The cost per click (CPC) on Facebook ads can vary significantly based on several factors. Understanding what impacts CPC can help advertisers set effective budgets and maximize return on ad spend.
Audience targeting
Who you target with your Facebook ads is one of the biggest determinants of CPC. Targeting a smaller, more niche audience tends to result in higher CPC. Targeting larger broad audiences results in lower CPC.
For example, targeting people interested in “organic gardening” will likely have a higher CPC than targeting everyone living in a major city. The more specific the target audience, the less competition there will be from other advertisers bidding for that audience’s attention, which drives up CPC.
Location
Location-based targeting also impacts CPC. Targeting countries like the United States and other Western nations will lead to higher CPCs compared to targeting developing nations where advertising competition is lower.
Targeting areas with higher costs of living and disposable income, like San Francisco or New York, will also drive up CPC versus targeting rural areas and small towns.
Interests and behaviors
Targeting people based on interests like “photography” or specific hobbies will increase CPC. Going after audiences exhibiting certain online behaviors like “recent new car buyers” or “travel intenders” will also boost CPC.
The more specific the interest and behavioral targeting, the fewer people will qualify for the target audience, putting less ad inventory in play so bids increase.
Demographics
Targeting certain demographics like age, gender, income, education level, relationship status, and more can impact CPC as well. In general, targeting younger audiences tends to increase CPC, while targeting older demographics over 65 can decrease it.
Targeting high-income earners and college graduates tends to raise CPC, while broader targeting across income and education sees lower CPC. However, this can vary significantly based on product or service.
Bidding and budget
How you set your bids and overall budget for Facebook ads also determines what you’ll end up paying per click.
Bid strategy
The bidding strategy you select for your campaign is a significant factor for CPC. There are three main options:
- Manual bidding, where you set maximum CPC bids
- Automatic bidding focused on conversions
- Automatic bidding focused on campaign budget optimization
Manual bidding gives you direct control over CPC, but takes more effort to actively monitor and adjust bids. Automatic bidding options rely on Facebook’s algorithms to optimize bids to get conversions or spend budget according to your goals.
Bid amount
With manual bidding, the specific CPC bid amount you set for the audience and placements has a very direct impact. Higher bids will win more auctions to display your ads, but also increase CPC. Lower bids decrease CPC but can limit reach and conversions.
Budget
Your overall budget also indirectly impacts CPC. Higher budgets allow you to bid more aggressively and get more conversions to optimize for. Smaller budgets mean you may have to be more conservative with bids to avoid spending too quickly.
It’s important to find the right balance between your budget and bids to maximize results at an efficient CPC.
Ad placements
Where you choose to show your ads on Facebook and Instagram also affects CPC:
Facebook News Feed
The News Feed is the most popular placement, so you can expect fairly high competition and CPC there. However, it provides the biggest reach thanks to high engagement levels.
Instagram Feed
With Instagram’s tremendous growth, advertising in Instagram Feeds has also gotten more popular. CPC bids are rising, but Instagram still represents a more visually engaging opportunity at a lower CPC than Facebook in some cases.
Stories
Instagram and Facebook Stories ads tend to have higher CPCs than feed placements. The more immersive, full-screen format demands higher engagement, and many advertisers are still experimenting with the format. Less overall demand leads to less supply and more competition between advertisers.
Right-hand column
The right-hand column ads on Facebook see lower CPCs on average compared to News Feed placements. There’s lower competition as fewer advertisers focus ads here versus the main News Feed.
Ad creative and copy
The visuals, copy, and call-to-action used in your Facebook ads also impact CPC.
Ad relevance
Ads with creative and messaging highly relevant to your target audience will get better engagement and response. Facebook rewards relevance with lower CPCs over time.
Ad quality and design
Higher quality visuals that catch the viewer’s eye along with clean, attractive design will improve results and decrease CPC. Poor design that blends in or looks spammy will cause CPC to go up.
Emotional appeal
Ads that appeal to emotions like humor or inspirational stories tend to drive more engagement at lower CPCs versus purely functional/direct response messaging.
Social proof
Including social proof elements in your ads like customer ratings/reviews, testimonials, and endorsement badges can improve CPC by reassuring viewers on relevance and quality.
Optimizing these creative elements for your campaign goals and audience can generate more conversions at an efficient CPC.
Landing page experience
What happens when users click your Facebook ad also determines the CPC you’ll pay. Facebook carefully tracks post-click user experience.
High relevance
Landing pages that are highly relevant to your ad messaging and offer expected information/products will result in lower CPC.
Fast load time
Users expect pages to load quickly. Fast load times keep them engaged after clicking and signal good quality to Facebook.
Clear call-to-action
Having a clear call-to-action above the fold so users immediately know the next step will optimize CPC.
Minimal distractions
Avoiding too many pop-ups, ads, and other distractions on your landing pages streamlines the user experience to help decrease CPC.
Campaign optimization
How you optimize your Facebook ad campaigns over their duration also impacts the CPC you pay.
Audience expansion
Broadening your audience reach over time will lower CPCs as you target more general segments with less competition.
Ad rotation
Regularly testing new ad creative and messaging keeps campaigns fresh and finds more cost-effective variants.
Placement expansion
Expanding to new placements incrementally tests different areas to find cheaper CPCs.
Excluding unresponsive segments
Filtering out audience segments that aren’t converting efficiently will improve overall CPC.
Pausing inefficient ads
Pausing/deleting the underperforming ads in your ad sets will keep CPC down.
Industry and product factors
The specific industry and products/services you advertise also impact the CPCs you can expect:
Competition
Industries with more competition like insurance, services/SaaS, ecommerce will see higher CPCs as advertisers vie for audience attention. Less competitive industries can advertise at lower CPCs.
Purchase frequency
Products/services bought recurrently like food, household items, and consumables allow for lower CPCs and more consistent ad budgets. Big ticket, infrequent purchases require higher CPCs generally.
Purchase motivation
Purchases driven by strong motivations like health, family, and emotional connections can demand higher CPCs, while more rational/functional purchases based on price and comparisons enable lower CPCs.
Branding vs direct response
Brand advertising focuses on awareness and engagement so may justify higher CPCs, whereas direct response aims for conversions and targets lower CPCs.
Conclusion
Facebook ad CPCs are determined by a mix of factors from audience targeting and bidding strategies to ad placements, creative, industry competition, products, and optimization tactics.
Understanding what impacts CPC allows advertisers to set budgets, bid competitively, and maximize campaign return on ad spend. Testing and optimizing for lower CPC enables affordable audience reach and conversions.