Determining a good cost per click (CPC) for Facebook ads can be tricky. There are many factors that go into calculating an optimal CPC, and what is considered “good” can vary greatly depending on your goals, target audience, and industry. In this comprehensive guide, we’ll break down everything you need to know about determining a good Facebook CPC for your campaigns.
What is Cost Per Click (CPC)?
Cost per click (CPC), sometimes referred to as pay per click (PPC), is the amount you pay each time someone clicks on your Facebook ad. Your total ad spend is calculated by multiplying your CPC by the number of clicks your ad receives.
For example, if you set a CPC of $1 and your ad is clicked 100 times, your total ad spend would be $100.
Facebook ads are auction-based, meaning advertisers bid against each other for ad placement. The highest bidder wins the auction and pays the amount they bid. Therefore, your CPC represents the maximum you’re willing to pay for a click.
What Impacts Your Facebook CPC?
Several factors impact how much you end up paying per click for Facebook ads:
Competition
More competition for your target keywords, audience, and placements means higher CPCs. Advertisers bid against each other in auctions, driving up prices for clicks.
Targeting
Narrowly targeted ads tend to have higher CPCs than more broadly targeted ads. Reaching a very specific, niche audience makes the traffic more valuable and therefore more expensive.
Quality Score
Facebook’s quality score algorithm looks at the expected click-through rate (CTR), relevance, and landing page experience to determine ad quality. Higher quality scores lead to lower CPCs.
Ad Design and Copy
Well-designed, compelling ads garner more engagement at lower CPCs. Poorly designed ads deter clicks, forcing you to pay more per click.
Landing Page Experience
If your landing page provides a positive experience that converts visitors, Facebook rewards you with discounted CPC pricing.
Offer/Creatives
Flash sales, promotions, and other enticing offers attract more clicks at lower costs. Strong creatives also boost engagement.
Device/Platform
Clicks from desktop tend to cost less than mobile clicks. In-stream video ads also command higher CPCs.
What is a Good Facebook CPC?
So what should you consider a “good” CPC? While there are general benchmarks, the true definition depends on your goals, margins, and ROI targets.
Average Facebook CPC by Industry
| Industry | Average CPC |
|---|---|
| E-commerce | $1.72 |
| Technology | $2.18 |
| Travel | $1.19 |
| Automotive | $3.05 |
| Financial Services | $4.56 |
| CPG | $0.98 |
Industry averages provide a general benchmark, but your targets need to be based on your profit margins and ROI goals.
Benchmark Against ROAS Goals
A better approach is to work backwards from your return on ad spend (ROAS) goals to determine a viable CPC.
For example, if your average order value (AOV) is $100 and your goal is a ROAS of 2x, you need $200 in revenue for every $100 you spend.
That means your maximum CPC would be $1 to break even ($100 ad spend divided by 100 clicks). However, you likely want some margin above break even, so you’d want to keep CPCs below $1.
Reverse engineer your ROAS goals based on profit margins to set realistic CPC targets.
Factor In Conversion Rates
Your ad’s click-through rate (CTR) also impacts viable CPCs.
For example, if your CTR is 2% and your conversion rate is 25%, you can expect 2 clicks for every 100 impressions and 1 conversion for every 200 impressions.
If your average order value is $50, you generate $50 in revenue for every 200 impressions. Therefore, your maximum CPC would be $0.25 to break even.
Factor in your actual conversion and click-through rates to determine cost-efficient CPCs.
Test Different CPC Bids
While benchmarks and reverse engineering ROI goals can provide starting points, the best way to optimize CPCs is through thorough testing.
Run A/B tests with different CPC bids while keeping other variables like creatives and targeting consistent. Monitor how clicks, conversions, costs, and ROAS differ across various CPC levels to pinpoint the optimal range.
Tips for Lowering Your Facebook CPC
Here are some proven tips for decreasing your cost per click on Facebook ads:
Improve Ad Relevance
Ensure your ads are highly relevant to your target audience and placement. Laser targeted ads have higher click appeal so you pay less for each click.
Enhance Ad Creative
Compelling visuals, emotional copy, and enticing offers help your ads stand out in the feed. Better performing creatives mean better CTRs and lower CPCs.
Optimize for Quality Score
Facebook rewards relevant, high-quality ads with discounted CPC pricing. Follow their best practices for landing pages and creatives.
Bid at the Right Times
Bidding when competition is low, such as early mornings and late nights, can significantly decrease CPC.
Remarket to Engaged Users
Remarketing to visitors who have already engaged with your brand tends to deliver higher conversion rates and lower CPCs.
Test Different Bid Strategies
Try different bidding strategies like target CPA, target ROAS, and bid caps to find an optimal approach.
Monitor and Adjust Bids
Actively monitor performance and adjust bids to balance conversions with costs. Lower bids if CPCs become excessive.
Conclusion
Determining a good cost per click for Facebook ads depends largely on your profit margins and ROAS goals. While industry averages provide some guidance, thoroughly testing different CPCs and bidding strategies tailored to your objectives is key to finding the right balance.
By regularly assessing performance data and optimizing for relevance, quality score, and engagement, you can maintain effective CPCs that deliver strong returns on your ad spend. With the right CPCs, Facebook ads can be a cost-efficient driver of sales, leads, and brand awareness.