How Much Does Facebook Advertising Cost?

Feb 22, 2023 | All, Digital Ads, Digital Marketing

Facebook advertising is an integral part of marketing strategy for millions of businesses today. As every business quests for a stronger digital footprint – the most obvious question to ask is, How much does Facebook advertising cost? The safe answer is: “It depends on many factors.”

You haven’t come here to hear this, have you? Let’s uncover the most closely held secret in social media marketing and share comprehensive information on social media advertising with you. It will help you decide upon spending your money on Facebook advertising.

Before we talk dollars, ask yourself what your business wants to achieve with Facebook advertising. Let’s look at two scenarios. If you are a solopreneur, you might have a target to generate a yearly revenue of $50,000. But you might look forward to generating millions of dollars when you have a larger company. Now, considering these two extreme cases, let’s dig deeper into whether Facebook advertising is worth all the effort.

Factors Contributing To Facebook Advertising Costs

Country You Are Advertising In  

The average CPC (Cost Per Click) on Facebook is $0.97. However, the rate varies between countries; in the US, where it is $2.25, and in the UK, the average cost per click is $1.45. The US and UK have similar markets, yet you see a variation in the CPC. Whereas, in India, one of the fastest growing economies, CPC on Facebook is only $0.10! Look at the chart that well explains the country-wise CPC, where South Korea is at the top with a CPC of $3.85, while India and Pakistan are at the bottom with $0.1. A lower CPC allows businesses to reach more customers with the same advertising budget.

Facebook advertising cost, social media marketing, social media advertising

Image Source: Statista

As an advertiser, what matters to you most can be CPC or cost per conversion, but Facebook does not charge its advertisers based on that. Cost Per Thousand Impressions (CPM) matters to the social media giant. While the CPM rates vary from country to country, they can differ from relative CPCs.

In the UK, the CPM is only $3.15 on average compared to $7.34 in the US. Thus, you see the difference between CPC is much smaller than that of CPM. It is clear that on an impression basis, the advertising cost is considerably less in the UK in comparison with the US. But when click-through rates (CTR) are concerned, the US advertisers reach much higher.

Click-Through Rates 

The Click-Through Rates or CTR achieved by your campaigns affects your overall advertising cost as Facebook charges based on CPM. Therefore, you can halve your CPC if you generate double the number of clicks from the same number of impressions. Take a look at the CTR averages for various industries:

Facebook Advertising CTR %

Image Source: WordStream


Ad Relevance Score  

Ad relevance score reflects how well your target audience receives your Facebook Ad. It is a big factor in determining your advertising cost on Facebook. An ad relevance score is generated once your ad receives 500 impressions at least. This number is between 1 and 10; the higher you score, the better your Ad relevance score is. And when it comes to determining your ad cost, this plays a big factor. Let me explain. Facebook is serious about not ruining its platform with unwanted and irrelevant advertisers. They want to ensure that the users should enjoy the ads, or else they may get annoyed and leave the platform.

Facebook rewards advertisements achieving high relevance scores with lower CPMs. On the contrary, ads with low relevance scores get punished with high CPMs. So, make your ads more engaging and interesting. Creating quality landing pages to ensure a high-quality landing experience is also important. At the moment, three metrics are important to determine the relevance score. These are Quality Ranking, Engagement Rate Ranking, and Conversions Rate Ranking.

Facebook Ad Objectives     

The social media advertising giant considers the objective of your ads as an important factor for determining the costs. The objective of your Ad is one of the primary factors to decide as you create an Ad campaign on Facebook. Your Ad objective best describes what you seek from social media advertising. Your advertising cost will vary depending on the option you choose. Have a glimpse of the current list of options:

For example, if you choose the reach objective, you will pay less than the conversion objective. It is because the conversion objective places your ad in front of people who are most likely to convert. Hence, the social media advertising giant charges a premium. Although CPM and CPC are higher in the conversion objective, the cost per conversion gets lower.

Target Audience       

Your Facebook advertising cost is highly impacted by “who is your target audience.” There are specific demographics that are more lucrative to advertisers compared to others. Facebook advertising acts through an automatic bidding system, and the more valuable the audience is, the more people want to advertise to it, making it more expensive than others.

Income targeting is a clear example of this. Advertisers always want to reach out to people with higher incomes as they are able and willing to spend more money. The wealthier income group is, therefore, more expensive to advertise to. It is important to know your target audience; if it is expensive, you can’t do much to reduce the cost.

The Industry

The cost of Facebook Advertising differs significantly from industry to industry.

Image Source: WordStream


As you can see, with an average of $3.77 per click, Finance and Insurance top the list of the most expensive industry for advertising, while Apparel gets the lowest with just $0.45. It is because more people are interested in apparel than in finance and insurance products.

It is easier to create interesting and engaging FB Ads for an apparel brand than for a finance or insurance company. When you are part of an expensive industry, you can’t do much about it. So, rather than getting beaten up when your CPCs are high, it is prudent to justify the added expense by considering the high average customer values.

Ad Placement On Facebook       

It is the location on Facebook or Instagram where your ad will be displayed. Based on performance, some placements get much more sought after than the rest. And the cost of advertising will vary between placements to a significant extent.

Quality of Ad Creative      

Your Ad is the most vital part of any Facebook Ad campaign. Regardless of its positioning, the ad and the message decide your campaign’s success. If your ad is engaging, it can convince the visitors to take the action you want, such as buying a product or visiting your website. If it is boring and doesn’t communicate the message well, your campaign is bound to fail. Thus, the quality of your Ad creative is the deciding factor for your Ad cost on Facebook, regarding cost per click and conversion.

Budgeting for Facebook Advertising Campaign   

We have covered the most important factors that affect Facebook Ad costs. As you plan your social media marketing campaign on Facebook, you must consider these factors while setting a budget. Several factors decide the budget for your campaign. These include the size of your business, your goals with the campaign, and allocations you have made for other digital marketing initiatives.

How Much To Spend On Facebook Ad Campaign?         

A media spend of ~ $17/per day would be a good starting point if you own a small business (~ $500 to  per month). However, you may need to spend more if you plan to create a buzz during a product launch or look for immediate rewards from your campaign.

As your social media marketing campaign shows results, you can increase your budget. Facebook advertising is scalable, and you can increase your ad budget to $750, $1300, or even $10,000 based on the ROI. This approach minimizes your risk but requires more patience.

Experiment With Different Strategies

The campaign’s early days require you to experiment with different strategies to determine which works best for you. The more you spend, the faster you are likely to find results. Targeting is vital, as failure to identify the right audience can lead to a lower ROI.

The ideal way to start a campaign is to allocate an affordable yet meaningful budget. Once you have figured out a profitable Facebook advertising sales funnel, you can generate an impressive ROI.

Final Thoughts       

We have covered all factors affecting Facebook advertising costs. Once you know it, you can implement plans to reduce costs and amplify your campaign. By planning your social media marketing strategy with a reliable digital advertising agency, you can develop an Ad campaign with a reasonable budget that serves your objectives and help you get an edge over your competitors.

If you are looking for an agile team to drive your social media marketing campaign, Cyrusson Inc. would be a perfect match. We are expert social media marketers who help clients run the most inspiring campaign on Facebook. Irrespective of your budget, we deliver maximum engagement and the highest ROI. Call us today to book a free consultation now, and let’s get started!

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