What’s the Cost of Facebook Ads?

Last Updated on: 8th November 2024, 02:08 pm

As of this post (2024), when you consider Facebook Ads costs, you’re looking at around $1.68 per click and $8.70 per 1,000 impressions. On average. 

And while that might make you go “Got it, Claire, thanks!” I’d like you to stick around for a bit. 

Here’s why: those numbers represent the CPC and CPM across all industries. That’s what benchmarks do: they essentially crunch the ad costs of several industries to reach a very general, wide estimate.

For example, another company’s statistics say that the average CPC for Facebook ads “ranges from $0.30 to a couple of bucks.” It’s like saying my target audience is people between the ages of 25-50. 

Doesn’t really narrow things down, does it?

With that in mind, today we’ll talk about what causes Facebook ad costs to soar or drop, and what you can do to drive better results. All within a fair and transparent budget.

Let’s dive in!

How Much Do Facebook Ads Cost Based on Industry?

Facebook Ads costs can vary significantly depending on your industry. According to data from WordStream, here are the (very general!) 2024 benchmarks for different industries. Where does yours stand?

• Animals & Pets: $0.76
• Apparel / Fashion & Jewellery: $1.11
• Arts & Entertainment: $0.44
• Automotive – For Sale: $0.70
• Beauty & Personal Care: $0.88
• Business Services: $0.84
• Career & Employment: $0.70
• Dentists & Dental Services: $1.27
• Education & Instruction: $0.79
• Finance & Insurance: $1.11
• Furniture: $1.19
• Health & Fitness: $0.90
• Home & Home Improvement: $0.95
• Legal Services: $1.15

Besides Industry, What Affects Your Facebook Ad Cost?

Competition and Cost-per-Acquisition (CAC)

When I say that the finance and insurance sectors might see Facebook Ads costs around $3.77 per click, while the apparel industry might only pay $0.45 per click…some of my clients scratch their heads.

Why is there such a huge leap?

It all boils down to competition and acquisition costs. 

In my article on Google Ads costs for 2024, I mentioned that many businesses reverse-engineer their CAC to figure out their target CPC. 

Here’s a practical example: suppose your CAC (the amount you spend to acquire a new customer) is $100, and you know that on average, 10% of people who click on your ad make a purchase. 

Your target CPC would then be $10 because you need 10 clicks to get one sale.

In highly competitive industries like finance, where each customer can bring in lots of revenue, companies are willing to pay more per click to acquire those high-value customers. This willingness to spend more translates into more expensive bids for Facebook ad placements. 

How Campaign Type Affects Facebook Ads Costs

The CPC for Facebook ads also varies between lead generation campaigns and traffic campaigns.

Lead gen campaigns aim to capture user information directly within Facebook, often through forms, making them more valuable and often more expensive (because they’re built to generate high-quality leads). 

On the flip side, traffic campaigns focus on driving users to external websites, which is a less direct engagement and typically costs less. 

So, in short, Facebook charges more for ads that have a higher likelihood of generating valuable leads compared to those that “just” drive clicks to a site. 

However, if you’re clever about your targeting and have the necessary Facebook Ads management experience, you can easily leverage the more affordable traffic campaigns to generate conversions.

Ad Quality and Relevance

Ad quality is another critical factor. Facebook uses a relevance score (now part of the more complex “ad relevance diagnostics”) to determine how well your target audience receives your ads. If you’re familiar with the Google Ads Quality Score, the relevance mechanism operates similarly on Facebook, too!

Low relevance scores can drive up your Facebook Ads costs because Facebook’s goal is to get people to see ads that are relevant to them. The rules are quite simple and include the following:

• Optimising for your advertising objective
• Targeting a better audience
• Improving ad copy and creatives
• Improving calls-to-action
• Split-testing different targeting strategies, creative, optimisation goals, and post-click experiences whenever possible

At the end of the day, you need to use best practices for advertising in general and apply them to Facebook Ads. 

How Can You Lower Facebook Ads Costs?

Review and Adjust Your Facebook Ads Bidding Strategies

Your bidding strategy (or a lack thereof) could be costing you.

The bidding option you select can make a big difference. Automated bidding lets Facebook optimise for the best results, but manual bidding gives you more control (which I’ll eternally recommend). 

That’s not to say you can’t use automated bidding. I recommend that you test both methods. In the beginning, I always recommend using manual bidding so you regularly review your account’s performance and see which targeting or assets generate the most valuable Facebook Ads conversions, adjusting your bids accordingly.

It’s only when you know what works for your account that you can scale it with automated bidding!

Make Sure You’re Targeting the Right Devices and Locations

If your audience primarily engages with your ads on mobile, prioritise mobile placements. Sounds simple, but it can make a massive difference. 

Facebook Ads Manager gives you insights into engagement across different devices. You can access this data by going to the “Breakdown” menu in your Ads Manager and selecting “By Delivery” followed by “Device.” This will give you a detailed view of how your ads are performing on mobile versus desktop.

Similarly, some regions might be more cost-effective than others. For example, targeting users in major metropolitan areas might cost more than in smaller towns due to higher competition. As you already know, competition is a big portion of your Facebook Ads cost. 

Schedule Your Ads When They’re Most Likely to Perform Well

Scheduling your ads to run when your audience is most active can reduce Facebook Ads costs as well. There’s no point in running ads at 3 AM if your audience is fast asleep. 

When your ads appear during peak activity times your target audience is more likely to see them. As long as you base peak activity on your audience insights – not general benchmarks!

Use Facebook’s ad scheduling tool to show your ads during peak engagement times. Go to your Ads Manager and start creating or editing a campaign. When you reach the “Budget & Schedule” section, look for the “Ad Scheduling” option. This option is available if you choose a “Lifetime Budget” for your campaign. 

Here, you can select specific days and times when you want your ads to run.

If Your Facebook Ads Cost Is Too Much, Work with a Professional

I believe a lot of people have been burned by their lack of knowledge in ads. 

No matter if it’s Facebook, LinkedIn, or Google…people try the ads for themselves and realise that something isn’t working. Due to a lack of time, they can’t afford to test 20+ methods and understand the best way to approach them. In some cases, as with LinkedIn Ads, the CPC cost is too high to experiment and “see what sticks.”

If you’re a beginner, it’s normal to make mistakes and get frustrated about them. That’s why it’s a whole career in itself. I myself have spent 15+ years studying, perfecting, and teaching ad strategies.

This is why I recommend anyone to start off with an experienced partner right away!

How Much Should You Budget for Facebook Ads?

Before I answer, I’ll throw two questions back at you:

• What is your CAC?
• How far do you want to go with Facebook ads? (Are you aiming for a handful of clicks or do you want to build a lead generation facility?)

Let’s say your average cost to acquire a customer is $50. If your conversion rate is 10%, you’d need 10 clicks to make a sale, so you should budget around $5 per click.

Now, if you’re aiming for more than just a handful of clicks and want to see some real traction with your Facebook ads, you’ll need to set a reasonable daily budget. 

On average, I recommend starting with at least $25 per day. This amount gives you enough leeway to gather data, test different creatives and audiences, and make necessary adjustments without spending too much.

That said, start small and scale up. 

Begin with a daily budget you’re comfortable with. Monitor your results closely, and as you identify what works, gradually increase your budget to pile up those successes.

When Are Facebook Ads Not the Best Lead Gen Strategy?

I’m all for honesty over disappointments. Despite their potential, Facebook ads aren’t always the best choice for every business. 

Whether you’re using Facebook Ads or any other ad platform, the core considerations are the same:

If you’re only using Facebook Ads to generate leads during slow periods, you’re taking a reactive approach, using ads as a “quick fix” to address immediate crickets in business activity. This can be effective for short-term boosts but may not help you grow significantly in the long term.

On the flip side, if you’re using Facebook Ads to expand your market share, you’re proactively investing in ongoing growth. This means regularly running ads to reach new audiences, increase brand awareness, grow your customer base…the list goes on.

That said…

Your budget shouldn’t only reflect your business goals! It should account for your operational capacity, as well. 

If you want to expand rapidly, you’ll need a bigger Facebook ad budget. However, your business needs to be able to handle the increased demand. 

In one of the cases with my PPC customers, the ads we had set up together started generating so many leads that they didn’t have enough people to answer phones!

Are Facebook Ads the Best Option for You?

My two cents: you can absolutely cut your Facebook Ads costs and dramatically improve your campaigns with the tips from this blog alone. However, if you want to fill in the gaps, read my Ultimate Guide to Facebook Ads. 

Interested in a customised solution that will fit your goals and provide expertise without requiring you to become an expert at Facebook Ads? Reach out to me and my team of Facebook Ads experts! 

We’ll make sure every penny in your budget goes toward attracting your ideal leads!