Facebook ads have become an essential part of any business’s marketing strategy. With over 2 billion monthly active users, Facebook provides access to a massive audience. But running successful Facebook ad campaigns requires a budget to pay for the ads. So how exactly do clients pay for Facebook ads?
Prepayment
The most common way for clients to pay for Facebook ads is through prepayment. This involves depositing money upfront into an ad account on Facebook. The client can then use this ad account balance to pay for their ad campaigns and ads as they run. There are a few different prepayment options:
- Credit card – Clients can pay by credit card to deposit money into their Facebook ad account. This allows them to start running ads right away. Facebook accepts Visa, MasterCard, American Express, and Discover cards.
- Wire transfer – For larger prepayments, clients may need to do a wire transfer to Facebook. This allows them to deposit tens of thousands or even hundreds of thousands of dollars into their ad account.
- ACH transfer – Clients can also do bank transfers via ACH in the US to deposit money into their Facebook ad accounts.
- PayPal – For smaller prepayments, clients can use PayPal to deposit funds into their Facebook ad account.
The benefit of prepayment is that it allows clients to pay upfront and then run ads until that budget is used up. There’s no risk of ads stopping due to non-payment. The downside is that clients have to deposit the money before knowing exactly how much they’ll end up spending on ads. So it requires estimating budgets in advance.
Post-payment
Facebook also offers a post-payment option for larger advertisers who meet certain qualifications. With post-payment, clients don’t have to prepay for their ads. Instead, Facebook bills them for their ad spending after the ads have already run. This billing is done on a monthly basis.
Post-payment allows qualified advertisers to run ads without having to fund an ad account upfront. But Facebook does impose credit limits, and accounts may be suspended if the balance goes unpaid. Post-payment arrangements are usually made between Facebook sales representatives and larger advertisers directly.
Minimum ad spend
Facebook does impose some minimum ad spend requirements for setting up payments:
- Prepaid credit card payments require a $5 minimum.
- Wire transfers require a $100 minimum.
- ACH transfers require a $30 minimum.
- PayPal transfers require a $15 minimum.
For post-payment accounts, the minimum monthly ad spend is around $5,000. So Facebook does limit smaller businesses and those just starting out to prepaid options.
Payment methods
Let’s take a deeper look at the specific methods clients can use to deposit money into Facebook to pay for ads:
Credit Cards
Paying by credit card is the easiest prepayment option for most clients. Visa, Mastercard, American Express and Discover cards are accepted. When clients set up the Facebook ad account, they can enter their card details. This allows Facebook to charge the card when the account balance runs low.
Facebook does charge a 2.9% + $0.30 transaction fee for credit card payments. This helps offset the processing fees Facebook pays to card networks. Prepaid debit cards also work the same as credit cards.
Wire Transfers
For clients spending $10,000+ per month on Facebook ads, wire transfers are a better option than credit cards. Facebook waives the 2.9% transaction fee on wires. This saves larger advertisers money compared to stacking up credit card fees.
Wires allow advertisers to deposit tens or hundreds of thousands of dollars into their Facebook ad account in one transfer. Domestic US wires usually only take 1-2 business days to clear. International transfers may take 3-5 days.
ACH Transfers
ACH bank transfers are available for advertisers based in the United States. This allows advertisers to transfer money directly from their bank account into their Facebook ad account. It takes 3-5 business days for transfers to clear.
ACH transfers avoid credit card processing fees, so they are a cost-effective option. They work best for advertisers depositing at least $1,000 at a time, due to the $30 minimum transfer.
PayPal
For smaller advertisers, PayPal can be a good option to deposit funds into a Facebook ad account. It offers more flexibility for paying less than $1,000 at a time. PayPal does charge a transaction fee, so it works better for smaller transfers versus wires or ACH.
The money in a PayPal transfer will be available to spend on Facebook ads as soon as the transfer completes successfully. This makes PayPal a quick option compared to waiting several days for wires or ACH to clear.
Offline Payments
In some countries, Facebook may offer additional offline payment options. For example, in India advertisers can deposit money at a bank branch directly into Cleartrip’s Unified Payments Interface (UPI) ID assigned by Facebook. This allows paying for Facebook ads through India’s UPI network.
Advertisers in other countries may be able to pay offline through bank transfer or cash deposit. The availability of these offline options depends on the country and Facebook’s payment partnerships in that market.
Payment currencies
Facebook ad accounts can be set up in a variety of different currencies. This allows advertisers to pay for their ads using a currency that suits their business’s operations:
- USD – United States Dollar
- EUR – Euro
- GBP – British Pound Sterling
- AUD – Australian Dollar
- BRL – Brazilian Real
- CAD – Canadian Dollar
- CHF – Swiss Franc
- DKK – Danish Krone
- HKD – Hong Kong Dollar
- HUF – Hungarian Forint
- ILS – Israeli New Shekel
- JPY – Japanese Yen
- MYR – Malaysian Ringgit
- MXN – Mexican Peso
- TWD – New Taiwan Dollar
- NZD – New Zealand Dollar
- NOK – Norwegian Krone
- PHP – Philippine Peso
- PLN – Polish Zloty
- RON – Romanian Leu
- RUB – Russian Ruble
- SGD – Singapore Dollar
- SEK – Swedish Krona
- THB – Thai Baht
- TRY – Turkish Lira
- INR – Indian Rupee
When advertisers make payments, the money will be converted to the currency of their ad account. Facebook uses exchange rates that are competitive with banks and other providers.
Payment partners
In some countries, Facebook enables additional payment options through partnerships with local payment providers. For example:
- India – Paytm, Mobikwik, Freecharge
- Indonesia – DOKU
- Brazil – Boleto Bancario
- Vietnam – ViettelPay
- Turkey – Hepsiburada
These local payment partnerships allow advertisers to pay for Facebook ads using popular payment methods in their country. The payment partner handles converting the local payment method into a deposit into the advertiser’s Facebook ad account.
Managing Facebook ad payments
Within Facebook Ads Manager, advertisers have control over managing their payment methods and viewing payment history:
- Can update payment methods on file – replace existing card, change bank account, etc.
- View balances – see current ad account balance
- View transaction history – see past deposits, ad spend, refunds, etc.
- Set up billing alerts – get notified when account balance is low
- User controls – assign roles to control payments
These controls allow advertisers to stay on top of their Facebook ad payments. Multiple users can be given access to control payments as needed.
Taxes on Facebook ad payments
Clients will be responsible for paying any taxes due on their Facebook advertising in their country. In the US, Facebook will send a 1099 form if an advertiser spends over $600 in a calendar year. The 1099 reports gross advertising spend to the IRS. It’s then up to the client to deduct any ad expenses on their taxes.
Clients should consult with a tax professional to understand their obligations. Sales tax may also apply to Facebook ad payments in many US states. Overall taxes vary greatly depending on each client’s location and type of business.
Returns on Facebook ad spending
On average, top advertisers earn $2-$3 for every $1 spent on Facebook ads. However, the return on ad spend varies greatly based on many factors:
- Audience targeting – Who is being shown the ads?
- Creative quality – Do the ads grab attention?
- Landing page experience – Can you convert visitors?
- Offer/product – Are you promoting something compelling?
- Optimization – How quickly are you improving?
With the right strategies, clients can potentially achieve 10x or even 20x returns on their Facebook ad investments. But the advertising must be well-executed to realize this level of return.
Conclusion
Paying for Facebook ads will represent a significant investment for most businesses. But when done effectively, the returns from Facebook advertising can be well worth the cost. The key is using the appropriate payment methods for each client’s needs and budget, managing payments carefully, and optimizing ads for maximum results.