Over 77 billion US dollars. That's Mark Zuckerberg's net worth. He's the only remaining Facebook co-founder and CEO of the parent company Meta. Every time you pay for Facebook ads, you're making that number just a little bit bigger.
No matter your opinion of him - it still means you're losing money - unless you know what you're doing when it comes to ads and ad spending.
Learn what to pay for Facebook success and how to make your money work for you below.
What Does Facebook Advertising Cost on Average?
You spend an average of $1.86 per click on a Facebook ad. Now if you have a product that's worth hundreds of dollars, or even $100, then that's not a big deal.
But if your item is only worth $15 dollars, you're losing out on about 2/15 of your profit. That means you need to be a little more careful when you're putting together your Facebook ads budget.
There are ways to reduce your cost per click, or at least make sure each one is more conversion-worthy. Here are some budget tips and ways to make sure you're spending your money well.
Average Monthly Cost
Most small businesses pay around $500-$1500 a month on Facebook advertising. Obviously, bigger businesses pay more than that.
Some really high ticket items spend up to $5.00 per click. If that's the right conversion budget/rate for you, then great. But how do you know what to spend per click?
Part of that calculation is knowing the industry you're in. For example, it costs a whole lot more to advertise Insurance businesses and services than it does apparel.
The average cost per click in the apparel market is about forty-five cents. The average CPC for Insurance providers? Over three dollars. That is if the insurance companies can get their ads approved in the first place on Facebook (now Meta).
Though it's unfair, the apparel services have a higher click-through rate and higher conversion rate, even though they're spending less money.
If you're looking to start a business and you have no idea what niche you want to be in, it's worth checking out the CPC costs and conversion rates.
Retail and travel are two of the other cheapest CPC niches, with okay conversion rates. The best conversion rate is healthcare or education, but that isn't noting their CPC cost.
Being on par with your competitors, in terms of ad spend, is essential.
Types of Ad-Spend
The other thing you need to think about, other than what your competitors are spending, is how you want to spend your money. Do you want to pay per click? Per action? Per like?
What about the cost per view, for videos or cost per mille, for brand awareness? These are all options Facebook gives you.
In terms of cost, it's more expensive to make a campaign where you want the person to do something. If you want someone to click play on a video, that's cheaper than paying to have someone go through an entire conversion process.
One of the most expensive types is the cost per action, which is a direct way of paying for conversions. On the one hand, it's more expensive, but on the other - you get a conversion. It depends on the cost to conversion ratio that works for you.
Most people never move away from CPC or cost per click, and that's a mistake. You need to figure out what matters most to you. A click that takes them to an irrelevant landing page isn't worth anything. In that case, you're losing money.
We'll cover how to maximize your ad-spend next.
Pay for Facebook Success: Making Your Money Work for You
There are few ways to make sure what you spend on Facebook has a high ROI. One of the most underused tools in all of Ads manager is the A/B tester.
Instead of you having to figure out which ad people like more, Facebook's software will do it for you. In essence, you can try out different products or campaigns without ever asking someone in person.
To set up A/B campaigns, you'll have to have two very similar versions of the same ad. The only thing that should be different, is what you're testing for - so the ad copy or image - or even price.
Then you set Facebook to test these ads in the same audience, and it'll automatically stop whichever ad doesn't do as well in a couple of days.
Now you have more of an insight into what your consumers like, and you only pay for two ads to run for a short period of time.
Audiences
We can't stress the importance of having the right audience on Facebook. You need to put some serious resources into audience identification if you want to succeed in any part of marketing.
Knowing who to market to is half the battle. Create a marketing persona - which is a profile of a made up person. Give them a name and characteristics. If you think hard, you probably already have these floating around in your head somewhere.
Then, when you're making Facebook ad audiences, you can model them after your personas for the best results.
Facebook Ads, Demystified
The idea that you have to pay for Facebook ads (and that's how they make money) really confused US congressmen. Now, at least in this arena, you can say you're smarter than an elected official.
These rules - paying attention to what your competition is spending, knowing your audience, and running tests work on about any platform aside from Facebook or other Meta social media.
It's normal to spend more on Google ads than you do on Facebook - unless you have a Facebook shop or store. Facebook and Instagram ad costs continue to rise, but if you understand how to use the correctly you can still derive great value from them.
Want to improve your conversion rates even more? Don't make these 10 mistakes.
