the evidence before us, no other platform offers the level of reach and purchase potential as Facebook. Of course, if you can afford video ads, YouTube also continues to reign supreme as the number one video platform. However, Facebook suggests that their video player is effective, accounting for nearly half of user activity on their platform.
With the potential reach, ease of entry, and complete platform of tools for advertisers, using Facebook for your PPC campaigns remains an obvious choice.
How Do I Deal with Increasing PPC Costs?
While Facebook remains a marketer’s PPC platform of choice, the steadily rising costs might not be so insignificant for some companies. For this reason, you’ll need to bolster your campaign strategies if you want to avoid overspending and keep costs low, particularly if you’re in an industry with higher acquisition costs.
The good news is that rising CPC costs do not necessarily mean you need to drastically increase your ad budget to reach your campaign goals. Instead, we need to closely analyze the latest trends we’re seeing with paid ads to determine what prompts users to click more frequently.
Here are some vital tips to keep in mind when creating or updating an existing campaign.
1. Get Up Close and Personal
With the Facebook platform becoming more saturated, general, surface-level advertisements are less effective than ever.
Consider the user’s perspective: if a homeowner sees ten generic landscaping ads when looking at their timeline, there’s no particular motivation to click on any one of them. You might see it as a 1/10 chance that they’ll click yours, but the truth is that it’s even less if no offer that speaks personally to their situation. That’s an inefficient way to go about displaying your ads.
Instead, you want to take advantage of the data Facebook automatically gathers from the campaign to continuously refine your targeting and hyperfocus your new ads. You need to examine which groups show the highest level of engagement with your ads and make the effort to speak to those people personally.
While the initial reach can be helpful, it won’t amount to much if you don’t use that data to further segment your audience into carefully selected groups. In other words, it’s not only who might be interested in your brand, but what specific products or services would speak to them directly. Understand the audience, identify their pain points, and deliver the ad that’s tailor-made for them.
2. If You’re Not Tracking with Facebook Pixel – Get Started Immediately
The Facebook Pixel is a short line of code that you can add to any webpage for better visitor tracking. When someone clicks on your ad, the Pixel can immediately begin to gather data regarding their age, employment status, interests, income level, and much more. It then compiles all of this data for you to use to create more personalized ads as discussed above.
The Facebook Pixel is essentially mandatory for any landing page or sales funnel. Not only does it give data about the user, it can explain the behaviors of users who visit your web page.
Are users spending time on your page only to abandon the sign-up form? You may need to spice up your offer.
Are they getting past initial sign-up only to abandon the process mid-checkout? You need to tighten up that last sell to ensure that users are motivated to seal the deal.
Typically, the businesses that are overspending on Facebook are the ones who are either failing to utilize tracking tools or failing to make proper use of the valuable data that is gathered. It’s not an easy or quick process, but your work is never wasted. The more work you put into understanding your audience now will pay off for future ad groups and future campaigns down the line.
3. Nurture Existing Audiences
Much of this article has emphasized the cost and difficulty associated with new customer acquisition. Studies say that it can cost as much as five times more to acquire new customers than to keep an existing one.
However, there’s no getting around this fact. A business that can’t afford to bring in new customers is a business doomed to fail. This statistic alone doesn’t tell the whole story, however. While it’s expensive to get new customers to convert, that cost is ideally an investment in much more than a one-time purchase.
For this reason, you want to utilize your Facebook Ads for remarketing as well as for new customer acquisition. It makes sense that if someone is already a customer, then you already have the data you need to help build future conversions. However, you shouldn’t assume that a customer will simply buy again, but should actively nurture them and help them discover new offers that appeal to them.
Have you ever clicked on an ad, added an item to a cart, and then left the site because you couldn’t decide? You’ve likely received automated marketing emails designed to nurture you and convince you to make the purchase. This is an excellent example of highly-personalized targeting that’s nurturing someone who’s already completed several conversion goals. This type of attention to detail is what helps businesses gain even more value out of every new acquisition.
Other examples of effective nurturing strategies might include email lists or getting users to follow you on your regularly-updated social media accounts. These communications might feature your latest promo, but they can also provide free value to the customer in the way of quality content that keeps the relationship feeling personal.
4. Embrace the Video Future
It’s a bit of a misnomer to call it the future as the importance of video is already upon us. Earlier in this article, Facebook already reported that video playback accounts for nearly half of the time spent on their website. Another study from Wyzowl purports that 86% of marketers are now utilizing video as a primary tool in their marketing strategies.
If a picture is worth a thousand words, then a video is worth exponentially more. A short, well-produced video can communicate more about your brand and your offer in an ad than an entire page of copy. Users are also more likely to sit through a short clip rather than carefully read important text in your sales funnel.
Video production is also more accessible than ever. Your everyday iPhone is now capable of shooting high-quality video and sound without much effort at all. Upload it to your computer, trim the fat, add in some personal branding, and you have a video ready to go for your next PPC ad. You’ll earn more clicks, a better conversion rate, and get e out of your campaign when compared to traditional media channels.
Conclusion – Facebook Ads Are Still the Way to Go!
Facebook Ads costs are increasing year-over-year. While you can expect peaks and valleys, you can expect the average CPC to go up in your industry as a result of more advertisers joining up each day.
However, no other platform on the internet offers more global reach nor targets high-purchasing demographics as effectively as Facebook does. Furthermore, even with the rising costs, the average CPC and CPA for a customer on this platform is still lower than virtually every other social media platform.
With that said, with costs expected to rise and challenge smaller businesses, there are still ways to utilize your ad budget effectively. Take advantage of Facebook’s tracking and targeting tools to create highly-specific, personalized ads for each segment of your audience. Additionally, make as much of an effort, if not more, to nurture existing customers as you do to acquire new ones.
So long as you put the time and effort into creating the right strategy for your audience, you can continue to remain competitive on Facebook despite the rising costs. Doing so is necessary as few other platforms offer marketers better advantages to date.