Pricing a Facebook ad isn’t always straightforward. If you find social media advertising confusing, you have plenty of company. Knowing how much to spend on Facebook ads can feel like throwing a dart at a dartboard while blindfolded.
Most business owners understand how important social media advertising is. In 2021, Facebook ad revenue increased by 56% to $28.6 million. Moreover, Facebook accounts for more than 25% of all digital ad spending. Only Google ads command a bigger chunk of digital advertising money.
In 2019, a CMO Survey found that retail businesses generally spend about 20% of their total marketing budget on social media ads. That can be a good starting point for determining how much to spend on Facebook ads, but it isn’t the whole story.
How Much Are Facebook Ads?
There is no single answer comparable to the cost of a quarter-page ad in a print magazine. The cost of Facebook ads depends on your industry and which bidding model you use, such as cost-per-click (CPC) or cost per one thousand impressions (CPM).
On average, however, Facebook advertisements cost around $0.97 per click. For the CPM model, it works out to about $7.19 for every 1000 impressions. Ads that focus on earning app downloads or “likes” will cost around $5.47 per download and $1.07 per like.
Are Facebook Ads Better Than Google Ads?
Cost-per-click (CPC) of Facebook ads is usually significantly lower than that of Google Ads. However, most people find it easier to get started with Google Ads than with Facebook Ads.
Facebook advertising isn’t necessarily better than Google advertising, because the two platforms work in different ways.
For example, Google Search ads target searcher behavior based on keywords. It also allows you to target certain websites and audience demographics. Facebook ads allow you to target people based on factors such as:
- Geographic location
- Their engagement with your business’s Facebook page
Plus, you can upload custom audiences and create “lookalike” audiences for your Facebook ad campaigns.
Facebook Advertising Involves Many Moving Parts
If you have delved into the company’s own information about how to budget your Facebook ad account, you probably realized that it can be quite complex. For example, you can set maximums for all your campaigns or for individual campaigns.
You can set an average bid amount and let Facebook bid for your advertising spots. And you can determine an overall Facebook advertising budget, or the cost for each “result” you get, whether that’s clicks or impressions. Managing Facebook ad campaigns can be complicated, even without worrying about your budget.
The Facebook Ads Manager
The Facebook Ads Manager is the origin point for running Facebook ads (as well as ads on Instagram). Though it touts itself as an all-in-one tool, it too can seem convoluted for someone who is not a social media advertising expert.
Using the Facebook Ads Manager is essential whether your budget is big or small. If you have a smaller Facebook advertising budget, you may wonder whether it is worth all the fine-tuning you’ll find yourself doing. It is definitely worth the effort because Facebook ads work.
How Effective Are Facebook Ads?
More than 90% of marketing professionals in a DataBox survey said that Facebook ads are effective at generating sales. A majority of companies surveyed said that at least 15% of their overall leads originated on Facebook.
But simply creating an ad and uploading it isn’t nearly enough to get great results. For example, more than half of the companies in the DataBox survey said that they A/B test every Facebook ad campaign they run.
Other keys to making Facebook advertising successful include:
- Advertising only after understanding your goals and defining “success”
- Having a clearly defined target audience
- Selecting the right kind of Facebook advertising for your business
- Crunching the data to learn which strategies work best and repeating them
How Much Small Businesses Spend on Advertising
The average small business spends about 1.08% of its revenues on advertising. Average marketing spending in 2018 was around 7.9% of revenues. These are only rough guidelines, however, because different business types spend more or less on their marketing and advertising.
For example, clothing retailers spend more than restaurants, and B2C businesses spend more than B2B businesses. Overall, however, 5 to 12% of revenue is a good target range for an overall marketing budget. Companies with aggressive growth strategies should lean toward the higher end of the range.
What Percentage of Marketing Budget Should Go to Facebook Ads?
A brand’s social media advertising should account for around 20% of the total advertising budget. For many businesses, Facebook is the social media platform of choice for advertising.
The overall money spent on Facebook advertising generally breaks down to around:
- 10% on strategy
- 5% on project management
- 30% on design
- 55% on placing the ads themselves
Starting Small and Scaling Up
Companies that manage their own Facebook advertising usually find that starting small, with a single campaign, is wise. From there, they can determine which ads were most effective and why, and design new ads with that information in mind.
Of course, determining ad effectiveness doesn’t stop after the first ad campaign. Social media users can be fickle, so it’s essential to continue monitoring Facebook ads for as long as you run them.
Why You Shouldn’t Shy Away from Advertising on Facebook
Don’t avoid Facebook advertising because it is complex. Facebook ads, when designed and targeted carefully, are effective enough to make the effort worthwhile.
Learning how to place Facebook ads and monitor their performance is paramount. Otherwise, you won’t know how well your advertising dollars are being spent.
If you are interested in placing Facebook ads but are unsure where to begin, it’s understandable! Doing it right requires quite a bit of work.
You Don’t Have to Do It All Yourself
Maybe you don’t have the time or expertise necessary to launch a powerful Facebook advertising campaign. But we do.
We have a Facebook-certified Digital Strategist team whose goal is to help your ads reach the customers you want. Our in-house writers and designers know how to create the content that your potential customers want to see.
We also have Google-certified professionals to help companies like yours create Google Search and Google Display advertising campaigns that get the results you want.
If you are ready to expand your business with the help of an outstanding digital ad campaign on Facebook, we encourage you to speak with our digital assistants about setting up effective Facebook ads for your business.