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With over three billion users scrolling its feed every day, Facebook is a major advertising opportunity for businesses big and small! But how much do Facebook Ads cost?
As with most things in digital marketing, there’s no one-size-fits-all answer. Your total spend depends on things like your industry, target audience and how well you leverage this powerful platform. To beat the competition, reach customers and minimise costs, you’ll need to plan ahead and optimise regularly.
Here, we explain how much Facebook Ads cost and the factors affecting these figures. Keep reading to get an accurate estimate of expenditure, plus how to curb campaign costs without compromising results!
How do Facebook Ad auctions work?
Facebook works on an ad auction, which chooses the most valuable ad to display to a user every time there’s a chance to advertise.
To work out which ad with the user’s target audience takes this coveted spot, Facebook considers three key factors:
- Bid: The bid an advertiser places for the ad i.e. how much the business is willing to pay to achieve its goal.
- Ad quality: The quality of an ad depends on factors like viewer feedback (for example, hiding the ad) and whether it has subpar attributes, such as hyperbolic messaging, clickbait and omitting key information.
- Estimated action rate: The likelihood that the user will engage with or convert from a certain ad i.e. whether showing this ad is expected to result in the advertiser’s target outcome.
Ad quality and estimated action rates both determine ad relevance. Ultimately, the more relevant the ad is to a given user, the more likely it will win the auction – even if other advertisers are bidding higher.
How much does a Facebook Ad cost?
The cost of Facebook ads depends on your industry’s competition levels, target audience, ad quality and placement, and general campaign objectives.
But before we go on, there’s one important consideration to take into account. That’s what we actually consider to be Facebook Ads ‘cost’, which could be defined as the total amount spent on advertising or the price of each desired outcome from an ad.
You can take charge of your overall expenditure by setting (and sticking to) a budget. Meanwhile, the cost per result can be controlled via your bid strategy.
Let’s take a look at the average Facebook Ads cost per bidding model.
Cost-per-click (CPC)
Facebook Ads CPC refers to any clicks on an ad, whether to react to a post, view its image or open a link. So, if your goal is to drive links to your website, this metric can be misleading.
The good news?
Facebook also offers another CPC metric known as ‘CPC (link click)’ that only considers link clicks. To calculate the Cost Per Link Click, simply divide your ad spend by the amount of link clicks it’s generated. For instance, if you spent AU$1,000 and the ad drove 400 link clicks, your Cost Per Link Click comes to AU$2.50.
Across the United States, the average Cost Per Link Click for Facebook ads was USD$0.56 in June 2024. But bear in mind that this number tends to be higher in Australia.
Cost Per Link Click also varies by industry and campaign objective.
Facebook’s traffic objective optimises your campaign to increase clicks on ads that lead to your website’s landing page, app, or event.
Here’s a summary of the Cost Per Link Click by industry for traffic objective campaigns worldwide in USD:
Facebook Ads with the leads objective are refined to generate leads via online forms, messages, and calls. Below, we’ve listed the average Cost Per Link Click for lead generation campaigns by sector:
Cost-per-thousand-impressions (CPM)
CPM tells you how much Facebook Ads cost to have your ad shown 1,000 times. It’s calculated by dividing your ad spend by the number of impressions, before multiplying that figure by 1,000.
For instance, say you’d like your ad to be displayed 150,000 times and your CPM is AU$12. You would need to pay about AU$1,250 for ads {(150,000 impressions / 1,000) x $12)}.
As of June 2024, the average CPM for Facebook Ads was US$9.40 in America. As with CPC, the average CPM in Australia is usually higher, ranging from AU$10 to over AU$20 for high-quality traffic.
CPM also differs significantly from niche to niche, as well as campaign type. For example, super competitive industries like skincare can face CPMs as high as AU$80. Moreover, CPMs tend to be lower for video view campaigns compared to lead generation campaigns.
Having an average CPM in mind can help you determine how many times an ad will appear before your campaign even goes live. That way, you’ll know how much you need to fork out to kick your goals!
Even better if you know your business’s average conversion rate. Let’s continue the example above.
Cost-per-lead (CPL)
Lots of businesses use Facebook Ads to drive leads, like newsletter signups and form submissions. In this case, you’ll need to look at Cost Per Lead (CPL). The average CPL for Facebook Ads in June 2024 was US$12.38.
To calculate CPL, divide your spend by the number of leads gained.
If using the lead generation campaign objective, clicking on your ad’s call-to-action (CTA) will open a pop-up lead form on Facebook. Only these leads will appear in Ads Manager and be factored into the CPL.
On the other hand, if you’re using the conversion objective and feeding ad traffic to a lead form on your own landing page, then these leads will appear as conversions instead of leads in Ads Manager and won’t be factored into CPL.
Whichever way you gather data, a strong CPL depends on where your ad stands in the sales funnel. And as each business offers distinct products and services at different prices with various conversion rates, there’s no such thing as a standard “good” CPL.
But by tweaking your targeting to those most likely to take action, you can boost your ads’ conversion rate and ultimately reduce the CPL for your business.
Factors influencing Facebook ad costs
A host of factors work together to ultimately determine how much Facebook Ads cost. Keep reading to learn how to leverage each one to reduce your spending.
1. Bid amount
In a nutshell, your bid amount is how much you’ll pay for an ad. The suggested or best bid amount depends on your bidding goal.
Bid too low, and your ads won’t show. Bid too high, and you’ll quickly burn through your budget.
Thankfully, Facebook provides bid estimates to guide your optimal spending.
2. Bidding strategy
Your bidding strategy impacts the price of your ads.
Each bid strategy sets its sights on achieving a key business outcome like driving sales, acquiring more customers, or boosting brand reach. So, choose a strategy that aligns with your primary KPI to maximise campaign efficiency, ROI, and profitability.
Low cost is the most popular, striving to optimise results within your budget – but with no cost control.
Alternatively, consider these other manual strategies:
- Cost cap restricts the price of results. It helps maintain a CPA at or below a set amount, increasing volume no matter market conditions. Initial spending may be slower, and learning phases can be longer, but costs should stabilise afterwards.
- Bid cap limits Facebook’s bids, so it’s ideal for those using internal bidding or LTV models. Note that it requires frequent bid adjustments based on conversion rates and marginal costs, and doesn’t control for the CPA shown in reports.
Prefer automatic bidding?
Let Facebook handle it. Simply set your budget, and the platform will bid on ads for you.
Automated bidding maximises results within your budget. It’s perfect if you want to spend your whole budget, don’t have a particular KPI, or can increase volume without strict CPA goals.
Just beware of potentially higher costs (like CPM and CPA) than you would otherwise put up with.
3. Target audience
Your ad costs are directly affected by your target audience, with factors like age, location, and interests driving the price up or down. For example, marketing in a major city or to an in-demand demographic will usually set you back more.
Here are the two main strategies for creating audiences for your Facebook Ads:
- Specific or custom audiences: Use data to target people familiar with your business or likely to engage with your offering.
- Broad audiences: Identified by Facebook, these cover a larger range of users.
Don’t forget that while honing in on a smaller and warmer audience might be more expensive per click, it could also be more valuable if it boosts conversion rates.
Facebook will also learn and refine your audience over time to help your ads reach the most engaged users.
4. Competition
As mentioned above, Facebook ads run in an auction environment, where competitive bidding drives up demand and limits ad space.
That means your Facebook Ads costs are influenced by what other advertisers are willing to spend.
Of course, different industries have different levels of competition. In highly competitive niches like finance or legal services, you’ll need to bid aggressively to gain a spot. On the other hand, less
competitive sectors can enjoy lower rates – but might also struggle with smaller target audiences.
5. Ad placement
Ad placement dictates where your ads appear across Facebook and Meta’s ecosystem, including Instagram, Messenger, WhatsApp and the Audience Network.
Choosing placements like in-feed, right-side, or reels can impact your ad spend. That’s because different placements drive varying engagement levels, ultimately affecting your cost per click, lead, or impression.
To keep the average cost per result down, start by running ads on varied placements across both Instagram and Facebook. You can either leave it to Facebook to optimise placements automatically or select where the ads appear yourself.
6. Ad relevance
Facebook aims to optimise their users’ browsing experience by showcasing super relevant content. And this includes ads. That’s why the platform rewards engaging, high-value advertising content with more visibility and lower costs.
You can use Facebook’s ad relevance diagnostics tool to gauge your ads’ effectiveness. Essentially, it evaluates an ad’s quality, engagement, and conversion potential to see whether it’ll win the auction.
If this analysis pinpoints underperforming ads, identify if the problem is with your creative assets, post-click experience, or audience targeting.
7. Time and day
Advertising platforms experience high and low activity periods, and Facebook is no exception.
During peak hours, a larger audience is active, driving up ad costs. Conversely, running ads during off-peak hours is more cost-effective.
According to AdEspresso, Facebook’s cost-per-click (CPC) is lowest on Sundays and highest on Fridays.
8. Seasonality
Advertising costs also fluctuate throughout the year, especially during high-demand periods like the buildup to Christmas. Around these times, increased competition drives up ad prices as businesses intensify their marketing efforts.
AdStage reports that Q4, particularly October to December, sees a significant spike in average CPC as extra marketing activity targets consumers around the festive season.
If possible, consider scheduling campaigns outside peak seasons to lower costs without sacrificing impact.
9. Campaign goal
Facebook Ads costs depend on your chosen performance goal—the result Facebook bids on for you.
Generally, the greater the expected return, the higher the cost of running your campaign. For example, brand awareness campaigns are cheaper than conversion-focused ones.
You can choose from various performance goals, including:
- Ad reach
- Impressions
- 2-second continuous video views
- Link clicks
- Landing page views
- Leads
When setting your budget and bid strategy, factor in the cost of your chosen optimisation event and ensure your wallet can handle it.
10. Landing page quality
While this factor doesn’t directly affect Facebook Ad costs, it dramatically boosts your return on ad spend (ROAS). Because even with a stellar Facebook Ads campaign, a poorly optimised landing page will stifle sales.
So, make sure your landing page is structured to share relevant information, engage readers and encourage action. This strategy can help drive conversions, not only covering ad costs but also maximising your profits!
How to minimise Facebook advertising costs in Australia
The lower your Facebook Ads costs, the chunkier your ROI. Maximise margins with these pro tips.
1. Pick the right campaign objective
Choosing the right campaign objective is key to keeping costs down. Each objective has its own pricing model and affects ad performance differently.
For example, if you want to spread the word about your new business instead of driving hard sales, choose ‘Brand Awareness’ to optimise for reach as opposed to clicks or conversions.
Facebook offers six objectives to pick from:
- Awareness
- Engagement
- Traffic
- Leads
- Sales
- App promotion
Your objective should match your desired outcome. That’s because the algorithm pairs this objective with the right users. If you’re targeting sales, for example, your ad will show to users who have already bought via Facebook.
So, choosing the wrong objective can be costly. To avoid extra expenses, make sure your marketing goal is clear and aligned with your campaign.
2. Boost ad relevance
Targeting a specific audience makes it easier to create ads that resonate with potential customers.
Retargeting can zero in on past interactions, like browsing a product page, while custom audiences can leverage data like interests and location. Other valuable data sources include post-purchase surveys and past ad performance.
Harness these findings to write copy and feature visual creatives that speak to your audience’s specific pain points and goals. This can boost ad relevance and ultimately help to win more placements for less.
3. Hone your audience targeting
As Facebook’s algorithm takes ad relevance into account when calculating bids, the more specific your audience (think demographics like age, interests, and behaviours), the better your chances of winning the ad auction and reducing costs.
That said, while narrow audience targeting is cost-effective, start with a relatively broad pool to identify the most responsive segments. This helps Facebook identify which audience segments respond best to your content.
For example, let’s say you’re selling home appliances but facing high ad costs with a broad audience:
- Based in Australia
- Aged 18+
Your data shows most customers are people in Perth who are looking for luxury kitchen appliances.
Refine your audience to:
- Within 15 miles of Perth
- Interested in ‘Kitchen’
- Earning over $80,000 per year
By initially targeting a broad audience and then narrowing it down with data, you can boost ad relevance, maximise ROI and lower overall costs.
4. Schedule your ads
Facebook sets spending limits to avoid overspending, pausing all ads once you reach your cap.
Ad scheduling can help manage your costs by allowing you to choose specific time slots for your ads to run, instead of running them all day every day.
5. Keep A/B testing
With so many variables at play and seasonal factors out of your control, nailing the perfect ad and audience can be tough.
A/B testing (split testing) helps. It’s about tweaking one element at a time to find out what works best for your audience. This can reveal winning combos to boost your results and cut Facebook Ads costs.
For each campaign, try testing these elements and watch how they affect your ad costs:
- Creatives: Which grabs more attention—images, videos, or carousels? Long-form or short-form copy? Influencer endorsements or real customer reviews?
- Placements: The news feed is a go-to, but maybe your ads perform better elsewhere, like across the Audience Network. Don’t forget Instagram Stories for low-cost clicks.
Use Facebook Ads’ analytics to keep tabs on and compare your ads. Pause or shut off the ones that aren’t converting.
6. Enhance post-click experiences
A winning Facebook ad can drive traffic, but the post-click experience determines if those clicks turn into conversions.
If your website is slow or confusing, even the shiniest ad won’t save you.
Here’s how to improve the post-click experience for visitors from your Facebook ads:
- Guide shoppers to personalised and relevant landing pages instead of the homepage. For example, if you’re promoting a pair of shoes, bring them straight to the precise product page.
- Speed up your site. A one-second improvement in loading time can boost conversions considerably, so compress images, eliminate unnecessary JavaScript, and reduce third-party apps.
- Optimise for mobile. Most Facebook users are on mobile, so make sure your site is responsive and adapts well to smaller screens.
- Offer one-click checkout. Simplify the checkout process to curb cart abandonment.
7. Check ad frequency
One pitfall of targeting a super-specific Facebook audience is ad fatigue. When users see your ad over and over, it loses its punch, no matter how spot-on it is.
That means less engagement, fewer conversions and a lower return on ad spend.
Facebook tracks ad frequency by dividing impressions by reach. Keeping your frequency close to one helps slash your advertising costs.
If your score climbs above two or three, it’s time to mix things up with fresh ad copy, images, or videos. No need for a full revamp—just keep it interesting.
8. Remember to retarget
The Meta pixel is your secret weapon for tracking website visitors and linking their activity to their Facebook profiles. It captures everything from the pages they browsed to the items they added to their cart and how long they stayed.
Use this goldmine of data to create personalised retargeting ads that hit the mark.
Potential Facebook retargeting ads include:
- Abandoned cart ads: Nudge shoppers to complete their purchase.
- Landing page ads: Tailor ads based on the specific pages they visited.
- Recent visitor ads: Keep your brand fresh in the minds of recent visitors.
Thanks to their extra warm leads and often higher conversion rates, we find that remarketing ads tend to be the most cost-effective!
Facebook Ads cost FAQs
According to Facebook, you’ll need to spend at least AU$1 per day on each ad if your campaign is being billed by impressions. But that’s the bare minimum.
Remember that the right amount of spending depends on competition levels, company offerings and campaign goals.
If your goal is to drive traffic, leads or sales, you should spend at least AU$20 per ad per day. That way, you can gather enough data to gain meaningful insights on performance and optimise your campaign for stronger results.
What’s considered a ‘good CPC’ on Facebook depends on your industry, offering, audience, and campaign strategy.
To work out whether your ads are performing well, compare the CPC with past and existing ads your business has run.
Also, bear in mind that bottom-of-funnel campaigns naturally tend to have higher CPCs than top-of-funnel campaigns, where users are more likely to take action.
Your ad spend should allow you to win the Facebook ad auction and reach your target audience while costing less than the value its engagement is expected to generate.
Benchmark ROIs vary according to a range of factors, from your industry to target audience. That said, try to strive for an ROI of at least 2:1. In other words, your business should earn AU$2 for every AU$1 you spend on ads.
Not sure how to boost performance?
Working with experienced Facebook Ads specialists like Redback is a great way to maximise ROI.
Setting the right budget is key to a successful ad strategy. Thankfully, you can tailor your spending to suit your needs.
In our experience, small businesses typically spend between AU$1,000 and AU$10,000+ per month on Facebook Ads.
Of course, your own budget will depend on various factors, like your industry, the number of campaigns you’re planning to run, and your overall goals.
Start things off with a conservative but practical budget. That’s because you want to spend enough to reach potential buyers, test different approaches, and optimise your ads.
As your Return on Ad Spend (ROAS) improves, you can increase the budget to boost results.
Moreover, working with digital marketing specialists like Redback can help you get the most out of your investment, structuring and refining campaigns to be as effective as possible.
Facebook ad management fees depend on the scale and complexity of your campaigns.
As a rough rule of thumb, you can expect to pay 20-50% of your ad budget for management. For example, if you spend A$10,000 a month on ads, you could end up investing A$2,000 to A$5,000 in management.
Think that’s pricey?
Remember, you’re paying for optimisation that maximises daily revenue, which should ultimately not only cover the cost of these fees but boost your margins significantly.
Here’s why it pays to go pro:
- Proven expertise: Our specialists have years of experience in Facebook Ads optimisation, knowing exactly how to get you the most bang for your buck. Check out our work here.
- Invaluable efficiency: We direct spend towards your strongest ads and flag poor performers fast, continuously refining campaigns to reduce costs.
- Smart strategy: We take the time to develop a practical plan tailored to your business goals, launching effective campaigns from the outset.
- More time: Outsourced support frees up your team to focus on core tasks that grow your business.
Your full digital team for Facebook Ads
Facebook Ads costs vary depending on all kinds of factors, including your target audience, industry competition, campaign objectives, ad quality and placement, and creative content.
When you choose Redback, you can maximise your Facebook Ads ROI with minimal effort. As Australia’s largest regional digital agency, our reliable team draws on years of hands-on experience to help your business succeed on socials.
From campaign plans and implementation to data analysis and optimisation, we’ll help you reduce expenses without sacrificing results. That means targeting relevant users with accurate and impactful ads using well-defined goals.
For full-service support with Facebook Ads management, call us today at (02) 4962 2236 or get in touch online.
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