Facebook ads can be an extremely effective way for businesses to reach new customers and drive sales. However, many small business owners and marketers wonder how much they should actually budget for Facebook ads each month.
The cost of Facebook ads varies widely based on factors like your target audience, bidding strategy, and campaign objectives. While some businesses spend $100 or less per month, others spend over $10,000 on Facebook advertising every month. The average small business spends around $250 per month on Facebook ads.
Average Cost of Facebook Ads
According to a survey by WebFX, the average small business spends $9.00 to $99 per day on Facebook ads. This works out to around $270 to $2,970 per month. They also found:
- 26% of small businesses spend $100 or less per month
- 21% spend between $100 to $500 per month
- 18% spend between $500 to $1,000 per month
- 11% spend between $1,000 to $2,500 per month
- 8% spend between $2,500 to $5,000 per month
- 16% spend over $5,000 per month
So while monthly costs vary quite a bit, most small businesses are spending somewhere between $100 to $1,000 per month on Facebook advertising. Those just starting out often spend around $250 per month as they test out different audiences and strategies.
What Impacts the Cost of Facebook Ads?
There are several key factors that influence how much you’ll end up spending on Facebook ads each month:
Target audience size
The size of your target audience directly impacts the cost of your ads. Targeting a larger audience of millions of Facebook users will be much cheaper than going after a smaller niche audience. Highly targeted ads often cost more per click or impression.
Location
Your geographic location settings also affect cost. Targeting larger countries like the United States or India is typically cheaper than smaller countries. Targeting a single city or region will likely be more expensive.
Ad placement
Where your ads show up makes a difference too. The Facebook news feed is the most competitive placement so costs are higher. Instagram feeds, Instagram stories, Messenger, and the audience network tend to be less expensive.
Landing page quality
Facebook carefully monitors the quality of landing pages. Ads directing users to high-quality, relevant landing pages generally have lower costs than those pointing to poor or irrelevant pages.
Bid strategy
How you set your bid strategy when launching a campaign also impacts cost. Manual bidding gives you maximum control but requires more expertise. Automatic bidding options like cost cap and optimize for conversions are easier to set up but may have higher costs.
Ad budget and schedule
Your overall ad budget and schedule influences cost as well. Larger ad budgets and very broad schedules tend to result in lower costs per click/impression. Smaller budgets and limited schedules mean fewer impressions, which drives up costs as Facebook ramps up bids to spend your budget.
What Campaign Objectives Cost the Most?
Certain campaign objectives inherently have higher costs associated with them. Here are some of the campaign objectives that tend to cost more than others:
Lead generation
Lead generation campaigns aim to collect contact information from users through forms. Since this is a very valuable action, Facebook bids aggressively to get form fills, resulting in higher costs per lead.
Catalog sales
Driving direct online sales of products in your Facebook catalog comes at a premium. These campaigns optimize for purchases and app installs, both extremely valuable actions.
Brand awareness
Brand awareness campaigns are focused on reach and impressions rather than direct response. This requires showing your ads very broadly to new audiences, which is more expensive than targeting existing fans.
Store visits
If your goal is to drive foot traffic to a retail location, these campaigns bid up to get users to visit stores. Since in-store visits are harder to track, it costs more to optimize for them.
5 Tips to Reduce Your Facebook Ad Costs
Here are some proven tips to help cut costs on your Facebook ad campaigns:
1. Refine your target audience
Take the time to really understand your best customers and tighten up your target audience to laser focus your ads. Eliminate broad targeting and zero in on specific demographic and interest targets.
2. Improve landing page experience
Analyze your landing pages and optimize them to increase relevance to your ads. Improve page speed, user experience and conversion rate. This will result in lower costs over time.
3. Test different bid strategies
Try different bidding options like lowest cost or cost cap bidding to maintain control over max bids. Set smart bid limits instead of relying solely on Facebook’s automated bidding.
4. Create quality ad copy & creatives
Continuously test ad copy and creatives. Find the best performing combinations of imagery, video, and text that get attention and clicks but also convert users once on your site.
5. Monitor competition
Keep an eye on competitors’ ads and stay on top of trends in your industry. This can help you refine targeting and creatives to beat competitors’ performance.
Facebook Ad Cost Calculators
Facebook provides some useful calculators to estimate your potential ad costs:
Potential Reach Calculator
This tool lets you enter targeting details to see estimated reach size and top-line cost estimate. Gives you an idea of minimum budget to achieve your reach goals.
Ad Set Budget Estimator
Generates estimated daily budget recommendation based on inputs like objective, reach, clicks or impressions. Helps calculate an ideal budget for your campaigns.
Automated Bidding Estimator
Plug in your inputs and this tool will estimate the optimized cost per result that automatic bidding will target based on your settings.
While not exact, these estimators can provide ballpark figures to structure your budgets and campaigns.
Tools to Track Facebook Ad Costs
Here are some essential tools to help track and manage your Facebook advertising costs:
Facebook Ads Manager
Facebook’s own Ads Manager provides detailed campaign cost data and analytics. Track real-time metrics on cost per result and ROI plus historical performance.
Google Analytics
Connect Google Analytics to track website conversions and ROI from your Facebook campaigns. Attribute sales and leads back to ads.
Excel or Google Sheets
Download your Facebook Ads data to easily view campaign costs and metrics in spreadsheets. Build custom dashboards to visualize performance.
AdEspresso
This paid tool offers advanced Facebook Ads reporting and optimization features. Get visualizations of ad costs and make bid adjustments.
Bidnamic
Uses AI to automatically optimize Facebook Ads bidding and budgets to hit ROI goals. Continuously manages costs across campaigns.
Conclusion
In summary, most small businesses spend around $250 per month running Facebook Ads. But costs can range dramatically based on audience size and targeting, locations, placements, landing page quality, bid strategies, campaign objectives and more. By tracking costs diligently and looking for opportunities to test and refine your campaigns, you can steadily improve performance and ROI from your Facebook Ads investment.